European Green Deal and Ukrainian energy: quo vadis?
Although the fight against coronavirus pandemic has had a significant impact on the agenda of new European Commission and is likely to slow down some initiatives, the EU political leadership sees salvation from the crisis in the ambitious European Green Deal. In particular, the President of the European Commission Ursula von der Leyen said yet in late April that this policy will be the drive of recovery for the EU, an opportunity to restructure the European economy and make it more sustainable.
However, what does this mean for Ukraine and its energy sector? In addition to obligations under the Association Agreement with the EU (in particular, those set out in the updated Annex XXVII), one shall remember that integration is a “mobile” goal. Current political trends in the EU shall be a benchmark for Ukraine; otherwise, the gap will only deepen.
Meanwhile, statements and decisions of the Ukrainian government indicate the opposite European strategy for overcoming the crisis. During the operation of the united Ministry of Energy, it was not possible to synchronize the climate and energy directions. For more than 6 months the government and key participants of the renewable energy market have been unable to agree on a solution to the industry’s problems. The fate of the draft Concept of “green” energy transition of Ukraine until 2050 presented by the Ministry of Energy at the beginning of the year is unclear.
Another key integrated policy document, the National Energy and Climate Plan until 2030 (NECP), is being developed. Its development and implementation is a chance for Ukraine to join the European Green Deal, without being a de jure part of the EU, based on respective recommendations provided within the framework of the Energy Community. And although the NECP is a tool within the Energy Union’s strategy, which has been implemented since 2015, it is adapted in the light of the European Commission’s new policy benchmarks.
We can only guess whether the situation with the division of the Ministry of Energy will change, and how long it will take the new and old departments to fully engage in the work.
At the same time, it is worth acknowledging the fact that the implementation of the European Green Deal brings additional challenges for the Ukrainian energy sector. For example, further decarbonisation is a prerequisite for continued integration and cross-border cooperation, as the EU plans to introduce a carbon border adjustment mechanism under the new policy. The price of goods and services imported by the EU will reflect the carbon footprint, which, for example, can significantly complicate the electricity export from Ukraine and thus market integration as such.
Postponement of decisions on structural problems (balancing the energy system with maintaining the RES support, transformation of coal regions, market liberalization) has a negative impact on Ukraine’s ability to integrate with the EU. Europe has made its choice in favour of green policies and is moving rapidly towards new standards, and this is exactly what Ukraine needs to take into account when deciding on both new strategies and tactical anti-crisis measures. After all, real integration will begin when new European trends become part of the Ukrainian agenda.
