European Format of CO2 Emissions Trading System

by Olha Povaliaieva
Wednesday, December 15, 2021
European Format of CO2 Emissions Trading System

Ukrainian business thinks about the fiscal nature of the approach to ecology and the lack of incentives to reduce emissions

Ukrainian businesses started thinking about the unproductiveness of all the country's "green" transformation instruments until a full-fledged mechanism for regulating CO2 emissions was launched.

During the forum Energy efficiency as a national idea, Vladyslav Varnavskyy, environmental director of the Ukrainian company Interpipe, expressed his opinion on the regulation of greenhouse gases. "Currently, all industrial enterprises that emit emissions are subject to an environmental tax on carbon dioxide emissions at the same rate. It does not consider whether the plant is modernized to reduce emissions or not. The approach shown by Ukraine is fiscal and does not stimulate enterprises to reduce emissions," commented Varnavskyy.

Today in Ukraine, very few enterprises meet European environmental requirements in their production. For example, the CO2 emissions trading system in a number of European countries is based on the allowance pricing system. Before the launch stage, this system took about 3 years to develop, and another 5 years went by before the stage of reducing quotas.

"The free quota is set at the level of best practice, and anything higher is payable or bought on the market. The expert emphasized that this is more logical and motivates enterprises to reduce emissions," expert emphasized.

According to Varnavskyy, the European system of trading in quotas took three years to develop until it was fully launched, and five years passed before the gradual reduction of quotas began. "A similar period is needed for the future Ukrainian system, but it's necessary to start now. And only after that is it appropriate to talk about the goals and amounts of payments from the environmental fund," concluded the expert.

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