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Re-engineering Ukraine’s Economy Around a Green Transformation

by Roman Cheplyk
Tuesday, July 1, 2025
2 MIN
Re-engineering Ukraine’s Economy Around a Green Transformation

Stockholm Environment Institute’s 2025 assessment says decarbonisation, clean industry and “green-skills” investment can turn war-time reconstruction into a fast-track toward EU membership

Core take-aways from the SEI “National Green Transformation Assessment” (released 30 June 2025)

Dimension Snapshot of findings Priority levers (2025-2028)
Energy Destruction of legacy power stations + EU security rules favour a structural pivot away from coal & imported gas. • Accelerate renewables auction pipeline
• Finalise design of national Emission Trading System (ETS)
• Launch pilot green-hydrogen corridors with EU.
Industry Metallurgy, chemicals and cement can only maintain EU market share if carbon intensity falls sharply (CBAM pressure). • Fund deep-retrofit of three flagship steel plants
• Mandate ISO 50001 energy-management across SOEs
• Create “Green Industrial Parks” with circular-economy standards.
Agriculture & land use War-time soil degradation high, but regenerative methods and bio-energy crops can raise yields and cut emissions. • Scale climate-smart agri advisory service
• Fast-track biomethane certification for EU export
• Roll out satellite-based soil-health monitoring.
Transport & logistics Rail electrification gains slowed by missile strikes; road fleet still diesel-heavy. • Target 50 % rail-freight electrification by 2030
• Introduce e-bus and electric last-mile incentives
• Synchronise truck CO₂ standards with EU by 2028.
Digital & defence tech Wartime drone / AI clusters illustrate capacity for dual-use innovation. • Channel defence-tech spin-offs into civil-green applications (smart grids, precision farming)
• Expand STEM retraining (“green skills”) for veterans.

Why SEI calls the current moment a “build-back-better window”

“Ukraine can leapfrog straight to EU-level environmental acquis instead of reinstating pre-war fossil infrastructure.”Hanna Gladkikh, project lead

  1. EU accession anchoring: alignment with the EU Green Deal, CBAM and Fit-for-55 packages is non-negotiable for membership talks; early moves prevent future trade friction.

  2. Capital inflow conditions: IFIs and URC-25 donors are tying finance to climate-resilient, low-carbon benchmarks.

  3. Domestic public support: surveys show +70 % approval for renewables and energy-efficiency spending in reconstruction budgets.

  4. Digital advantage: Diia-style e-government and battlefield-honed tech sectors shorten permitting, monitoring and compliance timelines.


Immediate policy actions proposed

  • Integrate “Green test” into every Recovery Plan project appraisal (energy, resource, climate metrics).

  • Pass ETS framework law by Q1-2026; pilot in power & metals.

  • Create a €1 bn Green-Skills Fund (grants + vocational training) for veterans and displaced workers.

  • Adopt hydrogen roadmap aligned with EU Renewable & Low-Carbon Fuels Value Chain Alliance.


Next milestone: Outcomes will feed into the Ukraine Recovery Conference (Rome, 10-11 July 2025), where Kyiv seeks multi-year “green finance” commitments.

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