The EU Recognizes a Special Legal Regime for Ukrainian Electricity

Thursday, July 15, 2021
The EU Recognizes a Special Legal Regime for Ukrainian Electricity

The Carbon Import Adjustment Mechanism (CCAM) recognizes a special legal regime for Ukrainian electricity. This was announced by the deputy minister of economy of Ukraine Taras Kachka

"First victory for climate diplomacy. SWAM recognizes Ukraine's special legal regime," he wrote on Facebook.

He explained that the draft regulation on CBAM, promulgated on July 14, in paragraph 47 of the preamble, marks the special legal regime of countries that are parties to association agreements containing an in-depth and comprehensive free trade agreement. Kachka added that there are three such countries: Ukraine, Moldova, and Georgia.

The sales representative stressed that the possible exception applies only to electricity, while metallurgy, fertilizers, cement, and others are subject to CBAM.

"Yes, there are industrial and" rel="dofollow">energy facilities in Ukraine that can scare everyone with their emissions. But everything is not so bad here. And Ukrainian society, politicians, and businesses are striving for climate-friendly modernization. And I am sure that we will be climate-friendly. neutral by 2050. Together with the EU," said Kachka.

The EU regards the CBAM as a special fiscal instrument that is designed to force manufacturers of imported products to pay the same price for CO2 emissions as European producers pay. For Ukrainian producers, SVAM means an increase in costs, since Ukraine's opportunities for state stimulation of decarbonization and the ability of businesses to attract financing are much less than in the EU.

In May of this year, Ukraine held negotiations on CBAM in Brussels. The Cabinet then stated that CBAM will be "soft", its structure will be simple, but the goal of the European Commission is to gradually reduce free permits, and overtime to include a wide range of goods.
Ukraine ranks first in Europe in terms of fly ash emissions (PM10) — 72% of the total emissions on the continent, in first in terms of sulfur dioxide (SO2) emissions — 27% and second in terms of emissions of nitrogen oxides (NOx) — 16 %. The cabinet of ministers estimates that Ukraine will need more than 100 billion euros of capital investment over the next 10 years to reduce emissions to 35% of 1990 levels.

The European Commission has prepared a major package of legislative proposals to achieve one of its main goals — to reduce carbon dioxide emissions by EU member states by 55% by 2030.

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