On 25 June 2024 the Cabinet of Ministers of Ukraine approved the National Energy and Climate Plan (NEC Plan) for the period up to 2030 as part of Ukraine's effort to achieve EU climate neutrality targets through a national energy climate plan that combines EU initiatives and national policies that reduce greenhouse gas emissions and develop the renewable energy sector.
The NEC Plan, a strategic document aimed at harmonising Ukraine's energy and climate policies to ensure sustainable development and economic recovery, was developed as part of Ukraine's obligations within the framework of the Treaty establishing the Energy Community in order to implement Regulation (EU) No. 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action.
Under the NEC Plan, Ukraine has adopted the following goals:
- to reduce greenhouse gas emissions by 65% compared to 1990 levels;
- to achieve a 27% share of renewable energy sources in total energy consumption;
- to deepen the diversification of energy sources and supply routes (i.e. no more than 30% from one supplier);
- to reach the primary energy consumption of no more than the equivalent of 72.224 million tons of oil and the final energy consumption of the equivalent of 42.168 million tons;• to increase the diversification of the source and routes of the energy supply with no more that 30% from a single supplier;
- to fully integrate Ukrainian electricity and natural gas markets into the European market;
- to increase marketability;
- to achieve climate neutrality in the energy sector by 2050.
Ukraine, however, faces the following problems in developing and implementing the NEC Plan:
- the continuation of the war and its consequences, including uncertainty about the extent of damage and the pace of recovery, and its impact on the implementation of policies and measures, as well as their pace and success;
- economic downturn and energy poverty, leading to a reluctance to rely on market-based pricing mechanisms for energy and services;
- weakened capacity of state institutions to carry out crisis management during the war and implement public policy in energy and climate, including reforms in line with EU legislation;
- accumulated debts in the gas and electricity supply chains that need to be comprehensively settled at the state level.
The NEC Plan’s measures on energy and climate are designed to align Ukraine’s energy policies with the EU’s Energy Union strategy, and promote sustainable, secure, and competitive energy systems by linking them to the five dimensions of the Energy Union:
- energy security, solidarity and trust;
- the fully integrated internal energy market;
- energy efficiency as a contribution to the moderation of energy demand;
- climate action and decarbonisation of the economy; and
- research, innovation and competitiveness.
The adoption of the NEC Plan demonstrates that despite the ongoing war, Ukrainian officials are supporting and implementing changes to the nation`s energy and climate policies.
For more information on energy and climate policies in Ukraine, contact your CMS advisor or our local CMS team: Maria Orlyk, Oleksandra Prysiazhniuk, Vitaliy Radchenko, Maryna Ilchuk.
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