country profile ukraine – energy and climate policies
DESCRIPTION
This country profile of Ukraine contains a comprehensive overview, description and assessment of the energy and climate policies in place. The presentation shows that Ukraine has significant GHG mitigation potential, but before this can be tapped, existing regulatory, economic, technical and infrastructural barriers should be removed. The European Copper Institute (ECI) had asked Ecofys to identify and assess climate and energy policies in countries outside the EU and provide recommendations for policy opportunities for the transition to a sustainable energy supply. Such a country profile is equally available for Morocco.TRANSCRIPT
Country profile of UkraineEvaluation of energy and climate policies
compared to the EU
By: Erika de Visser, Luis Janeiro, Yvonne de Bie,
Niklas Höhne
April 2013
© ECOFYS | |
Table of content
> Chapter 1 Introduction Slide 3
> Chapter 2 Methodology Slides 4-5
> Chapter 3 Results Slides 6 - 19
> Chapter 4 Conclusions Slides 20 - 25
> References Slide 26
> Annex I Overview of EU policies Slides 27 - 28
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Chapter 1: Introduction
Goal of the project:
> to evaluate climate and energy policies in countries outside of the EU and
to provide recommendations for policy opportunities for the
transition to a sustainable energy supply in the respective country.
Deliverables:
> to develop a methodology to evaluate energy and climate policies in non
EU countries.
> to apply the methodology to two non-European countries: Morocco and
Ukraine.
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Chapter 2: MethodologySegments
The analysis is categorized in key economic sectors (rows), and policy
areas (columns), which together determine the individual segments
(dotted lines) of the analysis:
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General energy and climate strategy
Energy supply
Industry
Buildings
TransportEn
erg
y E
fficie
ncy
Ren
ew
ab
le e
nerg
y
Lo
w c
arb
on
str
ate
gie
s
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Chapter 2: MethodologyIndicators and scores
> For each segment we analyse indicators for incentives and barriers,
which together form a coherent and consistent strategy to achieve a long-
term low-carbon future
> Each segment is scored for incentives and barriers:
– Incentives:
● 0: No incentives
● 4: Capturing the full technical mitigation potential in that segment
– Barriers:
● 0: no barriers
● - 4: prevents policies from achieving reductions for this segment
as much as positive incentives could support them
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Barriers
-4 -3 -2 -1 0
Incentives
0 1 2 3 4
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Chapter 3: ResultsOverview of policies
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Energy efficiency Renewables Low Carbon
EN
ER
GY
SU
PP
LY
• Tax exemptions and reductions on energy
efficient technologies and appliances and
CO2 taxation
• Low electricity tariffs do not allow for a
return on investment; subsidies on fuels
I B• Feed-in tariff scheme with high rates for
solar, wind, small hydro, and some
forms of biomass
• Administrative barriers for purchase of
electricity and for licensing
I B
• No relevant policy support in place
• Ukraine is considering a domestic
GHG emissions trading scheme.
I
IN
DU
ST
RY • Tax exemptions and reductions on energy
efficient technologies and appliances and
CO2 taxation
• No barriers found
I B
• Fiscal incentives for import to Ukraine,
sales and use of renewable energy
equipment in Ukraine
• Administrative barriers for licensing
I B
• No relevant policy support in place
• Ukraine is considering a domestic
GHG emissions trading scheme.
I
BU
ILD
IN
GS • Mandatory building energy code for new
buildings and standards for energy using
equipment in households
• Low electricity and heat prices
I B
• Fiscal incentives for import to Ukraine,
sales and use of renewable energy
equipment in Ukraine
• Low heat prices
I B
• No relevant policy support in place
TR
AN
SP
OR
T
• Excise tax on oil products
• Fuel subsidies
I B • Fiscal measures for biofuels in place,
including exemption from corporate
profit tax on income from sale of biofuels
and excise tax exemption for motor
biofuels
• Fuel subsidies
I B
• No relevant policy support in place
I
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Chapter 3: ResultsGeneral energy and climate strategy
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EFFICIENCY/RENEWABLES/LOW-CARBON
AssessmentScore
Ukraine
Score
EU
GENERAL CLIMATE
STRATEGY
• Ukraine has declared a long-term goal of a 50%
greenhouse-gas emissions reduction by 2050 from 1990
levels in the context of the UNFCCC, however a
comprehensive climate strategy to achieve this goal
is missing. The draft Updated Energy Strategy of Ukraine
to 2030 provides general guidelines, but does not provide
a strong foundation to drive action.
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Chapter 3: Results
Energy efficiency in energy supply
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ENERGY EFFICIENCY
AssessmentScore
Ukraine
Score
EU
ENERGY SUPPLY
Incentives
• The tax code (effective January 2011) includes a number
of instruments to energy efficiency: tax exemptions and
reductions to stimulate the use of energy efficient
technologies and appliances and CO2 taxation to
stimulate GHG emissions reduction from the supply side.
• No policy support/incentive to reduce grid distribution
losses.
Barr
iers
• Electricity tariffs do not allow for a return on
investment and subsidies on fuels.
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Chapter 3: ResultsRenewable energy in energy supply
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RENEWABLE ENERGY
AssessmentScore
Ukraine
Score
EU
ENERGY SUPPLY
Incentives
• Ukraine has a feed-in tariff system in place providing
differentiated and relatively high support for solar, wind, small
hydro and some forms of biomass. Electricity production from
animal waste, biogas and landfill gas is not eligible for feed-in
tariffs.
• In addition, some fiscal incentives apply to renewables, such
as tax exemptions on import and sales of equipment for
generating renewable energy and production and sales of
electricity or heat from renewables.
Barr
iers
• The system operator has no obligation to provide priority
dispatch for generation from renewable sources. Besides there
is no strategy for integration of renewables in the grid.
• Moreover procedures for getting licenses and permits to build
and operate renewable energy facilities are complex and time
consuming.
• Investors face significant risks, because they can only obtain
the feed in tariffs after the plant is constructed.
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Chapter 3: ResultsLow carbon technologies in energy supply
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LOW CARBON
AssessmentScore
Ukraine
Score
EU
ELECTRICITY
AND HEAT
SUPPLY Incentives
• No policy instruments to support fuel switch to low-
carbon fuels have been found. In contrary, some district
heating facilities have recently switched from gas to coal.
• There are no policy instruments to support CCS.
• Ukraine is considering a domestic GHG emissions trading
scheme. A draft law is to be presented to parliament by
the end of 2013.
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Chapter 3: ResultsEnergy efficiency in industry
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ENERGY EFFICIENCY
AssessmentScore
Ukraine
Score
EU
INDUSTRY
Incentives
• The tax code (effective January 2011) includes a number
of instruments to energy efficiency: tax exemptions and
reductions to stimulate the use of energy efficient
technologies and appliances and CO2 taxation to
stimulate GHG emissions reduction from the supply side.
Barr
iers
• There are no barriers identified, such as subsidies or tax
exemptions for fuels (e.g. coal, gas), in contrary to the
supply sector and transport.
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Chapter 3: ResultsRenewable energy in industry
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RENEWABLE ENERGIES
AssessmentScore
Ukraine
Score
EU
INDUSTRY
Incentives • Some fiscal incentives apply to renewables, such as
tax exemptions on import and sales of equipment for
generating renewable energy and production and sales of
electricity or heat from renewables.
Barr
iers • Procedures for getting licenses and permits to build and
operate renewable energy facilities are complex and time
consuming.
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Chapter 3: ResultsLow carbon technologies in industry
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LOW CARBON
AssessmentScore
Ukraine
Score
EU
INDUSTRY
Incentives • There are no policy instruments to support CCS.
• Ukraine is considering a domestic GHG emissions
trading scheme. A draft law is to be presented to
parliament by the end of 2013.
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Chapter 3: ResultsEnergy efficiency in buildings
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ENERGY EFFICIENCY
AssessmentScore
Ukraine
Score
EU
BUILDINGS
Incentives
• Ukraine has a mandatory building energy code for new
buildings since 2007. Compliance with the requirements from
the building code could be improved.
• Furthermore Ukraine has a number of national standards
and requirements for energy-using products in place. In
2011, actions were initiated to align with EU legislation on
labeling and technical regulations for household refrigerators,
freezers and washing machines. Transposition of the EU
labeling directive is expected at the end of 2012.
Barr
iers
• Current (subsidized) electricity and heating tariffs do not
provide residential homeowners with incentives to invest in
energy efficiency measures.
• Furthermore the lack of end-user control over energy
consumption and the absence of knowledge about the
benefits of residential energy efficiency and technical expertise
needed to develop bankable energy efficiency projects are key
barriers.
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Chapter 3: ResultsRenewable energy in buildings
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RENEWABLE ENERGY
AssessmentScore
Ukraine
Score
EU
BUILDINGS
Incentives • Some fiscal incentives apply to renewables, such as tax
exemptions on import and sales of equipment for
generating renewable energy and production and sales of
electricity or heat from renewables.
Barr
iers
• Current (subsidized) electricity and heating tariffs do not
provide residential homeowners with incentives to invest
in renewable energy
• Because the privatization process for housing has not
been fully completed, commercial banks are not
willing to give loans for renewables to homeowner
associations since they are set up as not-for-profit legal
entities, lack balance sheets and have neither guarantees
nor income streams. Revision of the homeowner
association legislation is planned for late 2012.
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Chapter 3: ResultsLow carbon technologies in buildings
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LOW CARBON
AssessmentScore
Ukraine
Score
EU
BUILDINGS
Incentives • There are no policy instruments to support a low-carbon
energy supply. In contrary, the government has launched
a program to replace natural gas by coal in district
heating plants.
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Chapter 3: ResultsEnergy efficiency in transport
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ENERGY EFFICIENCY
AssessmentScore
Ukraine
Score
EU
TRANSPORT
Incentives
• There are no fuel efficiency standards for light and/or
heavy vehicles in place. Though excise tax on oil
products exists.
Barr
iers • Lower prices due to taxation policy, poor quality products
and domestic oil production sold at prices below real
market levels.
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Chapter 3: ResultsRenewable energy in transport
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RENEWABLE ENERGY
AssessmentScore
Ukraine
Score
EU
TRANSPORT
Incentives
• In 2009, a number of support measures for biofuels
were introduced, including exemption from corporate
profit tax on income from sale of biofuels, and excise tax
exemption for motor biofuels production.
• The draft Updated Energy Strategy of Ukraine to 2030
projects gradual growth in demand for biofuels. In its
reference scenario, the mix of bioethanol in total gasoline
consumption will reach 10% by 2020 and 15% by 2030.
Barr
iers • Lower prices due to taxation policy, poor quality products
and domestic oil production sold at prices below real
market levels.
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Chapter 3: ResultsLow carbon technologies in transport
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LOW CARBON
AssessmentScore
Ukraine
Score
EU
TRANSPORT
Incentives
• No relevant policy incentives for electric mobility,
promotion of modal shifts or strategies to increase the
share of non-motorised transport have been found.
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Chapter 4: ConclusionsElectricity and heat supply
Sector assessment ‘electricity and heat supply’
> Current electricity tariffs do not allow for a return on investment and
price distortions on fuels do not promote efforts to increase
efficiency in energy the supply side.
> Although a feed-in tariff system is in place, there is no strategy for
integration and/or priority dispatch to the grid. Moreover,
procedures for getting licenses and permits to build and operate
renewable energy facilities are complex and time consuming. The
risks for investors are substantial since feed in tariffs can only be
obtained after plant construction.
> There is much to be gained in improving energy efficiency in
transmission and distribution networks. Though there is no policy
instrument to incentivize such investments.
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Chapter 4: ConclusionsElectricity and heat supply
Policy Recommendations ‘electricity and heat supply’
> Allow electricity producers to recover their full costs, e.g. increase
the regulated tariff in a socially acceptable way.
> Remove administrative barriers so that the feed in tariff can be
more effective.
> Expand the scope of the feed-in tariff scheme for renewables to
include technologies such as biogas.
> Introduce an incentive-based tariff for distribution and
transmission networks to trigger the required investments in
energy efficiency.
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Chapter 4: ConclusionsSector industry
Sector assessment ‘industry’
> Very little incentives for energy efficiency and renewable energy
found
> Energy subsidies are limited, in contrast to other sectors
Policy recommendations ‘industry’
> Improve the administrative environment to make sure that the
incentives have maximum impact.
> Introduce an obligation for energy management systems and
energy audits
> Set up an emissions trading scheme
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Chapter 4 ConclusionsSector buildings
Sector assessment ‘buildings’
> Current (subsidized) electricity and heating tariffs in the Ukraine and
the lack end-user control over energy consumption, do not provide
residential homeowners with incentives to invest in energy efficiency
measures.
Policy recommendations ‘buildings’
> Eliminate subsidies for electricity and heat end-use in a socially
acceptable way.
> Establish (more) strict building energy codes for new buildings as well
as buildings undergoing renovation. Enforce and regularly strengthen
the performance requirements for buildings. Establish timelines and
renovation rates for energy efficiency retrofits in existing buildings.
Provide all buildings with metering equipment.
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Chapter 4 ConclusionsSector transport
Sector Assessment ‘transport’
> Ukraine has neither energy efficiency nor renewable policy in
place or strategies to stimulate electric mobility, modal shift
and/or non-motorized transport.
Policy recommendations ‘transport’
> Adopt the European energy efficiency standards for light vehicles
and elaborate a standard for trucks
> Introduce modal shift or strategies to increase the share of non-
motorized transport.
> Create policy incentives for electric mobility
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Chapter 4 ConclusionsOverall conclusions
> Ukraine has significant GHG mitigation potential, mainly in the energy
supply sector, and related to energy consumption in the residential and
commercial sectors, primarily buildings and appliances, and in
industry.
> However, little of this potential has been tapped, owing to a number of
regulatory, economic, technical and infrastructural barriers.
> A priority could be to remove these barriers before putting in place
incentives through policies.
> In addition, the lack of systematic planning, monitoring and evaluation
of the programs and measures at the national and sectorial levels, is a
challenge that needs to be addressed in order to tap this mitigation
potential.
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References
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• Ecofys, 2011. EU Climate Policy Tracker. Published in November 2011 by WWF.
• Government of Ukraine (2012), draft Updated Energy Strategy of Ukraine for the
Period till 2030, June 2012, Kiev.
• OECD/IEA, 2012. Energy Policies beyond IEA Countries: Ukraine 2012.
• Ukrainian Programme of Economic Reform for the Period 2010-2014. Unofficial
translation available from
http://www.usubc.org/site/files/Ukraine_Program_of_Economic_Reforms_2010-
2014.pdf (last accessed December 2012)
• Building code for Ukraine (2006). Thermal protection of buildings. DBN V.2.6-
31:2006. Available from:
http://energycodesocean.org/sites/default/files/%20%C3%A9%202.6-31-
2006.pdf (last accessed December 2012)
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Annexes
> Annex I: Assessment of EU policies
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Annex I – Overview of EU policies
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Energy Efficiency Renewables Low carbon
General Climate
Strategy
Energy supply
• Energy Efficiency Directive
(2012/27/EU)
• Effort Sharing Decision (2009/406/EC)
• European Emissions Trading System
(ETS) (2009/29/EC)
• Energy Taxation Directive (2003/96/EC)
• Renewable Energy Directive
(2009/28/EC)
• Internal electricity market Directive
(2009/72/EC)
• Security of electricity supply and
infrastructure investment Directive
(2005/89/EC)
• Effort Sharing Decision (2009/406/EC)
• Carbon Capture and Storage
(CCS) Directive (2011/92/EU)
Industry
• Eco-design Directive (2009/125/EC)
• Energy Labelling Directive
(2010/30/EU)
• Energy Efficiency Directive
(2012/27/EU)
• European Emissions Trading System
(ETS) (2009/29/EC)
• Energy Taxation Directive (2003/96/EC)
• Renewable Energy Directive
(2009/28/EC)
• Carbon Capture and Storage
(CCS) Directive (2009/31/EC)
• Industrial Emissions Directive
(IED) (2010/75/EU)
• Landfill Directive (1999/31/EC)
Buildings
• Energy Performance of Buildings
Directive (EPBD) (2010/31/EU)
• Energy Efficiency Directive
(2012/27/EU)
• Eco-design Directive (2009/125/EC)
• Energy Labeling Directive (2010/30/EU)
• Energy Taxation Directive (2003/96/EC)
• Renewable Energy Directive
(2009/28/EC)
Transport
• Regulation on Energy Efficiency for
passenger cars (443/2009)
• European Emissions Trading System
(ETS) (2009/29/EC)
• Energy Taxation Directive (2003/96/EC)
• Renewable Energy Directive
(2009/28/EC)
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