Ukraine targets net zero but struggles to access finance

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Ukraine does not have EU resources but is not eligible for support from the Green Climate Fund to decarbonize its economy

Ukraine aims to achieve net zero emissions by 2060, under a government strategy released earlier this month.

Officials tell Climate Home News they would like to go faster, but don’t know where the money will come from.

While its GDP per capita is significantly lower than the world average, Ukraine is classified as a developed country in the United Nations climate process, which makes it ineligible for support from the Green Climate Fund. Neither does it benefit from EU membership like many of its neighbors.

Irina Stavchuk, deputy minister of energy and environmental protection, said Climate Home News investments are expected to triple in the 2040s to move closer to climate neutrality by 2050. This is based on modeling of the London-based European Bank for Reconstruction and Development and Ukraine. Institute of Economics and Forecasting.

“Having these economic calculations, it is very difficult for the government to just make promises without understanding how the investments would actually be made and made,” she said.

Anna Ackermann, a Kiev-based Eco Action activist, said 2050 is possible, at least in the energy sector. An Eco Action study conducted with the Institute for Economic Forecasting in Ukraine showed that a transition to 91% renewable energy by 2050 was “economically feasible” with existing technology.

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Oleksii Riabchyn is climate adviser to Deputy Prime Minister Olga Stefanishyna and Minister of Environment and Natural Resources Roman Abramovsky.

He said Ukraine was trying to reach net zero as quickly as possible but was in a “different league” from the EU on climate finance. “We are Shakhtar Donetsk in the Ukrainian Premier League and they are Real Madrid,” he said.

During the UN climate negotiations, Ukraine lobbied for access to GCF funding – so far without success.

Riabchyn said the country is “stuck in the middle” and “cut off from finances when we are in a very difficult situation when we have a war, an economic recession and modernizing our economy trying to do very painful reform.”

After the 2014 pro-EU Ukrainian revolution, Russia invaded parts of eastern Ukraine. Their forces continue to occupy these areas and the conflict, which has killed more than 10,000 people and displaced more than 1.5 million people, continues.

Ukraine’s per capita GDP is the lowest in Europe and lower than countries like Cuba, Bahrain and Botswana which have received GCF funding.

As it is not a member of the EU, Ukraine is not eligible for initiatives such as the € 17.5 billion Just Transition Fund, which helps coal-dependent countries like Poland to move away fairly from fossil fuels.

“It’s very easy to decide to close a mine. But it’s a very sophisticated policy what you do with the coal region – how do you retrain the workers, there has to be a just transition, ”Riabchyn said,“ and what resources are available for that? “

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Ukraine can get support from the Global Environment Facility, which has funded several programs on climate change. And the EU offers some support within the framework of its neighborhood policy.

Another potential source of revenue is Ukraine’s carbon tax, although at less than a dollar a tonne it represents the lowest carbon price in the world. It is currently in the general budget but could be earmarked for a climate fund co-financed by international donors, Stavchuk suggested.

Stavchuk said that one of the priorities of Ukraine’s Green Deal would be to invest in energy efficiency. The country is one of the least energy efficient in the world.

Most Ukrainians see their heating bills subsidized so that energy efficiency saves government and residents money, Stavchuk said.

For electricity, Ukraine relies mainly on nuclear and coal power plants. Stavchuk said these factories are “getting very old” and the country needs renewable energy and modern balancing facilities.

Ukraine’s main energy company DTEK plans to phase out coal by 2040 and the government has asked the Powering Past Coal alliance with a phase-out date of 2050, she said.

The country has large polluting industries such as steel and cement. Exports of these products to the EU are threatened by the carbon border adjustment mechanism proposed by the Union, which would tax them at the border.

Economy Minister Igor Petrashko calls for exemption from the border tax, on the basis that Ukraine strives to align with EU climate standards, including a net zero target for 2050.

Ukraine has high hopes of developing hydrogen, for domestic use and for export. “Europe has a love affair with hydrogen and we expect it to end in marriage and not, as usual, in divorce,” Riabchyn said.

But Ackerman is skeptical. “There are many unrealistic assumptions about the role of hydrogen which today is considered so huge in transforming transportation, heating, industries and everything. It shouldn’t be the priority. “



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