Pathways for the decarbonisation of Ukraine’s power sector. Scenario comparison, impact of CBAM and the role of Ukraine’s upcoming Emissions Trading System (ETS)

The Policy Briefing “Pathways for the decarbonisation of Ukraine’s power sector. Scenario comparison, impact of CBAM and the role of Ukraine’s upcoming Emissions Trading System (ETS)” outlines possible pathways for the decarbonisation of Ukraine’s power sector. Different scenarios based on work by Low Carbon Ukraine and modelling by other recent studies outlining net-zero pathways for Ukraine, such as the Clean Energy Roadmap (COP28 Report) and a recent study by REKK, DIXI Group and IEF, are compared. The compared scenarios demonstrate that a full decarbonisation of the power sector by 2050, with 85-90% clean generation by 2030 and a coal phase-out between 2030 and 2035 is possible and can be economically attractive. An Emissions Trading System (ETS) for the power sector can stimulate a cost-optimal, market driven coal phase-out if carbon prices increase predictably. However, a strong price stability mechanism for Ukraine’s upcoming ETS, such as a fixed-price regime during a transitional phase or a price collar, is key to ensure carbon price certainty. A predictable price convergence to EU-ETS price levels is also essential to avoid a carbon price shock upon EU accession.

Author(s):
Rouven Stubbe

What is a Policy Briefing?

Similar to Policy Papers, current or possible future policy topics are discussed. The economic analysis and policy recommendations are presented in a concise manner, focussing on the core arguments and results.