This policy briefing is based on LCU’s Policy Proposal “Policy reforms supporting Ukraine’s green reconstruction” and looks specifically at recommendations for policy reforms in Ukraine’s heat sector with a focus on district heat. While there are important economic reasons for a green reconstruction of Ukraine’s heat sector, substantial regulatory obstacles and disincentives need to be overcome to mobilise the necessary investments in low-carbon assets. Key policy reforms should include phasing out gas subsidies, tackling payment discipline, implementing tariff reform towards incentive-based regulation, harmonising district heating regulations, adequate carbon pricing, strengthened social transfers, and improved governance of state-owned enterprises.