March 13, 2024 — Past Events

Presentation of CBAM and ETS studies in Kyiv

On March 7th, LCU consultant and energy economist Rouven Stubbe presented the policy studies on the EU Carbon Border Adjustment Mechanism (CBAM) and the upcoming Emissions Trading System of Ukraine to an audience of energy professionals from public and private energy companies, the Market Operator, transmission system operator Ukrenergo, the Regulator and representatives from relevant Ukrainian Ministries. Yaroslav Demchenkov, Deputy Minister of Energy of Ukraine, delivered the introductory remarks.

The first part of the meeting focused on the Policy Paper “Exemption of electricity exports from EU-CBAM”.  The study highlights the conditions under which Ukrainian electricity exports to the EU could be exempted from the new EU Carbon Border Adjustment Mechanism (CBAM), which has been in effect since October 2023. To achieve this exemption, Ukraine must meet several requirements. While some progress has been made, significant steps remain to be taken, in particular the full implementation of the latest EU electricity market acquis, the introduction of an Emissions Trading System (ETS) with pricing aligned to EU-ETS by 2030 and the establishment of a system to prevent indirect electricity imports from non-compliant third countries.

The second part presented the Policy Proposal “Designing a suitable Emissions Trading System for Ukraine”, which outlines the challenges and strategies for Ukraine to align its carbon pricing and emissions trading frameworks with EU standards. It focuses on the design of the ETS, considering options such as a transition period with fixed prices or a price collar with an increasing carbon price floor. The proposal emphasises the need for predictable carbon prices to encourage investment in green and low-carbon assets, and the importance of designing an ETS that converges with EU price levels to avoid future carbon price shocks.

You can access the studies under the following links: