Ukraine

This assessment includes our policy analysis from 30 July 2020 translated into our new rating methodology without new analysis of Ukraine’s climate policies since then, except the NDC update submitted in July 2021. We will fully analyse Ukraine in the coming months and the rating may change.

The CAT rates Ukraine’s climate targets and policies as “Highly insufficient”. The “Highly insufficient” rating indicates that Ukraine’s climate policies and commitments are not at all consistent with the Paris Agreement’s 1.5°C temperature limit. Ukraine’s updated 2030 emissions reduction target is rated as “Highly insufficient” when compared to modelled domestic emissions pathways and as “Insufficient” when compared with its fair-share contribution to climate action. While this is an improvement from the previous NDC, Ukraine needs to set a more ambitious target for emissions reductions. Their current policies lead to rising, rather than falling, emissions, and are consistent with 3°C to 4°C warming.

We rate Ukraine’s policies and actions as “Highly insufficient”. The “Highly insufficient” rating indicates that Ukraine’s policies and action in 2030 lead to rising, rather than falling, emissions and are not at all consistent with the Paris Agreement’s 1.5°C temperature limit. If all countries were to follow Ukraine’s approach, warming could reach over 3°C and up to 4°C. Planned policies would let emissions stabilise roughly at today’s level and rate “Insufficient”.

We expect Ukraine’s GHG emissions in 2020 will be 6% lower than in 2019: pre-COVID-19 they were projected to be 5% higher. Restricted travel mobility, reduced energy demand and production as well as a slowdown in industrial production due to the COVID-19 pandemic are leading to this projected drop in emissions.

In May 2020, the Ukrainian government approved the Economic Stimulus Program to help stabilise the economy. While the document mentions optimising the environmental tax to promote eco-friendly modernisations, links to climate and environmental policy are limited, and local environmental NGOs argued that money from the economic stimulus funds could be used for restructuring the coal industry to save mining jobs. If Ukraine neglects low carbon development strategies and policies, emissions could rebound and even overshoot previously projected levels by 2030, despite lower economic growth.

Ukraine’s energy sector is in severe crisis: due to quarantine measures both energy demand and production are decreasing, and the power sector payment regime is on the verge of collapse, potentially leading to a power crisis. The generous “green tariff” introduced to attract investments into renewables has led to investments in the order of USD 4.5 billion into wind and solar power in 2019 alone. The government, however, had only budgeted to buy roughly half of the renewable power that companies are likely to produce in 2020, and is now looking at a cumulative debt on the whole electricity market of about USD 1.87 billion and roughly the same for the gas market.

In January 2020, the Ministry of Energy and Environmental Protection published Ukraine’s 2050 Green Energy Transition Concept (Ukraine Green Deal). Overall, the concept focuses on reducing GHG emissions through improving energy efficiency and boosting the deployment of renewable energy. While this is a step in the right direction, the 2050 phase-out date for coal is too late, and under the current plan Ukraine will achieve carbon-neutrality only by 2070. To become effective the concept will still need to be supported by concrete policy measures through the National Energy and Climate Plan, which is expected to be completed in the second half of 2020.

After the July 2019 elections, the former head of the Ukrainian Association of Renewable Energy, Oleksiy Orzhel, was appointed Minister of Energy and Environmental Protection, which sent a positive signal. In March 2020 however, more than two-thirds of the Cabinet of Ministers, including Orzhel, were dismissed and leave behind a mixed legacy: while the publication of Ukraine’s Green Deal was a step forward, there was limited progress on other urgent matters such as coal phase-out, electricity market reform or a clear shift away from natural gas. The changes in government, followed by the COVID-19 pandemic have left the Ministry with an interim minister and no clear policy direction for the energy sector.

The full policies and action analysis can be found here.

We rate Ukraine’s NDC target as “Highly insufficient” when compared with modelled domestic pathways. The “Highly insufficient” rating indicates that Ukraine’s domestic target in 2030 is not at all consistent with the Paris Agreement’s 1.5°C temperature limit. If all countries were to follow Ukraine’s approach, warming could reach over 3°C and up to 4°C.

We rate Ukraine’s 2030 NDC target as “Insufficient” when compared with its fair-share contribution to climate action. The “Insufficient” rating indicates that Ukraine’s fair share target in 2030 needs substantial improvements to be consistent with the Paris Agreement’s 1.5°C temperature limit. If all countries were to follow Ukraine’s approach, warming could reach over 2°C and up to 3°C.

We do not assess Ukraine's climate finance.

Ukraine’s NDC includes the goal of reaching climate neutrality no later than 2060. Our assessment of this net zero target will follow later in the year.