Ukraine to launch monitoring of GHG emissions

On 12 December 2019, the Ukrainian parliament adopted the MRV Law implementing the European standards for monitoring of greenhouse gas emissions (GHG). This MRV Law, entitled On Principles of Monitoring, Reporting and Verification of GHG Emissions No. 0875, will go into force on 1 January 2021.

Aimed at gradually adapting Ukraine’s GHG emission monitoring legislation with EU laws in line with the Ukraine’s EU Association Agreement, the MRV Law is a prerequisite for introduction of market mechanisms for emission reductions. These mechanisms include the European Emissions Trading System (ETS) and non-market (GHG tax).

Before the adoption of the MRV Law, no mandatory legal rules adequately meeting EU requirements relating to the transparent monitoring and reporting of GHG emissions existed in Ukraine.

According to the MRV Law, operators of industrial installations will be required to have an approved plan for monitoring and reporting annual GHG emissions. Following the results of a monitoring year, operators of installations will have to prepare monitoring reports, subject to verification by an accredited verifier.

The MRV Law imposes the following obligations on all operators of industrial installations:

  • to register industrial installations emitting GHG in the unified state-owned registry (operators also will have to report any changes of information regarding industrial installations);
  • to develop a monitoring plan according to requirements set down in secondary legislation;
  • to submit the monitoring plan for the approval of the state authority;
  • to ensure the monitoring of GHG emissions according to the monitoring plan;
  • to develop an operator’s report and submit it for independent verification;
  • to submit the verified operator’s report to the state authority.

Note that the particular order for fulfilling obligations will be specified in secondary legislation currently being drafted.

Measures introduced by the MRV Law are expected to cover GHG emissions in key activities specified in Directive 2003/87/EC (13 October 2003), which established the scheme for GHG emission-allowance trading within the European Community. These activities include energy (e.g. fuel combustion, mineral oil refineries), production and processing of ferrous metals (e.g. metal ore roasting, pig iron and steel production) and the mineral industry (e.g. production of cement clinkers, manufacture of glass and ceramic products), etc.

The exact list of GHGs, the types of activities to be covered by the MRV system, and the detailed procedures for monitoring, reporting and verification will be specified in the secondary legislation now being drafted. The competent authority in Ukraine, the Ministry of Energy and Environmental Protection, will soon provide templates of all main MRV documents.

Adoption of the MRV Law is the next logical step towards Ukrainian integration with Europe in terms of compliance with the EU acquis on the environment and environmental protection. For more information on this eAlert, contact your regular CMS advisor or local CMS experts: Vitaliy Radchenko and Anna Pogrebna.

Authors:

Vitaliy Radchenko, Partner, vitaliy.radchenko@cms-cmno.com

Anna Pogrebna, Partner, anna.pogrebna@cms-rrh.com