Program Overview
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Ukraine has significantly advanced its climate policy framework in recent years. Following the approval of its Nationally Determined Contribution (NDC2) in 2021, the country committed to reducing greenhouse gas emissions by 65% by 2030 and achieving carbon neutrality by 2060. To support these goals, a series of strategic documents were developed, including the Law on the Main Principles of State Environmental Policy until 2030, Strategy for the Development and Implementation of State Climate Change Policy Until 2035, Energy Strategy until 2035, and the Low Emission Development Strategy until 2050. A national MRV system has been operational since January 2021, with a resolution requiring transmission of real-time emissions monitoring data passed in September 2025.
Under the PMI Country Program, Ukraine has completed Phase one of its ETS readiness efforts, developing key design elements aligned with European Union (EU) Emissions Trading System (ETS) practices, including cap-setting, allowance rules, revenue use, and enforcement mechanisms, and delivering an ETS impact analysis. The program now focuses on legal framework development, stakeholder engagement, and implementation planning.
Country Market Based Approach
Emissions Trading
This includes three components. The first is development of major design elements of a national ETS, including issues such as the scope, an ETS registry, cap setting options and allocation rules, among others. Given Ukraine is a current EU candidate country, these design options will also be influenced by the design of the European Union’s ETS. The second component focuses on support to operationalize the ETS. This includes a legal gap analysis and recommendations on the regulatory and institutional set up for Ukraine’s ETS. Finally, stakeholder consultations will also be undertaken as part of the preparatory work. Further work on Ukraine is contingent on completion of this first phase of work and an enabling environment in the country.
Capacity building
Objectives & Activities
The PMI Program in Ukraine aims to support the country in implementing an Emissions Trading System (ETS) by providing technical assistance on:
- Assessment of ETS Design Elements: Finalize and refine ETS design components including cap-setting, allocation rules, enforcement mechanisms, and revenue use, drawing on EU ETS practices, to support regulatory decision-making.
- Legal Framework Development: Provide technical support to draft and align the ETS legal framework with Ukraine’s climate legislation and EU-linked carbon market expectations.
- Stakeholder Engagement and Capacity Building: Support government and key stakeholders through targeted communication activities, training sessions, and public engagement efforts to build awareness and readiness for ETS implementation.
- Sectoral Impact Analysis: Conduct further sector-specific analysis building on the completed ETS impact assessment to inform implementation planning and identify potential transition risks or opportunities.
Additional Resources
- Updated Nationally Determined Contribution (NDC) of Ukraine
- Strategy for the Development and Implementation of State Climate Change Policy Until 2035 (2024)
- Law on the Main Principles of the State Environmental Policy until 2030 (2019)
- Low Emission Development Strategy until 2050 (2017)
- MRV System Overview – Ministry of Environmental Protection and Natural Resources of Ukraine
- Online event: Emissions Trading System: How to implement the European System in Ukraine