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Association сalls for further refinement of alternative draft laws on the national emissions trading system

19/ 08/ 2026
  Experts from the European Business Association’s Industrial Ecology and Sustainable Development Committee analysed alternative draft laws No. 15386-1 and No. 15386-2 on establishing a national greenhouse gas emissions trading system (ETS) and aligning it with the European Union Emissions Trading System (EU ETS). The business community welcomes a number of the proposed approaches, including the phased implementation of the ETS, more predictable conditions for businesses to adapt, longer transition periods, and consideration of Ukraine’s economic conditions when determining the price of allowances. The business community also supports the decarbonisation credit certificate mechanism, which would allow companies’ investments in their own decarbonisation projects to be taken into account. Draft Law No. 15386-2 also contains a positive provision allowing financial support for decarbonisation projects using ETS revenues, covering up to 30% of their cost, as well as a proposed voluntary carbon adjustment mechanism for exports. At the same time, certain provisions of the draft laws require substantial further refinement. The Association’s key proposals include: establishing a separate dedicated Fund, with ETS revenues prioritised for large-scale decarbonisation and industrial modernisation projects, alongside transparent and non-discriminatory access to funding; abolishing the environmental tax on CO₂ emissions once the ETS is fully operational, in order to avoid double pricing of emissions; comprehensively regulating the tax treatment of transactions involving allowances and decarbonisation credit certificates; allowing decarbonisation credit certificates to be issued for both ongoing and completed projects, provided that actual emissions reductions are verified; ensuring a sufficient transition period for businesses to prepare and postponing the entry into force of requirements concerning greenhouse gas emissions permits until at least 1 January 2029; setting the threshold for a substantial change in an installation’s capacity at 50% as the point at which amendments to the permit would be required; reviewing the enforcement measures for violations of ETS requirements to ensure that they are proportionate to the nature of the violation; with regard to Draft Law No. 15386-2, retaining the voluntary nature of carbon adjustment for exports and obtaining the European Commission’s official position on whether such a mechanism could be recognised within the CBAM framework. The Association emphasises that the draft laws require further refinement to reflect the real needs of industrial enterprises, the specific circumstances of Ukraine’s post-war recovery, and the need to create predictable conditions for investment in decarbonisation.

Experts from the European Business Association’s Industrial Ecology and Sustainable Development Committee analysed alternative draft laws No. 15386-1 and No. 15386-2 on establishing a national greenhouse gas emissions trading system (ETS) and aligning it with the European Union Emissions Trading System (EU ETS).

The business community welcomes a number of the proposed approaches, including the phased implementation of the ETS, more predictable conditions for businesses to adapt, longer transition periods, and consideration of Ukraine’s economic conditions when determining the price of allowances.

The business community also supports the decarbonisation credit certificate mechanism, which would allow companies’ investments in their own decarbonisation projects to be taken into account. Draft Law No. 15386-2 also contains a positive provision allowing financial support for decarbonisation projects using ETS revenues, covering up to 30% of their cost, as well as a proposed voluntary carbon adjustment mechanism for exports.

At the same time, certain provisions of the draft laws require substantial further refinement.

The Association’s key proposals include:

  • establishing a separate dedicated Fund, with ETS revenues prioritised for large-scale decarbonisation and industrial modernisation projects, alongside transparent and non-discriminatory access to funding;
  • abolishing the environmental tax on CO₂ emissions once the ETS is fully operational, in order to avoid double pricing of emissions;
  • comprehensively regulating the tax treatment of transactions involving allowances and decarbonisation credit certificates;
  • allowing decarbonisation credit certificates to be issued for both ongoing and completed projects, provided that actual emissions reductions are verified;
  • ensuring a sufficient transition period for businesses to prepare and postponing the entry into force of requirements concerning greenhouse gas emissions permits until at least 1 January 2029;
  • setting the threshold for a substantial change in an installation’s capacity at 50% as the point at which amendments to the permit would be required;
  • reviewing the enforcement measures for violations of ETS requirements to ensure that they are proportionate to the nature of the violation;
  • with regard to Draft Law No. 15386-2, retaining the voluntary nature of carbon adjustment for exports and obtaining the European Commission’s official position on whether such a mechanism could be recognised within the CBAM framework.

The Association emphasises that the draft laws require further refinement to reflect the real needs of industrial enterprises, the specific circumstances of Ukraine’s post-war recovery, and the need to create predictable conditions for investment in decarbonisation.

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