The ЕВА Emphasizes the Importance of Restoring Customs Control Over Imported Heaters

02/ 10/ 2024

The Consumer Electronics Committee of the European Business Association has repeatedly drawn the Government’s and the State Service of Ukraine on Food Safety and Consumer Protection’s (SSUFSCP) attention to the fact that, despite the ban, non-energy-efficient convection (turbo) boilers continue to be imported into Ukraine for the past three years. These boilers consume up to 25% more energy resources. In doing so, unscrupulous entrepreneurs violate the requirements of the Technical Regulation on the Ecodesign of Space Heaters and Combined Heaters, which has prohibited the placement of convection boilers on the Ukrainian market since August 29, 2022. This is happening largely due to the absence of state market surveillance by SSUFSCP inspectors and customs control. According to the Committees experts, approximately 50% of all boilers sold in Ukraine were non-energy-efficient and did not meet the technical regulation requirements (55,000 units in 2023 alone). The annual overconsumption of fuel by one non-efficient boiler compared to an energy-efficient one is approximately 580 m3 per year, with a boiler’s service life lasting at least 10 years. As a result, the overconsumption caused by banned heaters imported in 2023 alone will amount to approximately 319 million m3 of gas over 10 years, for which Ukrainian consumers will have to pay. This situation has also distorted the market, as responsible companies complying with the legislation and refraining from importing banned, non-energy-efficient boilers since August 2022 have lost a significant market share. Non-energy-efficient boilers are slightly cheaper, approximately by €100, a cost that is compensated within the first year of use due to energy savings (one non-energy-efficient boiler consumes 580 m3 more gas per year than a condensing boiler, which, even at the current gas price of 8 UAH per m3, results in savings of 4,640 UAH per year). However, if a buyer is unaware of the legislative ban and the energy overconsumption, for which they will pay over the years, they are likely to choose the cheaper boiler. The state also suffers significantly from this situation, as it not only loses tax revenue due to the reduced tax base but continues to subsidize the population’s energy overconsumption, based on market gas prices. Moreover, such gross violations of the technical regulation developed in accordance with EU legislation harm Ukraine’s path toward European integration. In light of this, the Consumer Electronics Committee Committee of the ЕВА has consistently advocated for the restoration of state market surveillance by SSUFSCP inspectors and customs control by representatives of the State Customs Service to ensure compliance with the technical regulation. On September 6, 2024, the Government adopted Resolution No. 1052, amending its Resolutions No. 303 of March 13, 2022 (regarding the moratorium on market surveillance inspections and exemptions from the moratorium), and Resolution No. 550 of May 3, 2022 (regarding the ban on customs control during martial law and exceptions to it). In particular, for a range of non-food products, both state market surveillance and customs control have been restored. However, for space heaters, only market surveillance by SSUFSCP inspectors has been resumed, while customs control has not. The ЕВА appreciates the restoration of market surveillance to ensure compliance with the requirements for space heaters. However, for the state to effectively combat violations of the technical regulation, it is necessary not only to detect banned models on the market but also to prevent their importation into Ukraine. This requires lifting the ban on customs inspections of heaters by amending the Governments Resolution No. 550.

In doing so, unscrupulous entrepreneurs violate the requirements of the Technical Regulation on the Ecodesign of Space Heaters and Combined Heaters, which has prohibited the placement of convection boilers on the Ukrainian market since August 29, 2022. This is happening largely due to the absence of state market surveillance by SSUFSCP inspectors and customs control.

According to the Committee’s experts, approximately 50% of all boilers sold in Ukraine were non-energy-efficient and did not meet the technical regulation requirements (55,000 units in 2023 alone). The annual overconsumption of fuel by one non-efficient boiler compared to an energy-efficient one is approximately 580 m3 per year, with a boiler’s service life lasting at least 10 years. As a result, the overconsumption caused by banned heaters imported in 2023 alone will amount to approximately 319 million m3 of gas over 10 years, for which Ukrainian consumers will have to pay.

This situation has also distorted the market, as responsible companies complying with the legislation and refraining from importing banned, non-energy-efficient boilers since August 2022 have lost a significant market share. Non-energy-efficient boilers are slightly cheaper, approximately by €100, a cost that is compensated within the first year of use due to energy savings (one non-energy-efficient boiler consumes 580 m3 more gas per year than a condensing boiler, which, even at the current gas price of 8 UAH per m3, results in savings of 4,640 UAH per year). However, if a buyer is unaware of the legislative ban and the energy overconsumption, for which they will pay over the years, they are likely to choose the cheaper boiler.

The state also suffers significantly from this situation, as it not only loses tax revenue due to the reduced tax base but continues to subsidize the population’s energy overconsumption, based on market gas prices. Moreover, such gross violations of the technical regulation developed in accordance with EU legislation harm Ukraine’s path toward European integration.

In light of this, the Consumer Electronics Committee Committee of the ЕВА has consistently advocated for the restoration of state market surveillance by SSUFSCP inspectors and customs control by representatives of the State Customs Service to ensure compliance with the technical regulation.

On September 6, 2024, the Government adopted Resolution No. 1052, amending its Resolutions No. 303 of March 13, 2022 (regarding the moratorium on market surveillance inspections and exemptions from the moratorium), and Resolution No. 550 of May 3, 2022 (regarding the ban on customs control during martial law and exceptions to it). In particular, for a range of non-food products, both state market surveillance and customs control have been restored. However, for space heaters, only market surveillance by SSUFSCP inspectors has been resumed, while customs control has not.

The ЕВА appreciates the restoration of market surveillance to ensure compliance with the requirements for space heaters. However, for the state to effectively combat violations of the technical regulation, it is necessary not only to detect banned models on the market but also to prevent their importation into Ukraine. This requires lifting the ban on customs inspections of heaters by amending the Government’s Resolution No. 550.