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Ukraine needs tangible reform in the field of industrial pollution

07/ 07/ 2021
  On May 21, the Verkhovna Rada of Ukraine failed for the second time to adopt draft Law №4167 on industrial pollution reform in the first reading. Thus, it was returned for revision. During the month, two more alternative draft laws were registered - №4167-2 and №4167-3. Besides, the third version of draft Law №4167 was registered on June 17. Among the remarks and proposals sent by the EBA, only the one regarding the revocation of the integrated environmental permit based on a court decision was included in draft law №4167. At the same time, other remarks of the business remained without due attention. First is the issue of excluding the underground mining and related operations, open pit mining of more than 25 hectares from the scope of the draft law as the activity type that is not regulated by Directive 2010/75 / EU on industrial emissions and for which there are no conclusions on best available techniques (BAT). Secondly is that although the procedure for issuing, suspending, and revoking an integrated environmental permit has been brought in line with current legislation, the procedure for obtaining an integrated permit for plant operators is established without exhaustive grounds for a refusal to issue, revoke or suspend the integrated permit. This, in turn, can lead to risks of abuse by permitting authorities. Thirdly, the installation of automated equipment for monitoring emissions of pollutants, which should be transmitted in real-time to the permitting authority and made public via the Internet, remains an unresolved issue. The new version of draft law №4167 provides a backup mechanism for the period of disrupted communication between the installed automated equipment and the permitting authority. However, the proposal to install equipment at all emission sources continues to run counter to Directive 2010/75 / EC, which provides for such requirements only in the BAT conclusions and only for a certain list of installations. Besides, the alignment of existing approaches to the continuous measurement of emission limit values ​​from stationary sources with the provisions of Directive 2010/75 / EU, has not yet begun. Fourth, the draft law is still not in line with the National Plan for Reducing Emissions from Large Combustion Plants (LCPs), in particular, concerning the insufficient “transition period” for operators of installations in the energy category, as well as the right to operate in transition based on existing special permits before their expiration date. In this case, there is a risk of a complete shutdown of the energy sector, which could have irreparable consequences for the economy as a whole. Fifth, representatives from the business community, the Ministry of Economy, and the Ministry of Finance again seem not involved in the process of developing and approving the BAT. Moreover, in the text of draft law №4167, there was a negative provision, in particular, regarding the endowment of the Ministry of Environment with discretionary powers, in terms of calculating the economic feasibility of the introduction of BAT and the decision to grant a derogation. According to business, BAT and any economic calculations should be approved exclusively at the level of the Cabinet of Ministers of Ukraine, which will ensure compliance with the requirements of the Directive on the establishment of transparent, non-discriminatory regulatory rules. Sixth, there is a clear deadline for the introduction of new economic standards under the BAT - starting from January 1, 2028. Given the experience of EU countries, some of the countries are still in the process of implementing BAT. Therefore, such terms seem unrealistic for Ukraine in the current economic situation. Seventh, draft Law №4167 maintains a lack of understanding of potential funding sources for eco-modernization or incentives for state support for companies that will implement BAT. The proposed instruction to the Cabinet of Ministers does not seem sufficient to cover the costs of companies for eco-modernization, which are estimated at more than 10 billion dollars. Meanwhile, some relevant provisions that address some of the above remarks are contained in draft laws №4167-2 and №4167-3. That is why the business proposes to consolidate the proposals of alternative draft law while finalizing the text of draft Law №4167. Otherwise, the European Business Association is not ready to support the current version of this draft law. We hope that a consensus will be found and a tangible reform of industrial pollution control in Ukraine will take place. Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

On May 21, the Verkhovna Rada of Ukraine failed for the second time to adopt draft Law №4167 on industrial pollution reform in the first reading. Thus, it was returned for revision.

During the month, two more alternative draft laws were registered – №4167-2 and №4167-3. Besides, the third version of draft Law №4167 was registered on June 17.

Among the remarks and proposals sent by the EBA, only the one regarding the revocation of the integrated environmental permit based on a court decision was included in draft law №4167. At the same time, other remarks of the business remained without due attention.

First is the issue of excluding the “underground mining and related operations, open pit mining of more than 25 hectares” from the scope of the draft law as the activity type that is not regulated by Directive 2010/75 / EU on industrial emissions and for which there are no conclusions on best available techniques (BAT).

Secondly is that although the procedure for issuing, suspending, and revoking an integrated environmental permit has been brought in line with current legislation, the procedure for obtaining an integrated permit for plant operators is established without exhaustive grounds for a refusal to issue, revoke or suspend the integrated permit. This, in turn, can lead to risks of abuse by permitting authorities.

Thirdly, the installation of automated equipment for monitoring emissions of pollutants, which should be transmitted in real-time to the permitting authority and made public via the Internet, remains an unresolved issue. The new version of draft law №4167 provides a backup mechanism for the period of disrupted communication between the installed automated equipment and the permitting authority. However, the proposal to install equipment at all emission sources continues to run counter to Directive 2010/75 / EC, which provides for such requirements only in the BAT conclusions and only for a certain list of installations. Besides, the alignment of existing approaches to the continuous measurement of emission limit values ​​from stationary sources with the provisions of Directive 2010/75 / EU, has not yet begun.

Fourth, the draft law is still not in line with the National Plan for Reducing Emissions from Large Combustion Plants (LCPs), in particular, concerning the insufficient “transition period” for operators of installations in the energy category, as well as the right to operate in transition based on existing special permits before their expiration date. In this case, there is a risk of a complete shutdown of the energy sector, which could have irreparable consequences for the economy as a whole.

Fifth, representatives from the business community, the Ministry of Economy, and the Ministry of Finance again seem not involved in the process of developing and approving the BAT. Moreover, in the text of draft law №4167, there was a negative provision, in particular, regarding the endowment of the Ministry of Environment with discretionary powers, in terms of calculating the economic feasibility of the introduction of BAT and the decision to grant a derogation. According to business, BAT and any economic calculations should be approved exclusively at the level of the Cabinet of Ministers of Ukraine, which will ensure compliance with the requirements of the Directive on the establishment of transparent, non-discriminatory regulatory rules.

Sixth, there is a clear deadline for the introduction of new economic standards under the BAT – starting from January 1, 2028. Given the experience of EU countries, some of the countries are still in the process of implementing BAT. Therefore, such terms seem unrealistic for Ukraine in the current economic situation.

Seventh, draft Law №4167 maintains a lack of understanding of potential funding sources for eco-modernization or incentives for state support for companies that will implement BAT. The proposed instruction to the Cabinet of Ministers does not seem sufficient to cover the costs of companies for eco-modernization, which are estimated at more than 10 billion dollars.

Meanwhile, some relevant provisions that address some of the above remarks are contained in draft laws №4167-2 and №4167-3. That is why the business proposes to consolidate the proposals of alternative draft law while finalizing the text of draft Law №4167. Otherwise, the European Business Association is not ready to support the current version of this draft law.

We hope that a consensus will be found and a tangible reform of industrial pollution control in Ukraine will take place.

Be the first to learn about the latest EBA news with our Telegram-channel EBAUkraine.

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