Ukraine’s reconstruction should be compliant with European standards for climate
This was announced on April 27, during the workshop “EU Emissions Trading System: Theory and Practice””, organized by the European and British offices of ArcelorMittal on the platform of the EBA Industrial Ecology and Sustainable Development Committee.
The event began with an introductory speech by Stanislav Zinchenko, Chairman of the EBA Industrial Ecology and Sustainable Development Committee who analyzed the potential risks of introducing a quota-trading scheme (ETS) in Ukraine. These include the application of the CO2 emissions tax and the quota market to enterprises, the misuse of funds from the sale of quotas by the state, as well as significant differences between the Ukrainian and European ETS models, which may further negatively affect the use of different carbon mechanisms to Ukrainian imports, along with border carbon adjustments.
The second part of the meeting was dedicated to the practical part of the operation of ETS in the EU. Thus, Cristina Moro Marcos, GM, Head of Corporate Environment and Climate Change Affairs ArcelorMittal, shared her experience. There was a discussion of the role of ETS in the EU’s climate policy and its basic principles in all four phases since 2005, as well as the issue of state support for ETS member companies. In addition to free quotas, some EU member states also compensate for the costs associated with indirect emissions (from energy used in manufacturing) for the most energy-intensive industries.
The ArcelorMittal representative also identified four stages of effective operation of the quota market:
- Basic level: free quotas, compensation for indirect costs, circular economy, sustainable financing.
- Support for technology development (Clean Steel Partnership / SPIRE, Innovation Fund) and incentives for transitional investments (state aid for projects in the field of environmental protection and energy, contracts for differences, etc.).
- External factors, including the availability of clean energy sources.
- Improving the existing market, namely through the introduction of the criterion of carbon intensity in the procurement process, etc.
We hope that Ukrainian lawmakers in designing ETS in Ukraine will use the experience of business representatives, and as a result, both the economy and the environment will benefit! And it is very important that peace prevail in the country for this process to be continued.