On 1 January 2021, the Law of Ukraine No. 377-IX "On the Basics of Monitoring, Reporting and Verification of Greenhouse Gas Emissions" (the "Law") entered into force.
This Law harmonizes Ukrainian legislation with standards of EU Law (an obligation for Ukraine under the EU-Ukraine Association Agreement) and implements the provisions of Directives No. 2003/87/ЕС and No. 2004/101/ЕС. It also fulfills requirements under the United Nations Framework Convention on Climate Change and the Paris Agreement.
The Law introduces the following:
- The following emissions are subject to monitoring: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and other gaseous constituents in the atmosphere that absorb and emit infrared radiation.
- Each installation that produces or may produce greenhouse gas emissions is subject to the monitoring requirement.
- The legal entities or private entrepreneurs who operate the installations owned or used must monitor the emissions themselves (the "Operators" under the Law).
- Operators are free to choose the monitoring methods but must develop a monitoring plan. The competent state executive authority (the "Authorized Body") approves these plans.
- A special Unified Register is about to be created to collect information on all emission-producing installations. So-called verifiers and Operators submit all documents to the Authorized Body in hard copies or by physical mail until the Unified Register is officially launched.
- Operators submit their monitoring reports to the verifiers on an annual basis. The verifiers are certified contractors freely chosen by the Operator, who issue a certificate of conformity/non-conformity for each installation.
In order to ensure the provisions of Law clear and accurate, the Government of Ukraine is empowered under the Law to adopt:
- a list of activities and greenhouse gas emissions that are subject to monitoring, reporting, and verification;
- a procedure to monitor and report greenhouse gas emissions; and
- a procedure for the verification of Operator's reports on greenhouse gas emissions.
Therefore, the provisions of the Law should be understood and interpreted within the framework of delegated regulations adopted by the Government.
To implement the above, the Government of Ukraine adopted on 23 September 2020 Resolution No. 960. It details the procedures, calculation methods, and reporting requirements set forth by the Law.
The Law is one of the first necessary steps to improve the legal regulation of monitoring and reporting processes for greenhouse emissions in Ukraine. It should lead to a full-fledged market to trade emission quotas, which is common practice for EU member states.
For more information, please contact Asters Counsel Anzhelika Livitska and Senior Associate Bohdan Shmorhun.