In the pursuit of a climate-neutral Europe by 2050, Ukraine’s energy sector faces a complex challenge, according to a recent study published in the *Economic Bulletin of the State Higher Educational Institution Ukrainian State University of Chemical Technology*. The research, led by Alla Tkachenko from the “Zaporizhzhia Polytechnic” National University, sheds light on the ambivalence surrounding the decarbonization process and its potential commercial impacts on Ukrainian energy enterprises.
As Ukraine aligns with the European Green Deal, the path to decarbonization is fraught with obstacles. The European Union’s planned introduction of a cross-border carbon regulation mechanism, known as the Carbon Border Adjustment Mechanism (CBAM), could significantly impact Ukrainian energy exports. “For Ukraine, such a mechanism could be an obstacle to the decarbonisation of the economy,” Tkachenko emphasizes, highlighting the country’s current status as one of the most carbon-intensive economies among EU candidates.
The study underscores that energy enterprises, particularly those reliant on coal, are the most vulnerable to CBAM due to their high carbon emissions. Tkachenko explains, “Energy enterprises are generally recognized as the most vulnerable to CBAM, which is due to the high carbon content of marginal coal-generating capacities.” This vulnerability could hinder Ukraine’s ability to export electricity to the EU, especially if the Ukrainian energy system synchronizes with ENTSO-E and the electricity markets consolidate.
However, the research also presents a silver lining. Energy producers with relatively zero or low-emission generation could continue to export electricity to the EU even under CBAM. This scenario underscores the urgent need for Ukraine to accelerate its decarbonization efforts to avoid negative commercial impacts.
The study proposes both supranational and national measures to mitigate the pressure of decarbonization on energy companies. These measures include accelerating the decarbonization of the energy sector and transitioning to climate neutrality. The research serves as a wake-up call for Ukraine to address the ambivalence in its decarbonization process and take proactive steps to ensure a smooth transition to a climate-neutral economy.
As the energy sector grapples with these challenges, the insights from Tkachenko’s research could shape future developments in the field. The study not only highlights the potential commercial impacts of CBAM but also offers a roadmap for Ukraine to navigate the complexities of decarbonization. By taking decisive action, Ukraine can turn the ambivalence of the decarbonization process into an opportunity for growth and sustainability.