Creation of the Climate Fund in Ukraine

On 10 November 2020 Mr. Roman Abramovskyi, the Minister of Environmental Protection and Natural Resources of Ukraine, announced the creation of the Ukrainian Climate Fund (UCF). The UCF will be a separate legal entity, which will accumulate all environmental taxes and spend them on environmental measures.

The Minister highlighted that the Ukrainian Climate Fund will be based on the following principles:

  • Independence from the State budget will allow the funds of the fund “from A to Z” to be spent on improving the environment.
  • The transparent management structure of the fund will help attract additional funds from international projects, including in the framework of the Green Agreement.
  • Understanding the amount of annual funding will allow you to plan and implement long-term projects.
  • Introduction of different levels of support will cover both projects that require only co-financing and projects that require 100% investment.

This decision has been preceded by discussions, including the round table “Improvement of environmental taxation” organized by the Committee on Finance, Tax and Customs Policy of the Verkhovna Rada (the Parliament) of Ukraine on 16 October 2020.

EU4Environment has supported the Ministry of Environmental Protection and Natural Resources of Ukraine in preparing for the round table. The OECD experts Ms Nelly Petkova and Ms Isabella Neuweg have provided expertise on the current environmental status and trends in the OECD countries, as well as advantages and disadvantages of using environmental revenues through the general budget and dedicated funds. Ms Olena Maslyukivska, EU4Environment’s National Action Coordinator in Ukraine, has prepared an overview of the National Environment Funds in the Central and Eastern Europe with data on sources of revenues and expenditures. A particular emphasis was made on the experience of the National Fund for Environmental Protection and Water Management of Poland with its transparent governance structure. It allows to leverage budget fund by investment and grants from other sources, as well as prioritize the expenditures in accordance with the national environmental policy.

A day earlier, on 09 November 2020, a group of Parliament members have registered a Draft Law on Amendments to the Budget Code of Ukraine on Introduction of the State Decarbonization Fund, according to which the State Decarbonization Fund will become a special fund of the State Budget of Ukraine.

While the discussion continues, the EU4Environment team offered its expert support to the Ministry of Environmental Protection and Natural Resources of Ukraine in developing the concept of the Ukrainian Climate Fund.

Published on 17/11/2020

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