14:25 05.01.2023

Rebuilding efforts will help make Ukraine an attractive, green economy – EC Executive Vice-President Timmermans

9 min read
Rebuilding efforts will help make Ukraine an attractive, green economy – EC Executive Vice-President Timmermans

Exclusive interview of the Executive Vice President of the European Commission for the European Green Deal Frans Timmermans to the Interfax-Ukraine agency

Author: Dmytro Koshovy

 

-- Ukraine this summer announced its intention to initiate negotiations on special conditions for participation in the CBAM rules. How realistic is this? What concessions can Ukraine count on?

-- I think that first of all this shows how determined Ukraine is to immediately work on the reconstruction and keep the economy going while its people fight for their freedom. Ukraine is choosing to rebuild modern infrastructure and industry, underpinned by clean energy and the EU will support these efforts.

The urgency right now is to ensure Ukrainians have enough energy to get through the winter, which we are working on together, for example by supplying electricity generators. This will mean that more carbon-intensive energy is produced in the coming months, but I don’t doubt Ukraine’s determination to rebuild a sustainable economy which does not depend on Russian fossil fuels. The EU’s and Ukraine’s interests are very much aligned here.

As regards CBAM, the starting point is that we want to avoid that efforts inside the EU to reduce greenhouse gas emissions lead to increased emissions elsewhere. The climate crisis is a global crisis, we can’t solve it by pushing emissions up in other places. We also want to encourage cleaner industrial production in other countries. Exemptions to CBAM are therefore not our starting point. Rather, we want to work with partners to help them clean their industrial production. After all, if the carbon embedded in your products is relatively low, CBAM will not apply to the same degree.

The system focuses on products, not countries. We designed CBAM in such a way that it is completely conform international trade rules. It will be introduced gradually over the next few years. In its initial, transitional phase, importers of goods in the scope of CBAM will only have to report the greenhouse gas emissions embedded in their imports of cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen. They will not yet have to pay for them. As we prepare for the system to become operational, the European Commission will discuss with countries how to account for their domestic carbon pricing systems, and how to minimize the administrative burden for goods coming from their territory.

 

-- In general, how far can Ukraine count on concessions in the implementation of eurointegration requirements in the field of ecology, taking into account the war and the lack of finances? 

-- This is a sensitive question. The European Union is ready to go to great lengths to support Ukraine in this barbaric war. I think that the decisions taken and the support provided make this very clear: they would have been unthinkable one year ago. The war has brought Ukraine closer to its European family than ever before. Since February 24th, Ukraine has shown how strong of a nation it is. I hesitate to call it ‘inspirational’, because the context is so horrible, but the bravery and resilience shown by Ukraine and its people teach us that the values we hold dear are worth fighting for. Our support will endure until Ukraine has won this war, which I know it will.

At the same time, the European Commission has to be strict when it comes to accession process and the so-called acquis communautaire that forms the European Union’s body of laws. It is the legal foundation of our Union and ensures that it functions on a day-to-day level. The same goes for the accession process, which is based on established criteria and conditions that need to be met. But of course Ukraine is not left to its own devices to implement these laws, whether in the field of ecology, energy or otherwise. Once it has fulfilled the criteria to start the accession process, there will be extensive support – both technical and financial – to help Ukraine move closer to full membership of the European Union. Ukraine’s future is European, and we want to help the country get there.

 

-- How to take into account the requirements of the Green Deal in the process of recovery of Ukraine? How much more expensive will it be, and is the EU ready to help cover this difference? 

-- The legislation underpinning the Green Deal will gradually become part of the acquis. Most of it is already, as many of the legal proposals to deliver the Green Deal are in fact changes to existing laws, such as our emissions trading system or environmental laws. Of course, the more these changes to the EU legislation are already taken into account as Ukraine rebuilds, the easier it will be to implement them in full once Ukraine’s accession process has started.

When we look at energy, Ukraine has already come very far regarding the set-up of its electricity and gas markets, including the unbundling and certification of the gas- and electricity transmission network operators and its electricity and gas market design based on the EU rules. All of this made it possible to link Ukraine up with the EU’s electricity grid in March last year.

On climate and environmental laws more effort will be needed. I cannot tell you how much this will cost, but I can tell you that making the transition to a green economy is the right way to go. This is where future markets are and it will bring more security as well. The costs of inaction will be far higher and I can assure you that the EU is ready to continue supporting Ukraine, now and in the future.

Considering the government’s strong dedication to Ukraine’s green transition and the country’s huge potential for producing renewable energy, I’m certain that rebuilding efforts will help make Ukraine an attractive, green economy.

 

-- How much has the EU become less dependent on Russian energy in 2022? What are your plans in this direction for 2023?

-- In the first weeks after the invasion, we formulated the plan to end our dependence on Russian fossil fuels: RePowerEU. It has been our guide ever since, and it is working. A Europe without Russian gas would have seemed impossible just a year ago, but the supply from Russia this autumn was 80% lower than last year. Sanctions on coal and oil are now also in force.

Instead of Russia, we have found other, reliable suppliers. We have also greatly increased the investment and installation rates of renewable energy. Finally, European citizens and businesses are saving a lot of energy, in part because of the high prices, and in part because of the weather anomalies this winter – we had an exceptionally warm October, and also now, with temperatures 10 to 15 degrees higher than they should be.

In 2023, and beyond, we will continue our transition away from Russian fossil fuels and towards renewable energy. We will continue to save energy,  prepare for next winter and work to refill gas storages with joint purchasing, and we will see faster permitting procedures for renewable projects. Simply swapping one fossil fuel supplier for another is not a long-term strategy; renewables are the future, because they provide energy sovereignty as well. Europe will never again let itself become so dependent on a single, outside supplier of energy, and make our energy system vulnerable to manipulation and blackmail. We have learnt our lesson there.

 

-- How much can Ukraine replace Russia in the future in the supply of energy resources for the EU? What could the European Commission offer to encourage European investors to invest in green energy projects in Ukraine after the war, in particular hydrogen projects? -

-- I see great potential for deeper energy cooperation between Ukraine and the European Union, especially on renewable gases, including  hydrogen and biomethane. It is one of the topics that I discussed early on with several government ministers, including Foreign Minister Kuleba. Ukraine’s energy system is already pretty well aligned with the EU’s, and the country has vast swathes of land where renewable energy installations could be built.

Aside from enabling Ukraine’s green transition, renewable energy has the benefit of being much more decentralized. Since the start of the war, Ukraine’s energy system has been consistently targeted by Russian missiles – and we’ve seen these attacks increase as Russia started to lose terrain, in a clear and cynical attempt to increase human suffering as winter approached. In response, the EU is working with partners to increase financial, technical, and practical help. Just recently, my colleague Kadri Simson visited Ukraine to discuss how we can rebuild your energy infrastructure.

Despite the fact that our deeper cooperation is brought about by crisis circumstances, it will form a solid basis for the future. Investors seek regulatory clarity and want to know the future direction of a country. Since the synchronisation of our power grids in March, the EU and Ukraine already operate as part of the same energy system. Our joint commitment to rebuild and repower the Ukrainian energy system with more renewables, greater energy efficiency, and green hydrogen is another strong signal to investors. All of this will help Ukraine attract investment into its energy system as it rebuilds the country.

 

-- What assistance is the EU ready to provide to Ukraine in assessing the environmental damage from the war unleashed by Russia and what, in your opinion, should be the priorities in eliminating this damage?

-- When I met Minister Strilets at the COP27 in Egypt, we discussed the environmental damage already caused by Russia’s war. It is an aspect that’s easily forgotten amidst the many horrors that this war has brought to Ukraine. But the destruction of ecosystems, the contamination of natural lands, and the damage done to wildlife habitats as a result of Russia’s wilful attacks on chemical plants, fuel depots, and oil wells will have long-lasting effects. The Ukrainian government is well aware of the needs and it is not for me to say what should be prioritized. The EU stands ready to provide support wherever possible to restore Ukraine’s flora and fauna.

I will add that, as someone who is very interested in ecocide as a new concept in international law, I am closely following Ukraine’s efforts to get recognition and compensation from international courts for the environmental damage done. Russia’s absolute disregard for international law makes me sceptical about the chances for actual compensation, but for the development of the concept and its application, further steps in this direction by Ukraine will be very relevant.

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