Ukraine

With adopted strategies not yet establishing a clear link between the energy sector and climate action, Ukraine’s NDC targets are being revised to increase the country’s ambition.

IAM COMPACT will help develop capacities and produce comprehensive modelling of the energy- climate-environment nexus, toward underpinning data-driven climate policies pertinent to Ukraine’s current needs, and integrating a robust hydrogen strategy in the upcoming Integrated Energy and Climate plan.

Ukraine is classified as a lower middle-income country ranking 56th in the world in 2020 by the size of nominal GDP in absolute terms (Government of Ukraine, 2021). In 2023, gross domestic product (GDP) was USD 178.76 billion with 5.3% annual growth after 28.8 collapse in 2022 stemmed from Russian invasion and GDP per capita at USD 5181.4 (World Bank Group, 2024). The economy is dominated by industry and the agriculture sector (Government of Ukraine, 2021) being heavily impacted by the ongoing war. Estimated GDP losses in 2022 reflect a major disruption of economic activities. This includes damage to productive assets and infrastructure, logistical problems, labour force losses, ruined supply-demand chains, uncertainty and elevated risks (UNIDO, 2023). 

Ukraine became independent in 1991 when the Soviet Union dissolved and declared neutrality. Since 2014 when Russia annexed Crimea, Ukraine is in a military conflict with Russia and in an ongoing war since the Russian invasion in February 2022. With the evolving military conflict and change in government in 2014, political orientation shifted towards the European Union (Association Agreement). Already in 2011, Ukraine became a contracting Party to the Energy Community Treaty involving commitments to reform legislative frameworks, in particular to enable private participation in the electricity and gas sectors (OECD, 2021).

In 2021, Ukraine’s GHG emissions, including land use, land use change and forestry (LULUCF), totalled 341.5 million tonnes of CO2 equivalent (Mt CO2e) – a huge decrease from 911.4 Mt CO2-eq in 1990. CO2 accounted for around two-thirds of total GHG emissions in 2021; CH4 for 21% and N2O for 13% (MEPR 2023). The share of energy-related emissions was recorded at 64% of total GHG emissions in 2021. The industrial processes and product use (IPPU) were responsible for 18% of total GHG emissions, agriculture for 14%, and waste contributed only 4% to total GHG emissions. The major reduction achieved in GHG emissions is attributed to deindustrialisation of the economy and economic stagnation. Ukraine’s carbon intensity, however, remains one of the highest in the world exceeding the global and European average levels, despite the recent trends in reducing the greenhouse gas emissions and indicating the need for investment to modernise its energy, industry, agriculture and transport sectors (Zanizdra, 2022). It has to be generally mentioned that access to data after 2021 is difficult as legal entities are not obliged to report to the SSSU since the invasion. Some data is classified by the government as confidential after Russia launched missiles attacks on energy infrastructure and therefore not publicly available. This report hence uses latest available data. Some analysis and ratings such as the Climate Action Tracker have suspended their rating for Ukraine “as the country defends itself from the unlawful Russian invasion”. 

More information can be found in D6.6 – Report on drivers, barriers, and policy analysis (DOI 10.5281/zenodo.13643213)

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