This publication has been produced with the assistance of the European Union in the framework of the EU4Energy Initiative and with the support of the International Renaissance Foundation. The contents of this publication are the sole responsibility of NGO “DIXI GROUP”, as well as Civil Network “OPORA”, All-Ukrainian NGO “Energy Association of Ukraine”, Resource & Analysis Center “Society and Environment”, Association “European-Ukrainian Energy Agency”, and can under no circumstances be regarded as reflecting the position of the European Union and/or the International Renaissance Foundation. The EU4Energy Initiative covers all EU support to improve energy supply, security and connectivity, as well as to promote energy efficiency and the use of renewables in the Eastern Partner countries Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. It does this by financing projects and programmes that help to reform energy markets and to reduce national energy dependence and consumption. Over the longer term, this makes energy supply more reliable, transparent and affordable, thus reducing energy poverty and energy bills for both citizens and the private sector. More information on: www.EU4Energy.eu
The project “Enhancing impact of civil society in monitoring and policy dialogue on energy and related sectors’ reforms in line with the Association Agreement implementation” aims at strengthening the role of civil society in advocating reforms in the energy and related sectors. The key objectives of the project are: • monitoring of the implementation of the energy provisions of the Association Agreement, including relevant environmental and trade-related commitments; • strengthening the civic experts’ and local actors’ capacity to track actual implementation of the reforms; • facilitation of public dialog to lead in proper implementation of the European energy and environmental reforms; • informing stakeholders and the Ukrainian society about the meaning and potential benefits of European reforms in energy and related sectors in order to empower them to keep the government accountable for pursuing these reforms. The Project is supported by the European Union within the framework of EU4Energy initiative and cofunded by the International Renaissance Foundation
www.enref.org
Executive Summary
The Gas sector experts point out submitting the draft Law on Transparency in Extractive Industries (No. 6229) to the Verkhovna Rada for repeated second reading and registration of two parliamentary initiatives aimed at establishing the basic principles of energy security policy and the organizational mechanisms for its implementation at the legislative level. In addition, the Cabinet of Ministers has resorted to a trial implementation of the procedure for electronic auctions for the sale of permits for oil and gas exploration. While the government approved the action plan for the preparation to the 2018/2019 heating season and again postponed the decision to change the price of gas for households. Experts of the Electricity and Nuclear Safety Task Force note the registration of the draft Law on Amendments to the Tax Code of Ukraine and other laws of Ukraine to reduce the cost of electricity (reg. No. 8626), which propose to reduce the excise tax on electricity and establish a procedure for calculating the wholesale price for electricity, which reduces the fuel component for coal and changes the NEURC methodology. As well as the registration of draft laws regulating energy security (reg. No. 8609) and the mechanism for returning CHPs and TPPs to state ownership (reg. No. 8572). The Energy Efficiency and Social Issues Task Force has noted the CMU resolution on the regulation of monitoring of the installation of heat meters, which is of fundamental importance for the achievement of comprehensive heat energy metering. The adoption of the draft Framework Technical Regulation on Requirements for Eco-Design for Energy Products, which will regulate the process of approving the relevant regulations, as well as to allow the faster adoption of the last unadopted regulations on ecodesign, is also important. The adoption of two procedures to implement the Law On Energy Efficiency of Buildings is also a success. In the conclusions of the Environment and Renewable Energy Sources Task Force, it is noted that the Committee on Environmental Policy of the Verkhovna Rada of Ukraine considered and proposed to adopt the draft Law on the State Environmental Policy Strategy for the period until 2030, registered with the Verkhovna Rada of Ukraine. At the same time, the preparation and publication of the necessary acts for the commencement of the strategic environmental assessment procedure has started in accordance with the recently adopted law. Experts from the Oil and Oil Products sector are paying attention to the publication of the Action Plan for the Implementation of the First Stage of the Energy Strategy of Ukraine. It is also important that the Cabinet of Ministers announced the approval of the “Roadmap for international oil and gas auctions”. In the Business Climate sector, experts noted the intensification of the preparation of the introduction of the Single Treasury Account for payment of customs duties, and the registration of the draft law on the replacement of the corporate income tax by the tax on withdrawn capital. They also stressed the government’s initiative on switching the issuance of licenses for subsoil use to the online mode, which will significantly simplify the entry of foreign investors into the Ukrainian extractive market. CHP – combined heat and power plant CMU – Cabinet of Ministers of Ukraine IAEA – International Atomic Energy Agency IFI – international financial institutions NACP – National Agency on Corruption Prevention NEURC – National Energy and Public Utilities Regulatory Commission NNEGC – National Nuclear Energy Generating Company NPP – Nuclear Power Plant
RW – radioactive waste UES – United Energy System SAEZM – State Agency of Ukraine on Exclusion Zone Management SE – state enterprise SSIR – spent sources of ionizing radiation SU – separate unit TPP – thermal power plant WEM – wholesale electricity market
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During July, the draft law on transparency in the extractive industries (No. 6229) was submitted to the Verkhovna Rada and two parliamentary initiatives aimed at establishing the basic principles of energy security policy, as well as organizational mechanisms for its implementation at the legislative level were registered. In order to ensure greater openness of the domestic gas production sector, the Cabinet of Ministers has resorted to a trial implementation of the procedure for electronic auctions for the sale of permits for use of oil and gas fields. In addition, the government approved the action plan for the preparation to the heating season of 2018/2019 and again postponed the decision to change the price of gas for households, this time - by September 1, 2018. Against the backdrop of the government's support of Naftogaz current activities, expressed in the adoption of the two orders, no noticeable progress has been made in its reform. The regulator conducted an inspection of licensing activities of JSC Ukrtransgaz, which established a violation of the requirements of the law, in terms of ensuring the transition to a daily market balancing. Due to the unpreparedness of TSO to such a transition, the NEURC decided to postpone the introduction of this procedure for another 2 months. In parallel, the commission adopted for the further discussion the draft amendments to the GTS Code, which harmonize some of the differences in the positions of the Regulator and TSO regarding daily balancing. In addition, the NEURC approved amendments to the GDS Code, a model agreement for the distribution of natural gas, as well as tenyear plan for the development of the gas storage facilities of Ukrtransgaz. A meeting of representatives of Ukraine, Russia and the EU on the transit of Russian gas via the Ukrainian GTS after 2019 in Berlin ended with the readiness of the parties to form an expert group, which will start developing a framework concept of the future agreement in September. Directive 2009/73/EC concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC (Art. 338, 341, Annex XXVII of the AA) in accordance with Art. 278 of the AA At the Verkhovna Rada session on July 3, MPs adopted the decision (Resolution No. 6229/П 1) to return the draft law on transparency in the extractive industries to the relevant committee of the Verkhovna Rada on FEC for finalization. It is provided for to file it for repeated second reading after making corrections. During the first week of July session, MPs also registered the draft resolution of the Verkhovna Rada (No. 8567 2) on the appeal of the Verkhovna Rada to the Cabinet of Ministers with the requirement to take urgent measures to reduce prices and tariffs for housing and communal services for the population (including gas) - to the level of the beginning of 2014. In addition, in July, the Verkhovna Rada registered a separate draft law on the principles of state policy in the field of energy security (No. 8609 3). Among other things, the draft law defines the terms, such as “energy security”, “threat to energy security”, “energy diplomacy”, which were absent in the legislation of Ukraine up to this time, assesses threat and risk management in this area, and provides for the creation of an institution of an energy safety commissioner. Among the priorities of the state policy on energy security, the reliable functioning of the gas transportation system and the creation of strategic reserves of fuel and energy resources in accordance with EU legislation was noted.
http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?id=&pf3511=64408 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?id=&pf3511=64369 3 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?id=&pf3511=64445 1 2
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At the same time, MPs registered proposals for amending certain laws aimed at strengthening the energy independence of the country (draft Law No. 8631 4). In particular, it is proposed to supplement Article 7 of the Law On the Principles of Internal and External Policies, with regard to the basis of policy in the economic area, by the following clauses: achievement of a high level of energy security, increasing own energy production, and counteraction to the implementation of Nord Stream 2 Pipeline and other gas pipelines to deliver gas from Russia to EU countries bypassing Ukraine. The Government, the task of which, in the opinion of Prime Minister V. Groysman5, is to provide Ukrainian and world business with transparent conditions in the gas production sector in order to be able to refuse its import, and due to this, ultimately lower gas prices, has made its contribution to the support of energy independence. The Cabinet of Ministers has adopted several decisions aimed at increasing domestic gas production: it has experimentally introduced a mechanism for the sale of permit for subsoil use at electronic auctions 6 and approved the Roadmap for Conducting International Oil and Gas Auctions 7. The first decision is aimed at testing the open online bidding procedure for subsoil areas 8, the use of which will result in the transparency and possibility of equal competition for obtaining special permits for use of oil and gas subsoil 9. It is expected that the pilot auction will be held in January-February 2019. The second decision is intended to accelerate the holding of auctions with the involvement of experienced foreign partners, which will bring advanced technologies to Ukraine and can provide progress in increasing the volume of own gas production 10. Within the framework of preparation for the implementation of the above-mentioned governmental decisions, the State Service of Geology and Mineral Resources has already allocated 44 plots that need investments for the development, with reserves of natural gas of about 150 bcm 11. Until now, the problem of raising the price of natural gas for the population is not resolved by the Government - negotiations with the IMF go on 12. At the same time, the Ukrainian Diaspora urged the IMF not to insist on rising gas prices for domestic consumers of Ukraine: the official letter on this was sent to the Managing Director of the Fund C. Lagarde by the President of the Ukrainian World Congress E. Czolij on July 17 13. If the IMF decides to refuse to cooperate with Kyiv, it “will jeopardize the rather vulnerable socio-economic situation in Ukraine, will negatively affect the reform program and create economic uncertainty,� the letter emphasized. In order to keep the mentioned price unchanged until
http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?id=&pf3511=64480 https://www.kmu.gov.ua/ua/news/kabmin-zaprovadzhuye-proceduri-elektronnih-torgiv-na-licenziyi-na-koristuvannyanadrami-premyer-ministr 6 Ibid. 7 https://www.kmu.gov.ua/ua/news/volodimir-kistion-uryad-vidkrivaye-shlyah-dlya-prihodu-v-ukrayinu-novitnih-svitovihtehnologij-gazovidobutku 8 The procedure was adopted for the period from 01.09.2018 through 01.09.2018, the temporary procedure of electronic auctions of licenses for this period was published by media (https://www.rbc.ua/rus/news/kabmin-vvodit-elektronnye-torgilitsenzii-1532596076.html) 9 The last auction of the State Service of Geology and Mineral Resources for the sale of new licenses to oil and gas plots took place on 20.12.2016. In July this year, the department extended 39 permits for the use of subsoil to JSC Ukrgazvydobuvannya for 20 years (http://www.geo.gov.ua/derzhgeonadra-prodovzhili-39-specdozvoliv-at-ukrgazvidobuvannya/) 10 According to the Chairman of the Board of NJSC Nadra Ukrayny Y.Klymovych, Ukraine has reserves in the amount of 452.8 bcm available for production (https://ukurier.gov.ua/uk/articles/finansova-zhilka-pidzhivit-gazonosnu/) 11 http://www.geo.gov.ua/kabmin-zatverdiv-proekt-vprovadzhennya-elektronnix-torgiv-z-prodazhu-specdozvoliv-nakoristuvannya-nadrami/ 12 https://www.kmu.gov.ua/ua/news/uryad-zalishiv-nezminnoyu-cinu-na-gaz-dlya-naselennya-do-1-veresnya 13 http://ukrainianworldcongress.org/UserFiles/Image/Letters/Letter%20to%20Ms.%20Christine%20Lagarde%20IMF%20Manag ing%20Director.pdf 4 5
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September 1, 2018, the Cabinet of Ministers made corresponding adjustments to the Regulation on Public Service Obligations (PSO) to serve public interest in the natural gas market (Regulation No. 596 14). To resolve the conflict associated with the invalidation by the court decision 15 of the regulation No. 203 (as amended) 16, which regulates the existing “social” rates of natural gas consumption in the absence of meters, the Cabinet of Ministers proposed to increase these rates again. According to the draft CMU resolution on the introduction of the relevant amendments to the Resolution No. 203 published on the website of the Ministry of Energy and Coal Industry 17, it is provided for to establish the following standards: for households using only a gas stove, in the presence of central hot water supply - 5.8 cubic meters per person per month from April to September and 8.8 cubic meters - from October to March; for consumers using a gas stove, in the absence of central hot water supply - respectively, 8.3 and 13.7 cubic meters/person per month; finally, for consumers using a gas stove and a water heater - at the level of 20 and 25 cubic meters of gas per person per month. Meanwhile, in the absence of meetings of the Coordinating Council on Energy Reforms set up by the Government in July, the issue of approving the model of unbundling of Naftogaz has not been resolved. Instead, the Cabinet of Ministers approved two orders to support Naftogaz financial and economic activities. According to the first of these (No. 535-p) 18, the government approved the schedule for repayment by Naftogaz to the state budget of unallocated dividends in the amount of 45% of net income for 2017 (UAH 0.5 billion monthly in July-September plus UAH 8,099284 billion - no later than 30 November, and the same amount - no later than December 25, 2018). According to the second order (No. 536-p 19) - amendments to the loan agreement between Naftogaz and Ukrgazbank were agreed upon. Through the existing principle uncertainty with the model of the separation of the transportation function from Naftogaz and the contradiction between the applicants for the assets of TSO (among which Naftogaz itself, and Ukrtransgaz, and its subsidiary TSO of Ukraine (TSO), and PJSC Main Gas Pipelines of Ukraine (MGU) newly established by the Government may be named), the reliability of coverage in the public plane of the vicissitudes of the search for an optimal solution of unbundling causes some doubts 20. Thus, in July, the media reported 21 the filing of applications for dismissal by all of MGU top management, referring to the company’s funding exhaustion in August, which could testify to the indirect decision of the Cabinet of Ministers to refuse to support this project. However, this was officially denied by the press release of MGU 22, which states that the financing of the company is carried out timely and in full, according to the financial plan for 2018, MGU management works properly, and only the Technical Director I. Burak is dismissed. https://www.kmu.gov.ua/ua/npas/pro-vnesennya-zmin-do-postanovi-kabinetu-ministriv-ukrayini-vid-22-bereznya-2017-r-187-http://www.reyestr.court.gov.ua/Review/74545426 16 http://zakon5.rada.gov.ua/laws/show/203-2016-%D0%BF 17 http://mpe.kmu.gov.ua/minugol/control/uk/publish/article?art_id=245287918&cat_id=35082 18 https://www.kmu.gov.ua/ua/npas/pitannya-diyalnosti-publichnogo-akcionernogo-tovaristva-nacionalna-akcionernakompaniya-naftogaz-ukrayini 19 https://www.kmu.gov.ua/ua/npas/deyaki-pitannya-diyalnosti-publichnogo-akcionernogo-tovaristva-nacionalna-akcionernakompaniya-naftogaz-ukrayini20 It should be noted that, for example, the extracts from the official decision of the Stockholm Arbitration Court in terms of unbundling, referring to which Naftogaz grounded its own approach to this process for several months in a raw, were published by it only on 17.07.2018 http://www.naftogaz.com/www/3/nakweb.nsf/0/4FCFB4E7FB27A102C22582CD005A6339?OpenDocument&year=2018&mont h=07&nt=%D0%9D%D0%BE%D0%B2%D0%B8%D0%BD%D0%B8&) 21 https://www.epravda.com.ua/news/2018/07/20/638875/ 22 https://mg.org.ua/pat-%C2%ABmag%D1%96straln%D1%96-gazoprovodi-ukra%D1%97ni%C2%BB-sprostovu%D1%94%D1%96nformacz%D1%96yu-pro-zv%D1%96lnennya-menedzhmentu-kompan.html 14 15
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For its part, Naftogaz stated 23 that the following positions on the procedure of separation were agreed with the Government: a) MGU will not be a part of the Naftogaz group; b) “the separation should take place in full compliance with European norms and in the shortest possible time” c) Naftogaz carries out coordinated work with the Government on the development of TSO within JSC Ukrtransgaz. In the release of July 24, Naftogaz further reported 24 that it had reached an agreement with the supervisory board of MGU regarding the “road map of cooperation, for the purpose of a complete and transparent separation of the function of TSO in Ukraine”, and - according to the agreed memorandum of understanding – the unbundling process “should be completed in early 2020”. At the same time, according to the information of the source in MGU for the media 25, the Supervisory Board of PJSC MGU has not yet (as of July 26) agreed the memorandum of cooperation with Naftogaz in the process of allocating the function of TSO. It is reported that at the scheduled meeting of this council, a unanimous decision was made not to sign any documents with Naftogaz prior to consultations with the Government. The source summarized, “The principled position of the supervisory board of MGU is to be a full-fledged subject in the process unbundling. The proposals of Naftogaz are reduced to its leading role in this process.” At the end of July, Naftogaz intensified the process of dividing functions 26 by engaging the consulting company PricewaterhouseCoopers (PwC) for “supporting the transformation of JSC Ukrtransgaz”. A press release on this subject indicates that PwC consultants began developing three of the following areas: “1) Identification and preparation for the transfer of the gas assets of JSC Ukrtransgaz, which are not involved in the activities of transit of natural gas, to PJSC MGU. 2) Development of the plan for optimization and transfer of assets and functions to the branch of TSO JSC Ukrtransgaz and the plan for separating a branch of TSO into a separate legal entity within NJSC Naftogaz of Ukraine. 3) Implementation of the pilot project on optimization and transfer of certain functions to the branch of TSO.” The question of completing unbundling was also raised during Ukraine-EU Summit on July 9. As stated in the joint statement on its results, this is necessary for the integration of the Ukrainian energy market with the European one 27. At the same time, Naftogaz reported the largest profit in its history 28, which was received at the end of 2017. According to the results of the published financial report for 2017, the net profit of Naftogaz Group amounted to UAH 39.4 billion. According to the press release of Naftogaz, the main factor in the profitability of the Group in 2017 was the victory in arbitration proceedings against Gazprom: “Without
http://www.naftogaz.com/www/3/nakweb.nsf/0/D43748D4197D8005C22582D00056AB75?OpenDocument&year=2018&m onth=07&nt=%D0%9D%D0%BE%D0%B2%D0%B8%D0%BD%D0%B8& 24 http://www.naftogaz.com/www/3/nakweb.nsf/0/D3572CBE1AF16447C22582D40019EE59?OpenDocument&year=2018&mo nth=07&nt=%D0%9D%D0%BE%D0%B2%D0%B8%D0%BD%D0%B8& 25 https://interfax.com.ua/news/economic/521002.html 26 http://www.naftogaz.com/www/3/nakweb.nsf/0/874DA2D252DBF9EEC22582DB002A6186?OpenDocument&year=2018&m onth=07&nt=%D0%9D%D0%BE%D0%B2%D0%B8%D0%BD%D0%B8& 27 http://www.consilium.europa.eu/media/36086/joint-statement-eu-ua-summit-2018.pdf 28 http://www.naftogaz.com/www/3/nakweb.nsf/0/5C8F9DC1B2A4AE2FC22582CD003C005D?OpenDocument&year=2018&m onth=07&nt=%D0%9D%D0%BE%D0%B2%D0%B8%D0%BD%D0%B8& 23
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a positive effect of arbitration in the case of gas transit, the Group would incur a net loss of UAH 7.4 billion” 29. The Regulator has decided to amend the GDS Code and the model agreement for the distribution of natural gas (Resolution No. 691 30). The amendments concerning the first one related to the procedure for maintenance and repair of indoor gas networks, as well as the introduction of a new, modified version of the two chapters of the GDS Code: Chapter 4 “Gas Distribution System Security Zones” and Chapter 10 “Procedure for Examination of Measurement Equipment Tools and Seals”. The innovations to the contract relate to changes in the conditions for the payment of tariffs for distribution services, in various circumstances, in particular: in case of violation by a consumer of the terms of payment (terms of paying the fine), refusal to install the meter, change of the owner of the facility, etc. At the same time, the NEURC approved the plan for the development of gas storage facilities of JSC Ukrtransgaz for the period 2018-2027 (Resolution No. 808 31), which provides for a total amount of funding of UAH 13.06 billion, including UAH 1.0446 billion in 2018. The funds are allocated according to the items: construction and reconstruction of gas storage facilities, as well as technical re-equipment of booster compressor stations (BCS). Thus, the planned distribution of funding for storage facilities in 2018 is UAH 64.2 million (construction) and UAH 287.1 million (reconstruction), BCS - UAH 512.3 million (reconstruction) and UAH 77.1 million (re-equipment) 32. In addition to the above, the NEURC announced a competition for vacancy positions in the Regulator’s apparatus 33, in accordance with the procedure approved by the CMU Resolution No. 246. According to the new price proposals of Naftogaz for August 2018 34, gas prices for industrial and other consumers not covered by the Regulation on Public Service Obligations, compared to the prices for July (and June) in 2018, are increased by 1.7-1.8%. According to the new price list 35, the price of gas as a commodity (including VAT) was established from August 1, 2018 at the following levels: for monthly gas needs up to 50 tcm inclusive, non-regulated monthly needs and monthly requirements from 50 tcm without prepayment – UAH 11,083.2 per tcm; for monthly needs from 50 tcm, subject to preliminary payment 36 - UAH 10,130.4 per tcm (the same price level – UAH 10,130.4 per tcm - is established for subsidiaries founded by Naftogaz, 100% of the authorized capital of which is owned by the company).
Regulation (EC) No. 715/2009 on conditions for access to the natural gas transmission networks, replacing Regulation (EC) No. 1775/2005 (Art. 338, 341, Annex XXVII of the AA) according to Art. 278 of the AA, trade issues (Art. 269-274 of the AA) Taking into account the Regulator’s principled position regarding the necessity of introduction of daily balancing from August 1 (as stipulated by the resolution No. 1437 37), and the fact of delaying the process by Ukrtransgaz, the NEURC appointed an unscheduled inspection of TSO. A number of violations detected during the inspection process have been assessed by the Regulator as such that have led to a disruption of the market preparation to timely switching to work in the specified mode. For this, Ibid. http://www.nerc.gov.ua/?id=33204 31 http://www.nerc.gov.ua/?id=33670 32 http://www.nerc.gov.ua/?news=7785 33 http://www.nerc.gov.ua/?news=7690 34 http://www.naftogaz.com/www/3/nakweb.nsf/0/C98C47A12FAB2403C22582D0004CA8EB?OpenDocument&year=2018&mo nth=07&nt=%D0%9D%D0%BE%D0%B2%D0%B8%D0%BD%D0%B8& 35 http://www.naftogaz.com/files/Information/Naftogaz-gas-prices-ne-PSO-August-2018.pdf 36 Payment during the calendar month preceding the month of gas supply 37 http://www.nerc.gov.ua/?id=30366 29 30
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Ukrtransgaz was fined UAH 850 thousand (Resolution No. 788 38), the company itself was obliged to eliminate the violation before the beginning of the new gas year (October 1), creating and ensuring the functioning of the relevant information platform. The necessity to comply with the current rules of commercial balancing by October 1 under the current wording of the GTS Code was approved by the same NEURC resolution as the fine of Ukrtrasgaz. The NEURC stressed that the Regulator will continue to make every effort to switch to daily balancing. This switching should regulate the access to such an asset as technological natural gas, and the daily exchange of balance data - to be able to respond promptly to the need to sell or buy its required volumes. Meanwhile, in the event of refusal of the customer of transportation services to cover a daily unbalance, TSO must be able to stop the transportation of gas to the violator or make such a request to block the delivery to DSO. Previously, Ukrtransgaz advocated the introduction of daily balancing, precisely in order to guarantee a reduction in volumes of unauthorized gas withdrawals. On July 20, Ukrtransgaz made a statement 39 on the critical amount of accumulation of debt to it (as of June 30, this year - UAH 24.7 billion) through the unauthorized gas withdrawal. On August 1, the draft GTS Code updated by the NEURC with the amendments proposed by the commission was published on the Regulator’s website 40 for public discussion. It is reported that the amendments concern the improvement of the provision by transportation services customers of the financial support to TSO, the specification of the concept “trade notifications”, a more effective mechanism for terminating or restricting the transportation of gas to unscrupulous players in the market. Judging by the reaction of Ukrtransgaz 41, which assessed the amendments as positive, its comments, at least partially, were taken into account. According to TSO, unauthorized withdrawal and payment for neutrality are among the unresolved issues. Naftogaz also developed and submitted to the NEURC the proposals 42 for amending the methodology for calculating tariffs for the transportation of natural gas, the introduction of which could lead to a reduction in the cost of transit of gas through the territory of Ukraine by 2.3 times, starting from 2019. The main objective of the proposed amendments announced by Naftogaz is to bring the provisions of the current methodology in full compliance with the provisions of the European Commission Regulation No. 2017/460 adopted in the spring of 2017. Ukrainian and Polish TSOs completed the procedure for assessing non-binding demand for capacities at the Ukrainian-Polish border 43. Due to the procedure, the gas market participants were able to submit their applications for capacities in both directions of transportation. The assessment showed the following results: about 3.9 bcm per year in Poland-Ukraine direction and about 1.6 bcm in the opposite direction. Now JSC Ukrtransgaz and GAZ-SYSTEM S. A. have an opportunity to analyze the results obtained in order to reasonably determine the scope of the necessary expansion of cross-border capacities.
http://www.nerc.gov.ua/?id=33565 http://utg.ua/utg/media/news/2018/07/nakopycheni-borgy-operatoriv-grm-pered-ukrtransgazom-pidryvayut-energetichnubezpeku-ukrany.html 40 http://www.nerc.gov.ua/?id=33633 41 http://utg.ua/utg/media/news/2018/07/ukrtransgaz-pozitivno-ocznyu-rshennya-nkrekp-pro-zmni-deyakix-polozhenkodeksu-gts-vdpovdno-do-vropejskix-norm.html 42 http://www.naftogaz.com/www/3/nakweb.nsf/0/3D3CA9437F133C60C22582CC00462B15?OpenDocument&year=2018&mo nth=07&nt=%D0%9D%D0%BE%D0%B2%D0%B8%D0%BD%D0%B8& 43 http://utg.ua/utg/media/news/2018/07/ukrtransgaz-ta-gaz-system-uspishno-provely-proceduru-nezobovyazuyucho-ocznkipopitu-pislya-2019.html 38 39
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Directive 2004/67/EC concerning measures to safeguard security of gas supply (Art. 338, 341, Annex XXVII of the AA), action of “Early Warning Mechanism” (Annex XXVI of the AA), actions in emergencies (Art. 275-276, 309, 314 of the AA) The Government approved the plan for the preparation to the autumn-winter period of 2018/2019 and its passage (order No. 536-p 44) and obliged the Ministry of Energy and Coal Industry to report on the status of the implementation of the measures provided for by the plan before the 5th of each month. Ukrtransgaz continued to pump gas into the gas storage facilities. According to the company’s operational data 45, after the end of the autumn-winter period of 2017/18 (from April 8 to August 4, 2018), gas reserves in UGS were replenished by 5.6 bcm (from 7.44 bcm to 13.5 bcm). Consequently, compared with the end of the last heating season, the volume of gas in Ukrtransgaz UGS increased by 75.5%. The Cabinet of Ministers expects that reserves in gas storage facilities on November 1, 2018 will amount to 17 bcm. In the first round of tripartite consultations on the terms of transporting the RF gas through Ukraine to the EU countries from January 1, 2020, which took place in Berlin on July 1746, was attended by the Minister of Economy of the Federal Republic of Germany P. Altmaier, whose interest is clearly determined by the interests of Germany in the context of the implementation of Nord Stream 2. Meanwhile, judging from the official reports, no decisions were made: the parties voiced positions and agreed on the preparatory work of experts and the next meeting in the fall, also with the involvement of a representative of the European Commission47. Ukraine and Russia have previously agreed on a new format for a future agreement that will comply with the European legislation, while the representative of the RF – Minister of Energy A. Novak - has unveiled the requirements for the conclusion of a new transit contract with Russia: amicable adjustment and the settlement of the problem of Gazprom’s debt to Naftogaz by the decision of Stockholm Arbitration 48. In addition, A. Novak also voiced the proposal to postpone the approval of the agreements until obtaining the decision on Gazprom's appeal (i.e. 1.5 years). It is symbolic that on the day of this trilateral meeting, Nord Stream 1 gas pipeline stopped for the planned preventive maintenance (by the end of July) 49. At the same time, its stop has clearly demonstrated the importance of Ukrainian transit: according to the Slovak gas transport operator Eustream 50, at the moment of the stoppage, the nomination for gas pumping through the Uzhgorod transit corridor has increased from 168 mcm to 189 mcm. According to Ukrtransgaz 51, during the two-week preventive work on Nord Stream 1 gas pipeline, the average daily gas transit volumes from the RF to Europe by gas pipelines of Ukraine increased by 20%. According to the results of July 2018, compared to July 2017, transit volumes increased by 13% and reached 950 mcm52. Thus, being quite powerful and the shortest, the Ukrainian route does not require any service and repair stops, confirming the status of the optimal route for the transportation of Russian gas to European consumers. At the same time, Ukrtransgaz operational data summarizing the results of JanuaryJuly 201853 indicate that the volume of gas transit, compared to the same period in 2017, decreased by 2.25 bcm (or 4.2%) - to 50.95 bcm. https://www.kmu.gov.ua/ua/npas/pro-zatverdzhennya-planu-zahodiv-z-pidgotovki-obyektiv-palivno-energetichnogokompleksu-ukrayini-do-osinno-zimovogo-periodu-201819-roku-ta-jogo-prohodzhennya 45 http://utg.ua/live 46 https://www.eurointegration.com.ua/news/2018/07/17/7084524/ 47 https://www.eurointegration.com.ua/news/2018/07/17/7084514/ 48 https://interfax.com.ua/news/economic/518918.html 49 http://biz.liga.net/ekonomika/tek/novosti/severnyy-potok-ostanovitsya-na-vremya-gazovyh-peregovorov 50 https://tis.eustream.sk/TisWeb/#/?nav=gi.acs 51 https://www.facebook.com/utg.ua/posts/786692354788016 52 https://www.facebook.com/utg.ua/posts/786692354788016 53 http://utg.ua/live 44
Gas
In July, Naftogaz said that it filed a new suit with the Stockholm Arbitration, requiring a revision of the tariff for transit under the contract with Gazprom 54. This requirement was dismissed by the decision of the arbitration of February 28, 2018, so Naftogaz initiated a new process of revision of the tariff in March due to significant changes in the European gas market. The preliminary assessment of the monetary claims of Naftogaz is USD 11.58 billion (excluding interest). Regarding Nord Stream 2, on the one hand, the Constitutional Court of Germany refused to consider claims to members of NABU environment association of FRG 55 that sought to prevent the laying of pipes under the Baltic Sea because of the environmental damage. On the other hand, experts from the German Institute for Economic Research (Deutsches Institut fĂźr Wirtschaftsforschung) have published a solid report 56, in which they prove that Nord Stream 2 is not needed to ensure German and European energy security. However, as the main events of July related to the implementation of this gas pipeline, one can mention the preparation by the Chairman of the Senate Committee on Environment and Public Works Senate J. Barrasso of the draft Law On the Cessation of Russian Energy Aggression 57, which provides for sanctions against the Nord Stream 2 and the creation of conditions for the delivery of American LNG 58 to Europe, and the first works for laying pipelines in the Greifswald Gulf near Lubmin (Germany), on the implementation of which Nord Stream 2, the operator of Nord Stream 2, reported 59. Meanwhile, in addressing EU institutions ahead of Ukraine-EU summit (Resolution No. 2490-VIII 60), the Verkhovna Rada urged to confirm the strategic role of Ukraine as a transit state and take measures to prevent the construction of Nord Stream 2.
http://www.naftogaz.com/www/3/nakweb.nsf/0/713B012BCE83C6A9C22582C20050AF41?OpenDocument&year=2018&mo nth=07&nt=%D0%9D%D0%BE%D0%B2%D0%B8%D0%BD%D0%B8& 55 https://p.dw.com/p/31jNm 56 https://www.diw.de/sixcms/detail.php?id=diw_01.c.593668.en 57 http://thehill.com/policy/energy-environment/397644-republican-bill-would-impose-sanctions-on-russian-pipeline-for-nato 58 According to the authors of the draft law, the proposed sanctions against the gas pipeline will enable NATO member states to avoid coercion and political manipulation by Russia. The presentation took place after the NATO summit, at which US President D.Trump put Nord Stream 2 at the heart of his demands for NATO countries to execute the budget (https://global.handelsblatt.com/opinion/nord-stream-2-pipeline-trump-nato-defense-945998). 59 https://www.nord-stream2.com/ru/dlia-pressy/novosti-i-meropriiatiia/sudno-castoro-10-pristupilo-k-podgotovitelnymrabotam-103/ 60 http://zakon2.rada.gov.ua/laws/show/2490-19 54
Electricity and Nuclear Safety
A group of MPs registered the draft law amending the Tax Code of Ukraine and other laws of Ukraine on reduction of prices for electricity (reg. No. 8626), which propose to reduce the excise tax on electricity and establish a procedure for calculating the wholesale price for electricity, which reduces the fuel component for coal and changes in the NEURC methodologies. The draft laws that regulate energy security (reg. No. 8609) and propose a mechanism for returning CHPs and TPPs to state ownership (reg. No. 8572) were also registered. The NEURC has published the Draft Procedure for the Establishment (Formation) of Tariffs for Electricity Distribution Services, which proposed to switch to the RAB regulation. On July 12, 2018, the Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety held a Committee hearing on the subject of Nuclear Energy of Ukraine - Challenges and Prospects, where the following issues were discussed: extending the operating lifetime of active power units of NPPs, improvement of the efficiency of using the capacity of nuclear power plants, the completion of the construction of a centralized storage facility for spent nuclear fuel, the expansion of capabilities of import and export of electricity, managing spent nuclear fuels, the lack of funds in the NPP decommissioning fund, the radioactive waste management fund, the issue of financial support for the functioning of the branch and new construction, taking into account the wage and its level in the tariff, etc. Directive 2009/72/EC of 13 July 2009 on common rules for the internal market in electricity and repealing Directive 2003/54/EC (Art. 269, Chapter 11, Section IV of the EU-Ukraine Association Agreement) On July 6, a group of MPs (faction independent Yu. Levchenko, A.Illienko and others) submitted the draft Law on Amendments to Certain Legislative Acts (on Ensuring Ukraine’s Energy Security), which propose to amend the Law of Ukraine On the Electricity Market in relation to the possibilities of the Verkhovna Rada of Ukraine to decide on the return of privatized electricity facilities by including them in the list of facilities that are strategic facilities of the electric power industry in the event of a threat to the national energy security of Ukraine (reg. No. 8572) 61. It is also proposed to supplement the Law of Ukraine On the List of Property Covered by the Right of State Ownership not Subject to Privatization with the list of facilities that are strategic objects of the electric power industry. TPPs and CHPs are proposed to be included in the list of such facilities, 34 facilities in total. On July 13, a group of MPs from different factions (N. Katser-Buchkovska, V. Voitsitska, P. Pinzenyk,etc.) submitted the draft Law on the Principles of State Policy in the Field of Energy Security of Ukraine (reg. 8860) 62. The draft law provides for the introduction of a system for assessing actual and potential threats to energy security, monitoring its state, and measures to respond to threats. It also proposes the creation of an institution of the Commissioner for Energy Security and defines his powers. On July 13, a group of MPs (V. Voitsitska, A. Levus, M. Bondar, N. Katser-Buchkovska, etc.) submitted the draft Law on Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Reduction of Prices for Electric Energy (reg. No. 8626) 63. In the part of the electricity market, the draft law proposes to reduce the excise tax rate for electric energy from 3.2% to 0.1%; to determine the formula for calculating the fair price for coal (Article 17 of the Law of Ukraine On Electricity is proposed to be supplemented by the formula for calculating the wholesale market price), which is used by thermal power plants for the production of electricity. It is also proposed to enter to the Law On Electricity the http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?id=&pf3511=64377 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?id=&pf3511=64445 63 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?id=&pf3511=64472 61 62
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provision that if the NEURC does not set the wholesale price of the purchase of electric energy supplied in WEM from other countries, this price will be equal to the forecast wholesale market price valid during the relevant period, but does not exceed the weighted average tariff for energy generating companies of thermal power plants. In case of adoption of this draft law, a political wholesale price formula, which is aimed at reducing the price of coal, which is currently calculated according to the formula established by the NEURC (so-called “Rotterdam+�), will be established . On July 27, the NEURC published generalized comments and proposals for the draft resolution of the NEURC concerning amendments to the Procedure for Approval, Adjustment and Removal of the Investment Component in the Tariff for Electricity. Comments by market participants concerned the timing and procedure for discussing investment programs, but none of the comments was accepted by the Regulator. Discussion of the draft resolution of the NEURC On Approval of the Amendments to the Resolution of the National Energy and Public Utilities Regulatory Commission of February 23, 2017 No. 224 will be held in August 2018 64.
Regulation 714/2009/EC of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity repealing Regulation 1228/2003 (Art. 270, Chapter 11, Section IV of the EUUkraine Association Agreement) On 11-12 July in Chisinau, representatives of SE NPC Ukrenergo held a working meeting with SE Moldelectrica within the framework of the project of synchronization with ENTSO-E, at which the procedure for determining parameters of regulation of frequency and power exchange in the control unit of Ukraine and the Republic of Moldova was signed. The basic principles of the formation of intercontrol areas of SE NPC Ukrenergo and SE Moldelectrica and the procedure for compensating for unpredictable deviations in the General Control Unit were discussed and agreed upon 65. On July 24, the NEURC published generalized comments to the draft NEURC resolution On Approval of the Methodology for Determining Available Transmission Capacity of Interstate Crossings (Interstate Power Grids of Ukraine)". Comments and proposals to the Methodology were provided by both the Energy Community Secretariat and the electricity market participants. The public discussion is scheduled to be held in August 2018 66.
Directive 2009/72/EC of 13 July 2009 on common rules for the internal market in electricity and repealing Directive 2003/54/EC (Art. 273, Chapter 11, Section IV of the EU-Ukraine Association Agreement) Balancing market Hungarian company IP Systems Zrt. in a consortium with Austrian Smart Technologies ManagementBeratungs und Beteiligungs gmbH and Siemens AG Austria became winners of a tender for supplying software for the balancing electricity market and ancillary services market with an integrated solution for the payment system within the framework of the introduction of a new electricity market. On July 19, SE NPC Ukrenergo, as the System Operator of the New Electricity Market, has concluded a contract with them for a total of USD 8 million, which provides for the supply and technical support of software
http://www.nerc.gov.ua/index.php?news=7736 https://ua.energy/osnovni-podiyi/ukrenergo-ta-moldelectrica-spivpratsya-na-shlyahu-entso-e-tryvaye/ 66 http://www.nerc.gov.ua/index.php?news=7735 64 65
Electricity and Nuclear Safety
for five years. The project is funded within the framework of cooperation between SE NPC Ukrenergo and the World Bank 67. Tariffs for transmission of electric energy by main and interstate electric systems and distribution of electricity. SE NPC Ukrenergo published the draft tariff for the transmission of electricity by bulk and interstate electric systems, including payment for the central dispatch control of the UES of Ukraine in 2019 and the corresponding project of the investment program. Compared to the tariff for 2018, which is 4.894 kopiikas per kWh. In 2019, it is planned to increase it to 0.17034 UAH per kWh, i.e. 248.0%. The system operator explains this increase by the fact that from the second half of 2019 the structure of the tariff should include the cost of purchasing electricity in order to compensate for the technological costs of electric energy on its transmission by electric systems and ancillary services to ensure the stable and reliable operation of the unified energy system of Ukraine and the quality of electricity in accordance with the Law of Ukraine On the Electricity Market. Open hearings are scheduled for August 10 68. On July 20, the draft Resolution On Approval of the Procedure for the Establishment (Formation) of Tariffs for Electricity Distribution Services was published by the NEURC. The document regulates the procedure of the licensee and the execution of the necessary documents, and determines the procedure for the establishment and detailed mechanism for calculating the tariff for electricity distribution services, taking into account switching to stimulating regulation. The tariff review application is submitted once a year until September 15 of the year preceding the year, for which the tariffs will be set, and the adjustment application - until April 1 of the year, in which the tariff adjustments will be made 69. The NEURC believes that the project partly takes into account the comments and suggestions contained in the Energy Community Report “Assessment of the set of regulations and methodologies for network tariff setting in Ukraine”. The procedure provides for that the tariff calculation is carried out in accordance with the structure of the tariff established by the NEURC. The basis for the formation of the tariff for the relevant forecast year is the calculation of the forecast income, which includes reasonable expenses of the applicant and the estimated profit, the amount of which is sufficient to ensure electricity distribution activities, and the implementation of investment programs. Licensing electricity supply to consumers On July 24, the NEURC published the draft NEURC Resolution On the Invalidation of the Resolution of the National Energy and Public Utilities Regulatory Commission of April 13, 2017 No. 504. The resolution concerns the recognition of the Licensing Conditions for Conducting Economic Activities for the Supply of Electricity approved by the NEURC resolution of April 13, 2017 No. 504, which expired from the date of commencement of the new electricity market 70.
Art. 338, Chapter 1, Section V of the EU-Ukraine Association Agreement The CMU Order of June 6, 2018, No. 497-p On the Approval of the Action Plan for the Implementation of the Stage “Energy Sector Reform (2020)” of the Energy Strategy of Ukraine until 2035 “Safety, Energy
https://ua.energy/media/pres-tsentr/pres-relizy/ukrenergo-pidpysano-kontrakt-na-postachannya-programnogozabezpechennya-dlya-balansuyuchogo-rynku-elektroenergiyi/ 68 http://kievprofenergo.in.ua/post/1315/ 69 http://www.nerc.gov.ua/index.php?news=7728 70 http://www.nerc.gov.ua/index.php?news=7734 67
Electricity and Nuclear Safety
Efficiency, Competitiveness� was made public 71. A significant part of the Plan is the measures to reform the electricity market and its implementation in the terms provided for by the Law of Ukraine On the Electricity Market.
Art. 338, Chapter 1, Section V of the EU-Ukraine Association Agreement. Cooperation agreements with the IFI On July 18, the Board of Directors of the European Bank for Reconstruction and Development approved a new program of EUR 250 million to support private renewable energy projects in Ukraine. The objective of the program is to help Ukraine achieve 11% of consumption of electricity from renewable energy sources by 2020, as provided for by the National Renewable Energy Action Plan. The new program will replace the current USELF program, expiring on June 30, 2018.
Art. 399, Chapter 1, Section V of the Association Agreement Ukraine-EU, Coal Market On July 4, the Budget Committee considered the draft law No. 8362 of the MP Mykhailo Bondar, which provides for amending the budget for 2018 and allocating UAH 2.8 billion to finance the state coal industry. The Budget Committee has decided not to support the draft law No. 8362, referring to the fact that the Ministry of Finance of Ukraine does not support the draft of this law. On July 5, a protest action of miners, the main requirements of which were the adoption of the draft Law No. 8362 On Amendments to the Law of Ukraine On the State Budget of Ukraine for 2018 regarding the allocation of UAH 2.8 billion in support of the coal industry and repayment of wage arrears, which amounted to UAH 1.1 million on state-owned coal-mining enterprises as of July 4, took place near the walls of the Verkhovna Rada 72. On July 5, the Ministry of Finance of Ukraine allocated UAH 324 million to pay off the miners’ wage arrears in May 73. On July 6, during the Question Hour in the Verkhovna Rada, the Prime Minister of Ukraine noted that the status of rights in the coal industry is unsatisfactory. Volodymyr Groysman noted that it is necessary to systematically deal with restructuring of mines, renewal and increase of extraction, since at present the state budget subsidizes the coal industry in the amount of UAH 3 billion. The cost of coal at state mines is higher than the sale price 74. On July 10-13, near the walls of the Verkhovna Rada, the miners demanded payment of wage arrears, approval of the draft Law No. 8362 On Amendments to the Law of Ukraine On the State Budget of Ukraine for 2018 regarding the proper financial provision of the state sector of the coal industry, which provides for the allocation of UAH 2.8 billion for the support of the coal industry. The miners also demanded to return of beds of ME Kotliarevska Mine and ME 1/3 Novohrodivska Mine of SE Selydivugillia to the public ownership 75.
https://www.kmu.gov.ua/ua/npas/pro-zatverdzhennya-planu-zahodiv-z-realizaciyi-etapu-reformuvannya-energetichnogosektoru-do-2020-roku-energetichnoyi-strategiyi-ukrayini-na-period-do-2035-roku-bezpeka-energoefektivnistkonkurentospromozhnist 72 http://www.kvpu.org.ua/uk/news/1/2904-hirnykyzriznykhrehionivprotestuvatymutukyievi 73 https://ua-energy.org/uk/posts/shakhtari-domohlysia-chastkovoho-pohashennia-zaborhovanosti 74 https://www.kmu.gov.ua/ua/news/glava-uryadu-napolyagaye-na-formuvanni-novoyi-politiki-u-vugilnij-galuzi-peredusim-vsegmenti-derzhavnih-shaht 75 http://www.kvpu.org.ua/uk/news/6/2925-shakhtari-znovu-pryishly-pid-verkhovnu-radu 71
Electricity and Nuclear Safety
On July 13, the Verkhovna Rada of Ukraine voted for the adoption of the draft law No. 8362 On Amendments to the Law of Ukraine On the State Budget of Ukraine for 2018 as to the proper financial provision of the state sector of the coal industry as a basis and in general. During the discussion procedure, amendments were made to the draft law on the amount of subsidies for the coal industry its size was reduced to UAH 1.4 billion 76.
Art. 342, Chapter 1, Section V of the EU-Ukraine Association Agreement, Cooperation in the Nuclear Field, Directive No. 96/29/Euratom, Council Directive No. 2006/117/Euratom, Council Directive No. 2003/122/Euratom On July 4, the Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety recommended the draft Law On Amendments to the Law of Ukraine On Permitting Activities in the Field of Nuclear Energy Utilization No. 8348 to be adopted at first reading 77. The purpose of the draft law is to optimize and improve the procedure for issuance of permits to carry out activities in the field of nuclear energy use, to bring them in line with the Laws of Ukraine On Administrative Services and On Standardization. The draft law provides for codifying at the legislative level: the procedure for issuing permits for the transportation of radioactive materials, certificates in case of transportation of these materials, separate permissions for certain types of works or operations; list and requirements for the documents necessary for obtaining permitting documents; payment for the issuance of permitting documents; the deadline for the issuance of permitting documents; a list of grounds for refusal to provide permitting documents 78. On July 4, JSC Turboatom and Japanese Toshiba Energy Systems & Solutions Corporation with the assistance of NNEGC Energoatom signed the Memorandum of Understanding on Nuclear Energy. The document was signed at the central office of Energoatom by the General Director of Turboatom Viktor Subotin and Mr. Goro Janase, Director, Vice President of Toshiba Energy Systems & Solutions Corporation. The companies agreed on the beginning of mutually beneficial cooperation in the implementation of projects for the modernization of turbine equipment of the machine rooms of the NPP 79. On July 5, implementing the rights of citizens and their associations to participate in the consideration of issues and the decision-making process related to the use of nuclear energy, based on the principles of openness and availability of information on the activities of Zaporizhzhya NPP, the Nikopol Town Council, together with ME Zaporizhzhya NPP of SE NNEGC Energoatom has started the process of organizing public discussions on consideration of materials for justification of safety of the extension of the operating time of the power unit No. 4 of ZNPP 80. On July 11-12, at Rivne NPP, a re-inspection of the State Nuclear Regulatory Inspectorate of Ukraine was held to verify the implementation of the measures specified in the Certificate of Complex Inspection of the Power Unit No. 3 concerning its readiness to carry out activities during long-term operation. According to the results of this inspection, Pavlo Pavlyshyn, General Director of RNPP, was presented with the Inspection Report, which summarizes the conclusions and comments of members of the http://w1.c1.rada.gov.ua/pls/radan_gs09/ns_el_h2?data=13072018&nom_s=8 http://kompek.rada.gov.ua/uploads/documents/30449.pdf 78 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=63982 79 http://www.energoatom.kiev.ua/ua/press/nngc/53989turboatom__toshiba_energy_systems__solutions_corporation_za_spriyannya_energoatoma_pdpisali_memorandum_pro_vza morozumnnya/ 80 http://www.energoatom.kiev.ua/ua/press/nngc/53991pro_provedennya_gromadskih_sluhan_z_rozglyadu_materalv_z_obruntuvannya_bezpeki_prodovjennya_termnu_ekspluatatc_ energobloka__zaes_u_m_nkopol/ 76 77
Electricity and Nuclear Safety
inspection commission. Taking into account the conclusions on the areas of the inspection, the Commission of the State Nuclear Regulatory Inspectorate noted that the documents submitted by the Rivne NPP for amending (reissuing) the license for the right to conduct activities at “operation” life cycle stage of the nuclear installation of the Power Unit No. 3 of RNPP regarding its readiness to perform activities during long-term operation are reliable and reflect the actual state of affairs 81. On July 12, 2018, the Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety held a Committee hearing on the subject of “Ukraine’s Power Industry - Challenges and Prospects”. During the round table, the following issues were discussed: extension of operating time of active NPP power units, improvement of the efficiency of utilization of capacity of nuclear power plants (as improvement of the nominal capacity of power units and increasing the rate of utilization of the installed capacity), completing the construction of a centralized spent nuclear fuel storage facility, expanding the possibilities for import and export of electricity, spent nuclear fuel management, lack of funds in the NPP decommissioning fund, radioactive waste management fund, issues of financial support for the functioning of the industry and new construction, consideration of wage and its level in the tariff, and many other issues 82. As a result, the Chairman of the Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety Dombrovskyi O.H. noted that the Committee is ready not only to provide a platform, but also to initiate debates and discussions on the above issues with the relevant state structures. In addition, the interest of the state authorities themselves, as well as market participants, in solving the corresponding problems of the energy complex is an important precondition for the beginning of the dialogue. On July 13, Oleksandr Dombrovskyi, the Chairman of the Verkhovna Rada Committee on FEC, and Energoatom President Yurii Nedashkovskyi presented the EU-Ukraine Energy Bridge project and the KhNPP completion project in the European Parliament. Ukraine has been implementing the program for full synchronization of energy systems with EU countries for a long time. “Ukraine - European Union” Energy Bridge project will be the first stage of this process”. “The essence of the project is that there is the 750 kV line between Poland and Ukraine. A cross-border line that has not been in operation for over 24 years. The operation of this line has been stopped, when Poland synchronized its system with the European Union, and Ukraine remained in the Russian system. The 750 kV line (Khmelnitskyi NPP Rzeszow) is an energy asset of value and strategic importance for the energy security of the Central European region,” Oleksandr Dombrowskyi said. He also said that this summer, the tender for the implementation of Ukraine – EU Energy Bridge project on the basis of public-private partnership will be announced 83. On July 16, at a meeting of the Collegium of the State Nuclear Regulatory Inspection of Ukraine, under the chairmanship of the head of the State Nuclear Regulatory Inspectorate Hryhorii Plachkov, it was unanimously decided to amend the license of RNPP-3 at “operation of a nuclear installation” life cycle stage until December 11, 2037 84. Art. 342, Chapter 1, Section V of the EU-Ukraine Association Agreement, Cooperation in the Nuclear Field. Cooperation is aimed at solving the problems that arose as a result of the Chernobyl disaster, as well as the decommissioning of the Chernobyl NPP http://www.energoatom.kiev.ua/ua/press/nngc/54020na_raes_vdbulas_povtorna_nspektcya_derjatomregulyuvannya_ukrani/ 82 http://kompek.rada.gov.ua/documents/sluhannja/73599.html 83 http://www.energoatom.kiev.ua/ua/press/nngc/54024glava_komtetu_vr_z_pitan_pek_oleksandr_dombrovskiyi_ta_prezident_energoatoma_yuryi_nedashkovskiyi_predstavili_v_vro parlament_energomst_ukrana__s_ta_proekt_dobudovi_haes/ 84 http://www.energoatom.kiev.ua/ua/press/nngc/54031kolegya_derjatomregulyuvannya_termn_ekspluatatc_energobloka__rvnensko_aes_prodovjeno_na__rokv/ 81
Electricity and Nuclear Safety
On July 11, with the support of the EU, the ecological project on increasing radiation safety around the Chernobyl zone was successfully completed. The final stage of Health and Environment around the Chernobyl Zone project was holding of a colloquium, during which the participants of the event learnt about its results 85. On July 12, 2018, EU experts and representatives of Ukrainian agencies held a press conference on the use of the RODOS decision support system to predict and minimize the consequences of potential radiological accidents in Ukraine. “The Experience of the implementation in Ukraine of RODOS European Decision Support System for Nuclear Emergency Management”. Over the last seven years, the system has been implemented at all four Ukrainian nuclear power plants and in the exclusion zone and has already been successfully used to assess the consequences of forest fires in the area of exclusion on June 5-6, 2018. The event is organized by the EU-funded Expansion of the RODOS Decision Support System in Ukraine for the Chernobyl Exclusion Zone” 86. In pursuance of Article 19 of the Law of Ukraine On Prevention of Corruption, with the aim of preventing, detecting, minimizing, eliminating the consequences of corruption and corruption-related offenses, SAEZM specialists carried out an assessment of corruption risks, according to the results of which the report was drawn up. Following an electronic consultation with the public, the AntiCorruption Program of the SAESM for 2018 was approved and put into effect by the Order of the Head of the SAESM No. 144 of 18.07.2018 87. Currently, the Program has been sent to the NACP for approval 88. On July 18, at the 12th meeting of the Donor Coordination Committee, the Chairman of the SAEZM and SAEZM specialists reported on the progress of the implementation of major projects in the sphere of SSIR management, funded by the international community. As a result of the meeting, representatives of donor countries expressed their support for the actions of the SC UkrDO Radon within the framework of the project implementation 89. On July 23, the SAEZM and IAEA management signed the Memorandum of Cooperation in the field of scientific and technical research during the next 3 years. The main areas of work under the new Memorandum will be research for the decommissioning of nuclear facilities, RW management and the restoration of the environment after radioactive contamination 90. On July 31, 2018, the press service of the SAEZM announced the holding of public discussions of the Anti-Corruption Program of the SAEZM in 2018, which will be held on August 10, 2018 91.
http://dazv.gov.ua/novini-ta-media/vsi-novyny/za-pidtrymky-yes-uspishno-zavershyvsia-ekolohichnyi-proekt-zpidvyshchennia-radiatsiinoi-bezpeky-navkolo-chornobylskoi-zony.html 86 http://dazv.gov.ua/novini-ta-media/vsi-novyny/12-lipnya-2018-roku-eksperti-es-ta-predstavniki-ukrajinskikh-vidomstvprovedut-pres-konferentsiyu-shchodo-vikoristannya-sistemi-pidtrimki-prijnyattya-rishen-rodos.html 87 http://dazv.gov.ua/diyalnist/antikoruptsijna-diyalnist/nakaz-dazv-ukrajini-vid-18-07-2018-144-pro-zatverdzhennyaantikoruptsijnoji-programi-dazv.html 88 http://dazv.gov.ua/novini-ta-media/vsi-novyny/u-dazv-z-yavilas-nova-antikoruptsijna-programa.html 89 http://dazv.gov.ua/novini-ta-media/vsi-novyny/na-koordinatsijnomu-komiteti-donoriv-dazv-prozvituvalo-pro-vikonannyaosnovnikh-proektiv-u-sferi-povodzhennya-z-vidpratsovanimi-dzherelami-ionizuyuchogo-viprominyuvannya.html 90 http://dazv.gov.ua/novini-ta-media/vsi-novyny/dazv-i-magate-pidpisali-memorandum-pro-spivpratsyu-u-sferi-naukovotekhnichnikh-doslidzhen.html 91 http://dazv.gov.ua/novini-ta-media/vsi-novyny/dazv-zaproshue-vzyati-uchast-u-gromadskikh-obgovorennyakhantikoruptsijnoji-programi.html 85
Energy Efficiency and Social Issues
July is characterized by a number of positive developments on the implementation of the Association Agreement in terms of energy efficiency. E.g., in the absence of news about the progress of the draft Law on Energy Efficiency by Government offices, during this month, the Cabinet of Ministers of Ukraine adopted the resolution that will regulate the monitoring of the installation of heat meters, which is of fundamental importance for the achievement of comprehensive heat energy metering. The draft framework Technical Regulation on requirements for eco-design for energy consuming products, which will regulate the process of approving the relevant regulations, and will allow adopting the last regulations on eco-design, was also adopted. There is also a success of the adoption of two procedures for the implementation of the Law On Energy Efficiency of Buildings. At the same time, there is a lack of speed in the launch of the Energy Efficiency Fund, the situation with the financing of the “warm loans” program remains steadily difficult, and further government’s subsidy policy remains highly unclear, which is directly dependent on the results of negotiations with the IMF on the abolition of the regime of special duties in the gas market, remains unclear. Directive 2012/27/EC on energy efficiency As of the end of July 2018, the implementation of the bureaucratic procedures by the draft Law of Ukraine On Energy Efficiency is in the process of approval by the central executive authorities. Thus, this status does not change since the date of sending the letter of 19.04.2018 No. 186-01/16/2-18, by which the agency sent the specified draft law for re-approval to the Ministry of Economic Development and Trade, was sent to the State Agency on Energy Efficiency and Energy Saving. Metering (Article 9) The implementation of the Law of Ukraine On Commercial Metering of Thermal Energy and Water Supply, despite the delay in its certain provisions, is carried out through the adoption of subordinate regulatory legal acts. In particular, during the Government’s meeting on July 26, the CMU Resolution On Approval of the Procedure for Monitoring the Condition of Equipment with Units of Commercial Metering and Information Sharing between the State Agency on Energy Efficiency and Energy Saving and the State Service for Food Safety and Consumer Protection in violation of the requirements of the legislation in part of conformity of measuring equipment of commercial metering units to technical regulations, terms of their installation or replacement” 92. The said act is developed in pursuance of Article 12 of the Law and determines the procedure for monitoring the state of such equipment, including the provision of information forms, the frequency of the provision of such information by regional and city state administrations to the State Agency on Energy Efficiency and Energy Saving. In particular, the adopted procedure provides for the obligation of state administrations to provide the information on the level of equipping buildings with commercial meters for heat and water to the State Agency on Energy Efficiency and Energy Saving under the established forms through placing them on the Agency’s website with explanations for their filling in. The submission of information should take place on a monthly basis in electronic and paper form until the 10th of the month, and if the company serves several settlements, then the relevant information is to be indicated separately. If the information on the equipment of buildings with meters differs from the previous data, local administrations are obliged to provide an explanation of the change in the number of equipped buildings within 5 working days from the day the relevant notice was received. In its turn, the Agency summarizes information from public administrations and publishes such information on its website every month until the 20th day. During the monitoring, the analysis of the compliance of the operators of external engineering networks with the requirements of the legislation regarding the compliance of meters with the technical regulations, as well as the terms for their installation and replacement. In case of detecting violations, the State Agency on Energy Efficiency and Energy Saving, within 5 days, sends copies of documents regarding violation of the requirements to the State Committee for Food Safety and Consumer 92
https://www.kmu.gov.ua/ua/npas/pro-zatverdzhennya-poryadku-zdijsnennya-monitoringu-stanu-osnashchenosti-
Energy Efficiency and Social Issues
Protection in the established form. In its turn, the State Committee for Food Safety and Consumer Protection should inform the Agency of the passed resolutions in cases of administrative offenses in the field of commercial metering of public utilities. Thus, the principal task of such monitoring will be collecting, summarizing and analyzing information on the state of the equipment of buildings with commercial metering units and identifying violations regarding the implementation of the Law. Energy Service Market (Article 18) The energy services market is actively developing with the active work of the State Agency on Energy Efficiency and Energy Saving and the support of international partners. In addition to conducting training events in the regions for representatives of local self-government authorities, in July, a meeting was held under the chairmanship of the head of the Agency with the participation of representatives of the Ministry of Regional Development and Trade, MPs, law firms and the UNDP project “Removing the barrier to attracting investments in energy efficiency improvement of public buildings in small and medium-sized towns of Ukraine on the basis of the ESCO model�, which was devoted to the issue of facilitating the implementation of ESCO-contracts in the budgetary sphere. Statistics show that since the introduction of the special module for ESCO-tenders in PROZORRO system from October 2017 to the present time, 421 auctions have been announced, and 147 contracts have already been concluded. However, the meeting participants pointed out that the practice of implementing the ESCO-mechanism testifies to the need to improve the legislation for resolving problem issues for the participants of the energy service market. Among the urgent issues is the untimely approval of the essential conditions by the relevant authorities, as well as the fact that the right to undertake long-term budget commitments for the energy service does not apply to recipients of budget funds, which restricts the areas of use of the ESCO-mechanism, attracting investment in ESCO-projects, and necessitates the introduction of additional mechanisms for leveling currency and inflationary risks. The deployment of the market is also slowed down by the lack of a special methodology for calculating the basic level of consumption of thermal energy, water (in particular hot water), electricity for buildings of budgetary institutions. In order to resolve these issues, it is necessary to amend the relevant law and the Budget Code of Ukraine 93. In addition, the Memorandum on Partnership for Energy Services Implementation was signed to improve the energy efficiency of facilities of the State Statistics Service, under which the Agency will provide the State Statistics Service with explanations on legislation on ESCO issues, as well as consultations on the procedures for concluding ESCO-contracts, calculation and approval of the basic level of energy consumption, preparation of tender documentation and draft contracts 94. The central executive authorities are actively involved in the legislative initiative of introducing energyefficient measures for the buildings of the budget sphere. In particular, the Ministry of Finance of Ukraine approved the first essential conditions of ESCO-contracts for facilities of the central executive authority, namely - 4 pumping stations of the State Agency of Water Resources 95: in the town of Berislav and the urban village of Novotroyitske, owned by the State Agency of Water Resources, will be modernized at the expense of private ESCO-investors. The amounts of contracts are from UAH 7.5 to 10 million 96. The Ministry of Education and Science of Ukraine also joined the implementation of ESCO-mechanisms in administrative buildings, in particular, the order was approved for the procurement of energy services for the implementation of energy-efficient measures at 19 facilities belonging to T. Shevchenko National
http://saee.gov.ua/uk/news/2453 http://saee.gov.ua/uk/news/2473 95 http://saee.gov.ua/uk/news/2470 96 http://saee.gov.ua/uk/news/2489 93 94
Energy Efficiency and Social Issues
University of Kyiv and Vinnytsia College of the National University of Food Technologies. These are several educational buildings, as well as hostels and other buildings 97. The memorandum of partnership in involving ESCO-investors in the implementation of energy-efficient projects at numerous facilities of the SES (State Emergency Service) was also signed between the State Agency on Energy Efficiency and Energy Saving and the SES. The SES is one of the first authorities that has taken the initiative to implement the energy service through private investment 98. Within the framework of the seminars held by the State Agency on Energy Efficiency and Energy Saving, together with the Representative Office of F. Ebert Foundation, peculiarities of the implementation of the ESCO-mechanism were presented to the representatives of institutions and organizations subordinated to the Ministry of Defense. As a result of close cooperation, today the Ministry of Defense has summarized and published information on the energy consumption of 330 potential ESCO-facilities that may be of interest to investors on its website 99. The practical implementation of the ESCO-mechanism shows the success of such an initiative throughout the country. In particular, in the town of Bakhmut, the first energy service contracts, according to which energy efficiency measures will be implemented in two kindergartens No. 52 and No. 24, were signed in the Donetsk region. According to the State Agency on Energy Efficiency and Energy Saving, ESCO should carry out a number of energy-saving measures that will reduce heat consumption, and the customer should pay the cost of the work performed at the expense of achieved savings. Under the terms of the concluded contracts, about 25% of heat energy savings are expected 100. It should be noted that the representatives of the relevant Agency conduct a large-scale information campaign not only on the introduction of the ESCO-mechanism in the budgetary sphere, but also for the residential sector, in particular for multi-apartment houses, where multi-apartment building co-owners associations were created. In the State Agency on Energy Efficiency and Energy Saving with the support of the Regional Representative Office of Friedrich Ebert Foundation in Ukraine, regional seminars on the implementation of the energy service in the residential sector, which are held in the cities of Lutsk 101, Kharkiv 102, Cherkasy 103. National Energy Efficiency Fund, Financing and Technical Support (Article 20) During the Government’s meeting on July 11, the Prime Minister of Ukraine presented a report on the work of the Cabinet of Ministers of Ukraine, in particular emphasizing the need to implement measures for the implementation of the Energy Efficiency Fund and the work of the “warm loans” program 104. In addition, during the aforementioned meeting, a draft resolution on amending the Articles of Association of the Energy Efficiency Fund was submitted to the Government for consideration, but it was withdrawn from consideration for further finalization with the interested central executive authorities 105. According to data from the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Organizations, on July 24, the state, in the person of the Cabinet of Ministers of Ukraine, with a registered capital of UAH 100 million, created the State Energy Efficiency Fund. Despite the fact that, in accordance with the Articles of Association of the Energy Efficiency Fund, the Director of the Fund and other members of the Management Board shall be elected and appointed on a competitive basis in accordance with the procedure established by the Supervisory Board for a term of http://saee.gov.ua/uk/news/2477 http://saee.gov.ua/uk/news/2496 99 http://saee.gov.ua/uk/news/2469 100 http://saee.gov.ua/uk/news/2465 101 http://saee.gov.ua/uk/news/2459 102 http://saee.gov.ua/uk/news/2491 103 http://saee.gov.ua/uk/news/2472 104 https://www.youtube.com/watch?v=dlVduqsHuj8 105 https://www.kmu.gov.ua/ua/meetings/zasidannya-kabinetu-ministriv-ukrayini-10-07-2018 97 98
Energy Efficiency and Social Issues
three years, for the implementation of all technical issues regarding the registration of the Fund in accordance with the procedure established by law, Holovatiuk-Ungurianu Yuliya Volodymyrivna, who until today represented the Support Office for Reforms of the Ministry of Regional Development and Trade of Ukraine, was appointed the Temporary Acting Director of the Fund 106. At a regular meeting of the Government on July 26, the Cabinet of Ministers approved amendments to the Articles of Association of the Energy Efficiency Fund, which provides for the establishment of remuneration of the Acting Director of the Energy Efficiency Fund at the time of holding the position in the amount determined in accordance with the Government Resolution On the Conditions and Amounts of Remuneration of Heads of Enterprises Based on State, Communal Property, and Associations of State Enterprises, as well as an increase in the authorized capital of the Fund in the amount of UAH 1.6 billion 107. This year, the “warm loans” program has a fairly high demand among the population, since during a few months almost half of the money was spent. Only in July, the State Agency on Energy Efficiency and Energy Saving repaid UAH 105 million to the population and multi-apartment building co-owners associations. The largest sum of compensation - UAH 70 million - was received by households, which bought energy-efficient materials for insulation of private buildings. In total, in 2018, the participants of the “warm loans” program repaid more than UAH 210 million, and since the beginning of the program in October 2014 - more than UAH 2 billion 108. Directive 2010/31/EC on the energy performance of buildings The Government meeting on July 26 was quite productive in terms of making decisions on implementing the “energy-efficient package” laws. In particular, in compliance with the Law of Ukraine On Energy Efficiency of Buildings, the resolution of the Cabinet of Ministers of Ukraine On Approval of the Procedure for Exchange of Information between the Central Executive Bodies, Certification Commissions in the Process of Independent Monitoring, Professional Certification and Maintenance of Databases of Certificates, Specialists and Reports was adopted. The specified resolution determines the mechanism of information exchange between the Ministry of Regional Development, Construction and Housing and Communal Services, State Agency on Energy Efficiency and Energy Saving and Attestation Commissions conducting professional certification of persons intending to carry out certification of energy efficiency or inspection of engineering systems of buildings 109,110. In addition, the Procedure for conducting professional certification of persons intending to carry out activities on certification of energy efficiency and inspection of engineering systems was approved. The adopted resolution establishes the procedure for carrying out professional certification, which defines the requirements for an educational professional program for conducting vocational training, requirements for conducting such training, the list of the documents necessary for such certification and confirmation of the qualification level, which shall be submitted by a person to a higher educational institution or self-regulatory organization, is provided. The requirements for consideration of submitted documents, requirements for holding qualifying exams, criteria for evaluation and requirements for making a decision on the issue of a qualification certificate, as well as a form of qualification certificate were also established 111,112. https://bit.ly/2M0bnoo https://bit.ly/2K6Hcdi 108 http://saee.gov.ua/uk/news/2484 109 https://bit.ly/2AmdQbw 110 https://www.kmu.gov.ua/ua/npas/pro-zatverdzhennya-poryadku-obminu-informaciyeyu-mizh-centralnimi-organamivikonavchoyi-vladi-atestacijnimi-komisiyami-v-procesi-provedennya-nezalezhnogo-monitoringu-profesijnoyi-atestaciyi-tavedennya-baz-danih-sertifikativ-fahivciv-ta-zvitiv 111 https://bit.ly/2LSPAT3 112 https://www.kmu.gov.ua/ua/npas/pro-zatverdzhennya-poryadku-provedennya-profesijnoyi-atestaciyi-osib-yaki-mayutnamir-provaditi-diyalnist-iz-sertifikaciyi-energetichnoyi-efektivnosti-ta-obstezhennya-inzhenernih-sistem 106 107
Energy Efficiency and Social Issues
Directive 2010/30/EC on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products The Governmental Committee on European, Euro-Atlantic Integration, International Cooperation and Regional Development approved the Technical Regulation on the requirements for eco-design for energy-consuming products prepared by the State Agency on Energy Efficiency and Energy Saving. According to its content, it is a framework one, therefore, after approval by the Government, about 30 special technical regulations for certain types of products should be adopted 113. In particular, the adoption of this document by the Government will enable accelerating the implementation of the provisions of the relevant Directive, which remain unfulfilled. Social issues Co-owners of multi-apartment buildings may already choose the form of government themselves: do it on their own or elect a manager. The manager must take care that it is comfortable to live in a house. He must enter into contracts with suppliers and monitor the quality of services. If multi-apartment building co-owners association does not do this, the local self-government authority should hold a contest for each building and determine a manager for them. Some cities are already conducting such contests, and some are still waiting. But one can see the competition in this area already, Tetiana Boiko said during a media breakfast: “Who, how and why block the creation of the housing and communal services market in Ukraine?�, which was held with the participation of experts and MP Aliona Babak at the Office of Reanimation Package of Reforms on July 24. In this case, bylaws are already developed, but are delayed in the Cabinet of Ministers. Moreover, the Cabinet of Ministers did not even approve the model contract, which must be concluded with a manager. However, the law clearly states that such a contract may be developed by people on their own 114.
113 114
http://saee.gov.ua/uk/news/2482 https://bit.ly/2velSxp
Environment and Renewable Energy Sources
The Committee on Environmental Policy of the Verkhovna Rada of Ukraine considered and proposed to adopt the draft law on the state environmental policy strategy for the period up to 2030, registered in the Verkhovna Rada of Ukraine. Its consideration in the parliament is expected in the fall of this year. Preparation and publication of the necessary acts for the commencement of the strategic environmental assessment procedure in accordance with the recent law has started - in late July, the draft CMU Resolution On Approval of the Procedure for Monitoring the Consequences of the Implementation of the Document of State Planning for Environment, including for Public Health was published for commenting. Ukraine’s Low-Carbon Development Strategy until 2030 has been submitted to the Secretariat of the United Nations Framework Convention on Climate Change. It should be noted that this Strategy also provides for the start of investment in renewable energy sources. Directive 2001/42/ЄС on the assessment of the effects of certain plans and programs on the environment (codification) (Article 363 of the AA) On July 20, at the Aarhus Center, the Ministry of Environment and Natural Resources held a training on the use of strategic environmental assessment for central executive authorities, organized by the Reform Support Team of the Ministry of Environment and Natural Resources and the Institute of Green Economy 115. On July 25, 2018, the Ministry of Environment and Natural Resources made public on its web-site issued the draft CMU Resolution On Approval of the Procedure for Monitoring the Consequences of the Implementation of the Document of State Planning for Environment, including for Public Health for commenting by the public 116. The draft resolution has been developed in pursuance of Article 17 of the Law of Ukraine On Strategic Environmental Assessment and is the first of a number of by-laws necessary for the strategic environmental assessment tool to be put into practice. The procedure defines the basic requirements for the organization and monitoring of the consequences of the implementation of the document of state planning for the environment. The purpose of the monitoring, in accordance with the draft resolution, is to “identify the consequences of the implementation of state planning for the environment, including for public health, ensuring the assessment of the effectiveness and adequacy of measures to prevent, reduce and compensate for negative consequences...”. The procedure contains a list of measures provided for for monitoring, in particular: • • • • •
determining indicators and their target values for all negative consequences; determining indicators and their target values for assessing the effectiveness and adequacy of activities; determining methodological definitions for each of the indicators; determining the frequency of measurement of indicators; determining means and methods for identifying the presence or absence of environmental consequences.
The procedure provides for that the customer of the document of state planning prepares a draft of measures, taking into account the results of public discussion, consultations with executive authorities and cross-border consultations (in case of conducting) and submits it for approval to the state authority or local self-government authority. 115 116
https://menr.gov.ua/news/32596.html https://menr.gov.ua/projects/135
Environment and Renewable Energy Sources
If in the course of monitoring, the negative consequences not provided for by the report are revealed, the customer shall take measures to eliminate them, and also raise the issue with the authority that has approved the document on terminating of the state planning document in the part that led to such consequences and/or decide on making amendments to the document to eliminate them.
Directive 2009/28/EC on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC (Article 338 of the Association Agreement) The strategy of low carbon development of Ukraine up to 2030, which was transferred to the Secretariat of the United Nations Framework Convention on Climate Change, provides for the start of significant investments in the development of RES projects. At the same time, it should be noted that the indicators and provisions of this document will not be legally binding and will be reviewed every 5 years. In addition, the Memorandum of Cooperation was signed between the State Agency on Energy Efficiency and Energy Saving and the GIZ “Consulting Enterprises on Energy Efficiency� Project 117, encouraging of small and medium-sized businesses to more active use of renewable energy sources, in particular, was among the tasks of which. The meeting of the Board of the Ukrainian Wind Energy Association (UWEA) dedicated to the discussion of draft laws, which provides for the introduction of auctions with RES in Ukraine was held this month. It is worth noting that during the meeting, the issue of responsibility for the imbalances, including issues related to the cost of regulation of imbalances and the procedure for calculating them, was identified as one of the key issues that need to be addressed. In general, UWEA’s Board members emphasized that the draft law No. 8449 should be adopted, but it should be finalized based on the results of discussions with experts and the public, as well as taking into account a part of the proposals contained in alternative draft laws.
https://www.kmu.gov.ua/ua/news/derzhenergoefektivnosti-ta-giz-posilyuyut-spivpracyu-shchodo-stimulyuvannyapidpriyemstv-do-energoefektivnosti-ta-vikoristannya-chistih-dzherel-energiyi 117
Oil
The Action Plan for the Implementation of the First Stage of the Energy Strategy of Ukraine, on the completion of which the Ministry of Energy and Coal Industry reported in January, was published in July 2018. The Cabinet of Ministers announced approval of the “Roadmap for conducting international oil and gas auctions”, although work on it has not yet been completed. If the draft law on maintenance of minimum stocks of oil and oil products is still being prepared, the drafting of the new wording of the Subsoil Code of Ukraine, which should have been adopted in 2016, has been actually stopped. Taking into account the new deadlines for the fulfillment of the relevant task set by the Government in June 2018, the adoption of this document will only take place after the formation of a new composition of the Verkhovna Rada. Directive 2009/119/EC imposing an obligation on Member States to maintain minimum stocks of crude oil and/or petroleum products (Article 338 of the Association Agreement) In the Action Plan for the Implementation of the First Stage of the Energy Strategy of Ukraine up to 2035 118 published on July 17, 2018, the timing of the tasks 749 and 750, the implementation of which is provided for by the action plan for the implementation of the Association Agreement, is extended 119: •
•
drafting and submitting to the Cabinet of Ministers of Ukraine of the draft regulatory legal act on approving a model for maintaining minimum stocks of crude oil and oil products and their use in case of violation of oil supply from July 1 to 31, 2018 (responsible – State Agency of Reserve, Ministry of Economic Development and Trade, Ministry of Finance, Ministry of Energy and Coal Industry, PJSC NJSC Naftogaz of Ukraine (with consent), PJSC Ukrtransnafta (with consent); task 128); drafting and submitting to the Cabinet of Ministers of Ukraine of the draft Law of Ukraine On Minimum Oil and Oil Products Reserve (including amendments to legislative acts) and drafts of other regulatory legal acts necessary for the implementation of the selected model of minimum oil and oil products reserves - from July 1 to October 1, 2018 (responsible - State Agency of Reserve, Ministry of Economic Development and Trade, Ministry of Finance, Ministry of Energy and Coal Industry, PJSC NJSC Naftogaz of Ukraine (with consent), PJSC Ukrtransnafta (with consent), task 129).
As of August 5, 2018: •
•
Draft Government Resolution On Approval of the Model for the Formation of Minimum Oil and Oil Products Reserves in Ukraine and its Financing in Ukraine is being finalized by the State Agency of Reserve after the comments made by the Ministry of Economic Development and Trade on June 25, 2018; Draft Law On Minimum Oil and Oil Products Reserves, prepared by experts of the EU Technical Assistance Project “Assistance to Ukraine in the Process of Implementation of Energy Sector Reforms in Accordance with the International Obligations of the Country”, is elaborated by the members of the Working Group on the Formation of Strategic Oil and Oil Reserves at the State Agency of Reserve. The next meeting of the group is scheduled for the first decade of September.
The plan 120 additionally entrusted to the State Agency of Reserve, the Ministry of Energy and Coal Industry, PJSC NJSC Naftogaz of Ukraine (with consent) and PJSC Ukrtransnafta (with the consent) to implement preparatory engineering and technical measures for the formation of the minimum oil and oil products reserves, which should result in evaluation of needs for additional reservoir capacities and implementation of their design (task 130) until December 31, 2018. According to preliminary estimates of Ukrainian and European experts, reservoir parks of PJSC Ukrtransnafta (in the presence of 0.40 mcm), automobile petroleum and diesel fuel - the capacity of six complexes of the State Agency of Reserve (in the amount of 0.11 and 0.53 mcm) and business entities (for example, WOG network - 0.08 and 0.12 mcm, respectively) can be used for storing the minimum crude oil reserves. Since there are less than 40% of the required storage capacity (1.24 of 2.87 mcm), existing (0.62 mcm) reservoirs should be modernized, and new ones (1.00 mcm) should be built. http://zakon5.rada.gov.ua/laws/show/497-2018-%D1%80 https://www.kmu.gov.ua/ua/npas/pro-vikonannya-ugodi-pro-asociaciyu-mizh-ukrayinoyu-z-odniyeyi-storoni-ta-yevropejskimsoyuzom-yevropejskim-spivtovaristvom-z-atomnoyi-energiyi-i-yihnimi-derzhavami-chlenami-z-inshoyi-storoni 120 http://zakon5.rada.gov.ua/laws/show/497-2018-%D1%80 118 119
Oil
Directive 99/32/EC 121 relating to a reduction in the sulfur content of certain liquid fuels and amending Directive 93/12/EC, as amended by Regulation (EC) 1882/2003 and Directive 2005/33/EC On July 17, 2018, the action plan for the implementation of the first stage of the Energy Strategy of Ukraine up to 2035 122 (paragraph 119, responsible executors - Ministry of Energy and Coal Industry and the Ministry of Economic Development and Trade), the deadlines of the following actions were extended until the end of 2019: • • • •
determination of the market supervision (control) authority in the oil products market, as stipulated by the requirement of Directive 99/32/EC as regards the determination of the authorized authority; implementation of amendments to the Technical Regulation concerning requirements for motor petroleum, diesel, marine and boiler fuels in order to bring it into line with the requirements of Directives 98/70/EC and 2016/802/EC; implementation of the Technical Regulation concerning requirements for the liquefied petroleum gas; implementation of national standards necessary for the full harmonization of the requirements for the quality and safety of hydrocarbon fuels in Ukraine and the EU.
The clause on the development of the Technical Regulation on requirements for aviation petroleum and fuels for jet engines, the work on which was scheduled to be completed by January 1, 2018 (task 32 123) fell out of the list. However, the fulfillment of this task was included by the Ministry of Energy and Coal Industry to the Action Plan for 2018 124 (paragraph 6, Annex 2, the deadline for implementation - December 2018). The functions of the market supervision (control) authority in the oil products market are planned to be entrusted to the State Environmental Protection Service, which will be established by the end of 2019 (task 1.2 of the plan 125). The revised draft resolution 126 amending the Technical Regulation 127 to bring it into line with the requirements of Directives 98/70/EC and 2016/802/EC (task 1702.4 of the action plan 128) was developed by the State Regulatory Service as of August 5, 2018. However, the preliminary analysis of this document suggests the need to introduce more substantial changes to the Technical Regulation due in particular to the fact that the deadline for the introduction into circulation of motor petroleum and diesel fuel of lower environmental classes than Euro5 expired on December 31, 2017. The Draft Technical Regulation on Gas Requirements for Petroleum Liquefied Gas, developed by an interagency working group established on March 12, 2018 by the order of the Ministry of Energy and Coal Industry No. 159 129, should be submitted for approval by November 1, 2018. The National Standardization Work Program for 2018 130 provided for the adoption of 29 standards required to harmonize the requirements for the quality and safety of hydrocarbon fuels in Ukraine and the EU by the end of the year. As of August 5, 2018, first wordings were developed for three of them, the final one – for one, 14 returned for revision, work on 11 standards has not been started 131.
Directive 99/32/EC (other designation – 1999/32/ЄС) coded on May 11, 2016 (Directive 2016/802/EC). http://zakon5.rada.gov.ua/laws/show/497-2018-%D1%80 123 http://www.me.gov.ua/Documents/Download?id=d8571d0b-53a6-4ade-88c1-75579be0cb39 124 http://mpe.kmu.gov.ua/minugol/doccatalog/document?id=245282918 125 https://www.kmu.gov.ua/ua/npas/pro-zatverd 126 http://www.drs.gov.ua/wp-content/uploads/2018/05/6795-10.05.18.pdf 127 http://zakon.rada.gov.ua/go/927-2013-п 128 https://www.kmu.gov.ua/ua/npas/pro-vikonannya-ugodi-pro-asociaciyu-mizh-ukrayinoyu-z-odniyeyi-storoni-ta-yevropejskimsoyuzom-yevropejskim-spivtovaristvom-z-atomnoyi-energiyi-i-yihnimi-derzhavami-chlenami-z-inshoyi-storoni 129 http://www.mev.gov.ua/sites/default/files/docfiles/nakaz_no_159_vid_12.03.2018.pdf 130 http://uas.org.ua/wp-content/uploads/2018/02/2018-02-20.zip 131 http://uas.org.ua/wp-content/uploads/2018/06/Zvit_vikon-cherven-15-06-2018_Rrogram-2018Dod_1Zmina_1.xlsx 121 122
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Directive 98/70/EC relating to the quality of petrol and diesel fuels and amending Directive 93/12/EEC, as amended by Directives 2000/71/EC, 2003/17/EC and 2009/30/EC and Regulation (EC) 1882/2003 (Annex XXX, Art. 360-363, 365, 366 of the AA) In the action plan for the implementation of the first stage of the Energy Strategy of Ukraine for the period up to 2035 132, published on July 17, 2018, the term for the introduction of a system for monitoring the quality of fuel and conducting inspections of market participants on compliance with the established quality requirements was extended to the end of 2020 (paragraph 120, responsible executive agencies Ministry of Energy and Coal Industry, Ministry of Economic Development and Trade, Ministry of Environment and Natural Resources, State Environmental Inspection). Previously, the task 1702.8 of the plan 133 provided for that fuel quality monitoring should have been introduced from March 20, 2018. At the same time, the Government has still not withdrawn from the plan 134 the task 1703.4, which provides for establishing the requirements for off-road vehicles and agricultural and forestry tractors “to ensure the possibility of using unleaded petroleum”, already accomplished in 2003 (the law 135). Directive 94/63/EC on the control of volatile organic compound emissions resulting from the storage of patrol and its distribution from terminals to service stations, as amended by Regulation (EC) 1882/2003 (Annex XXX, Articles 360-363, 365, 366 of the AA) In compliance with the requirements of Directive 94/63/EC on the inventory of terminals for storing and loading oil products, the plan 136 provides for by October 31, 2018 (task 1695, responsible executive agency Ministry of Environment and Natural Resources): development, formulation with EU experts and submission for approval to the Cabinet of Ministers of a draft technical regulation that will set requirements for the storage, transportation and transfer of fuel, relevant equipment and service stations; inventory of terminals for storage and loading of petroleum; development of recommendations for the control of the operation of gas stations and storage tanks for oil products of small size. It is surprising that: • • •
tasks 1695 and 1695.4 refer only to petroleum, while Directive 94/63/EC applies to all oil products; task 1695.5 mentioned incomprehensible “reservoirs for storage of oil products of small size” in the work plan of the Ministry of Environment and Natural Resources approved on May 30, 2018 137, the above-mentioned tasks are absent. Instead, the work plan of the Ministry of Energy and Coal Industry 138 provides for “elimination of legal unregulatedness in terms of accounting of the norms of natural losses of oil and oil products in the course of acceptance, storage, issue and transportation” (task 5, Appendix 2, the deadline for implementation - December 2018).
Directive 94/22/EC on the conditions of granting and using authorizations for prospection, exploration and production of hydrocarbons (Annex XXVII, Articles 279, 280, 341 of the AA)
http://zakon5.rada.gov.ua/laws/show/497-2018-%D1%80 https://www.kmu.gov.ua/ua/npas/pro-vikonannya-ugodi-pro-asociaciyu-mizh-ukrayinoyu-z-odniyeyi-storoni-ta-yevropejskimsoyuzom-yevropejskim-spivtovaristvom-z-atomnoyi-energiyi-i-yihnimi-derzhavami-chlenami-z-inshoyi-storoni 134 Ibid. 135 http://zakon2.rada.gov.ua/laws/show/2786-iii 136 https://www.kmu.gov.ua/ua/npas/pro-vikonannya-ugodi-pro-asociaciyu-mizh-ukrayinoyu-z-odniyeyi-storoni-ta-yevropejskimsoyuzom-yevropejskim-spivtovaristvom-z-atomnoyi-energiyi-i-yihnimi-derzhavami-chlenami-z-inshoyi-storoni 137 https://menr.gov.ua/news/32415.html 138 http://mpe.kmu.gov.ua/minugol/doccatalog/document?id=245282918 132 133
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The Action Plan for the Implementation of the First Stage of the Energy Strategy of Ukraine for up to 2035 139 published on July 17, 2018 has shown that the drafting of the new wording of the Subsoil Code of Ukraine, which should have been adopted in 2016 140, has been terminated. The Ministry of Environment and Natural Resources, the State Service of Geology and Mineral Resources, the Ministry of Energy and Coal Industry and the Ministry of Economic Development and Trade are only instructed to “continue work in the area of drafting a new wording of the Code” (task 99, implementation deadline - Q4 2018). Thus, the task 1 of the plan 141 and task 64 of the plan 142 are actually canceled. In addition: • • •
the plan 143 provides for the approval by the end of 2018 of the “technical specification for the EU project on the development of the new Code of Ukraine for mineral resources” (task 9, priorities of the Ministry); the plan 144 provides for that, within the same term, the State Service of Geology and Mineral Resources should prepare amendments to Article 62 of the current Code (task 4); the plan 145 provides for submission to the Cabinet of Ministers for consideration by October 31, 2019 of the draft law on amendments to the current Subsoil Code of Ukraine on the introduction of switching from the system for obtaining special permits for subsoil use to the conclusion of contracts for the use of subsoil (task 1765.1, responsible executive agency - Ministry of Environment and Natural Resources).
On July 26, 2018, the Government approved the Roadmap for Holding International Oil and Gas Auctions. As stated in the report 146, the implementation of this document will open the way for the coming in Ukraine of the latest world technologies and ensure equal and transparent competition conditions for business. However, in the list of documents approved at the Government meeting on July 26, 2018 147, there is no “road map” 148, and the report 149 states that on July 30, 2018, the working group only “discussed” the document indicated. The official website of the Ministry of Environment and Natural Resources 150 also did not inform about new regulatory acts. However, it can be assumed that the “roadmap” in the Cabinet of Ministers is understood as finalized draft Government resolutions published by the State Service of Geology and Mineral Resources on July 09, 2018: •
•
On the implementation of the pilot project on the implementation of auctions for the sale of special permits for the use of subsoil through electronic auction 151, submitted to the State Regulatory Service on July 17, 2018 152 (work plan of the Ministry of Environment and Natural Resources 153, section 1, task 3, priorities of the Government, the term of implementation - August 2018); On Amendments to the Methodology for Determining the Cost of Reserves and Resources of Mineral Resources of the Deposit or Subsoil Plot Granted for Use 154 (the term of implementation is postponed to October 155 and December 2018 156,157), rejected by the State Regulatory Service (decision No. 202 of
http://zakon5.rada.gov.ua/laws/show/497-2018-%D1%80 http://www.kmu.gov.ua/document/248102926/Dir_94_22.pdf 141 http://geo.gov.ua/sites/default/files/imce/nakaz_no_557.pdf 142 http://www.drs.gov.ua/deregulation/plan-deregulyatsiyi-2016-2017-rr/ 143 https://menr.gov.ua/news/32415.html 144 http://geo.gov.ua/sites/default/files/imce/nakaz_no_557.pdf 145 https://www.kmu.gov.ua/ua/npas/pro-vikonannya-ugodi-pro-asociaciyu-mizh-ukrayinoyu-z-odniyeyi-storoni-ta-yevropejskimsoyuzom-yevropejskim-spivtovaristvom-z-atomnoyi-energiyi-i-yihnimi-derzhavami-chlenami-z-inshoyi-storoni 146 https://www.kmu.gov.ua/ua/news/volodimir-kistion-uryad-vidkrivaye-shlyah-dlya-prihodu-v-ukrayinu-novitnih-svitovihtehnologij-gazovidobutku 147 https://www.kmu.gov.ua/ua/npasearch 148 As of August 5, 2018. 149 https://www.facebook.com/permalink.php?story_fbid=1038233156352469&id=100004973836647 150 https://menr.gov.ua/timeline/Zakonotvorcha-diyalnist.html 151 http://www.geo.gov.ua/wpcontent/uploads/2018/07/%D0%9F%D0%BE%D1%81%D1%82%D0%B0%D0%BD%D0%BE%D0%B2%D0%B0_%D0%B5%D0%BB%D0 %B5%D0%BA%D1%82%D1%80%D0%BE%D0%BD%D0%BDi_%D0%B0%D1%83%D0%BA%D1%86i%D0%BE%D0%BD%D0%B803.07.docx 152 http://www.drs.gov.ua/wp-content/uploads/2018/07/10136_19-18.pdf 153 https://menr.gov.ua/news/32415.html 154 http://www.geo.gov.ua/wp-content/uploads/2018/05/zmpostkmu1117_2017_ok_0.doc 155 https://menr.gov.ua/news/32415.html 139 140
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May 7, 2018 158) through the non-compliance by the developers with the key principles of state regulatory policy and repeatedly submitted on July 17, 2018 159. It provides for taking into account depreciation deductions in the calculation of the cost of resources of the subsoil provided for use (which will increase the profitability ratio) and introduction in the initial year of the zero (and not the first) step of the cash flow, during which the discounting procedure is not applied (which will increase the accumulated discounted cash flow).
In addition to these documents, the work plan of the Ministry of Environment and Natural Resources approved on May 30, 2018 160 provides for the development and submission to the Cabinet of Ministers of Ukraine of drafts of: •
•
resolution on ensuring the possibility of submission by business entities of documents for obtaining/extending special permits for the use of subsoil in electronic form with the use of electronic digital signature, as well as the ability to track the status of the submitted documents through the applicant’s personal account (section 1, task 2, Government priorities, deadline - October 2018); Law of Ukraine On Amendments to the Law of Ukraine On Approval of the National Program for the Development of the Mineral Resources of Ukraine until 2030 (section 1, task 8, priorities of the Ministry, deadline - December 2018).
At the same time, the state of preparation of the following draft Government regulations is still unknown: •
•
On Amendments to the Methodology for Determining the Initial Sales Price at the Auction for a Special Permit for the Use of Subsoil 161 (the deadline is postponed to November 2018 162), which should introduce a differentiated approach to the evaluation depending on the purpose of the work (exploration or production), the degree of validity of geological materials (resources or reserves) and type of deposits depending on the complexity of production (traditional or non-traditional methods); On Amendments to the Classification of Reserves and Resources of Mineral Resources of the State Fund of Subsoil (the deadline for implementation is postponed to September 2018) 163, which aims to ensure that sub-users can apply the provisions of the United Nations Framework for Fossil Energy and Mineral Resources 2009 (UNFC 2009). The classification 164 was proposed to be supplemented by paragraph 28, which provides for the use for the needs of the user of the subsoil in his application of international standards UNFC 2009, CRIRSCO, PRMS, etc 165.
Article 279 of the Association Agreement as regards ensuring equity of access and exercising of the activities of prospecting, exploring and producing hydrocarbons Since, in accordance with clause 3 of Article 279, each party must ensure equal access of all subsoil users to subsoil sites, on July 23, 2018, after the direct protocol order of the Prime Minister of July 21, 2018, the State Service of Geology and Mineral Resources has extended 39 special permits for the use of subsoil, which belong to PJSC Ukrgazvydobuvannya 166, for 39 years. On July 26, 2018, it was confirmed that on October 25, 2018, the State Service of Geology and Mineral Resources will hold the first auction for the sale of special permits for use of four oil and gas fields (Yavorivska, Lypovetska, Chernytska in the Lviv region and Surmachivska in the Sumy region) 167. Potential sub-users have 75 days to submit applications - until August 27, 2018. https://menr.gov.ua/files/docs/nakazy/nakaz_475.pdf http://geo.gov.ua/sites/default/files/imce/nakaz_no_557.pdf 158 http://www.drs.gov.ua/wp-content/uploads/2018/04/4384-vid-07.05.18.pdf 159 http://www.drs.gov.ua/wp-content/uploads/2018/07/10137_19-18.pdf 160 https://menr.gov.ua/news/32415.html 161 http://zakon0.rada.gov.ua/laws/show/1374-2004-%D0%BF 162 https://menr.gov.ua/news/32415.html 163 Ibid. (section 1, task 4). 164 http://zakon2.rada.gov.ua/laws/show/432-97-%D0%BF 165 http://www.geo.gov.ua/sites/default/files/imce/proekt_pkmu_pro_zminy_do_pkmu_no432_okk.doc 166 http://www.geo.gov.ua/derzhgeonadra-prodovzhili-39-specdozvoliv-at-ukrgazvidobuvannya/ 167 http://www.geo.gov.ua/zagalna-startova-cina-44-naftogazovix-dilyanok-stanovitime-3-mlrd-griven/ 156 157
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On the same day, it was announced 168 that in September 2018, preparations for the “first international auction” to be held in January-February 2019, covering 44 oil and gas fields, would be started. The guarantee contribution for participation in it will be 20% of the starting cost of the lot, the cost of the package of auction documentation – 3.12% of the initial cost of the permit (but not less than UAH 4.50 thousand and not more than UAH 72.55 thousand). Electronic bids for oil and gas fields will be held not after 220, but 50 days after the posting of an information notice. If less than two bid applications are submitted, they will be considered invalid. Since, in accordance with paragraph 4 of Article 279, each party “may require that the entity, to which the permit for exploration, extraction and production of hydrocarbons have been issued, pays a financial contribution or contribution in hydrocarbons”, in March-June 2018 the State Service of Geology and Mineral Resources held 306 inspections on compliance with the requirements of the legislation on subsoil use. As noted, violations were detected in 292 instances 169. In particular, it is a violation of the terms of a special permit; lack of documents for the right to use the land plot; violation of terms of work determined by the program; extraction of minerals after the termination of a special permit. At the same time, it is surprising that, despite revealing violations in 292 cases, only 30 protocols on administrative violations have been drawn up, and only 19 officials have been made accountable. The ultimate goal of inspections is to remove unused (”sleeping’) licenses. On June 18, 2018, temporary Acting Chairman of the State Service of Geology and Mineral Resources O. Kyryliuk informed that the relevant work will be completed “within two months” 170, although Ukrainian legislators did not provide for a transparent and understandable mechanism for achieving the goal set. Article 280 of the Association Agreement as regards ensuring transparency in granting licenses for prospecting or exploring hydrocarbons According to the task 206 of the plan 171 and task 7 of the plan 172, of the Ministry of Environment and Natural Resources, it was not enough to introduce simplified digital access to real-time secondary geological information in the first quarter of 2017. However, it was not possible to coordinate the positions of the concerned authorities throughout the year. Only on April 05, 2018, the State Regulatory Service, by its decision No. 152 173, agreed “a compromise version” of the draft Resolution On Approval of the Procedure for the Administration of Geological Information, the Introduction of Amendments to Certain Resolutions of the Cabinet of Ministers of Ukraine and the Invalidation of the Decree of the Cabinet of Ministers of Ukraine of June 13, 1995 No. 423 174. The document, in particular, provides for: • • • • • •
establishing the procedure for the acquisition of geological information that will ensure equal access to it by all interested parties; cancellation of the requirement for the necessity to agree on the sale of geological information created (purchased) on own funds of legal entities and individuals; replacement of agreement with the State Service of Geology and Natural Resources of the sale of geological information by notification; introduction of exclusive grounds for refusal to sell geological information; ensuring the possibility of familiarizing third parties with geological information provided to the subsoil user under the contract of sale of the right to use it, for the performance of a part of the work and/or provision of services by these persons; creation of the Geological Information Catalogue that will determine its location and owner.
http://www.geo.gov.ua/kabmin-zatverdiv-proekt-vprovadzhennya-elektronnix-torgiv-z-prodazhu-specdozvoliv-nakoristuvannya-nadrami/ 169 http://www.geo.gov.ua/955-dolya-viyavlenix-pravoporushen-pri-provedenni-perevirok-vikoristannya-nadr/ 170 http://kompek.rada.gov.ua/documents/krugl_st/73589.html 171 http://www.kmu.gov.ua/document/249935381/R0275.doc 172 http://zakon2.rada.gov.ua/laws/show/1079-2016-%D1%80/paran146#n146 173 http://www.drs.gov.ua/wp-content/uploads/2018/04/3526-vid-05.04.18_18.pdf 174 https://menr.gov.ua/news/32210.html 168
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However, the draft resolution sent to the Cabinet of Ministers by the letter of the Ministry of Environment and Natural Resources of 15.05.2018 No. 5/4-11/4838-18 (paragraph 63 175) has not received any support from the Government committee. On July 10, 2018, the revised document was again submitted to the State Regulatory Service 176. Article 337 of the Association Agreement in terms of informing and protecting customers from unfair selling practices, and access to oil products, including liquefied petroleum gas, for consumers, including for the most vulnerable citizens. On August 01, 2018, the government’s resolution 177, which resolved the issue of determining the starting price for liquefied gas sold at specialized auctions for the needs of the population, entered into force. By September 1, 2018, it, as earlier, will be determined at the price of natural gas for the needs of the population (adjusted for different heat of combustion), which is calculated on the basis of the provision 178. Article 338 of the Association Agreement on the continuation and intensification of cooperation in the field of energy On July 17, 2018, the Action Plan for the Implementation of the First Stage of the Energy Strategy of Ukraine up to 2035 “Security, Energy Efficiency, Competitiveness” 179 approved by the Government on June 07, 2018 was published on July 17, 2018, in pursuance of Article 338, paragraph “a”, on the implementation of energy strategies and policies, development/elaboration of relevant forecasts and scenarios. In addition, on August 1, 2018, the term of implementation of the measures provided for in paragraphs 14, 16, 18, 19, 23, 29, 52, 69, 81, 98, 100, 104, 128, 132, 184, 184 of this plan, of which only 14 and 23 have been performed, expired.
http://www.drs.gov.ua/deregulation/plan-deregulyatsiyi-2016-2017-rr/ http://www.drs.gov.ua/wp-content/uploads/2018/07/9835-11.07.18.pdf 177 https://www.kmu.gov.ua/ua/npas/pro-vnesennya-zmin-do-postanovi-kabinetu-ministriv-ukrayini-vid-22-bereznya-2017-r-187-178 http://zakon2.rada.gov.ua/laws/show/187-2017-%D0%BF 179 http://mpe.kmu.gov.ua/minugol/control/uk/publish/article?art_id=245278572&cat_id=35109 175 176
Business Climate
Public authorities are gradually improving the business climate by various systemic and focused changes. Among the systemic ones, in July, the preparations for the introduction of the Treasury Single Account for payment of customs duties, the registered draft law on the replacement of the corporate income tax with the tax on withdrawn capital may be named. The government’s initiative on switching of the issuance of licenses for the use of subsoil to the online mode, which will significantly simplify the entry of foreign investors into the Ukrainian upstream market, should be also mentioned. Meanwhile, the energy regulator plans to increase the deadline for companies for preparing financial statements. The National Bank has also simplified transactions of attracting external loans and the plan to automate the procedure for their registration. Article 378-379 as regards creating favorable conditions for business In July, the NBU Resolution that would make it easier for Ukrainian resident borrowers to borrow from foreign sources was adopted. The Resolution will come into force on August 20, 2018. The National Bank has applied a number of changes to the norms of the current currency legislation in order to simplify the sphere of regulation of operations of resident borrowers in attracting external credit resources to Ukraine. The procedures for registration of foreign currency credit (loan) agreements concluded by resident borrowers will be completely automated 180. It can be forecasted that access to a more profitable capital market with lower interest rates will be opened and, accordingly, more Ukrainian business and other projects will receive funding for their implementation. The Ministry of Finance, along with the State Fiscal Service (SFS) and the State Treasury Service, in July, took a number of important steps to introduce the Treasury Single Account (TSA) for payment by enterprises of customs payments. At present, the TSA administration unit is being formed and the Protocol for the Exchange of Information between SFS and the Treasury has been signed. It is planned that in the beginning of autumn, an appropriate pilot project for the implementation of TSA will be launched. The Single Account will become mandatory for use from April 16, 2019. This innovation will promote business development, as it will reduce the time for customs clearance and simplify other procedures 181. The President of Ukraine, Petro Poroshenko, submitted to the Verkhovna Rada the draft Law on Amending the Tax Code of Ukraine Regarding the Tax on the Withdrawn Capital 182. The draft Law provides for the replacement of the corporate income tax by the tax on the withdrawn capital from January 1, 2019. Payment of dividends in favor of a tax-avoider, payment of a part of the profit by state non-corporatized, state-owned or communal enterprises, return of contributions to the owner of corporate rights – taxavoider (in the amount exceeding the cost of the contribution made by the founder and/or the owner in the authorized capital of such a legal entity), etc. will be classified as capital withdrawal transactions. At the same time, profits that are reinvested in their own production tax will not be taxed, which in the long run will contribute to the upgrading of production capacities of companies operating in the territory of Ukraine.
Articles 150, 153 on public procurement (as regards the implementation of certain provisions of Directives 2014/24/EC, 2014/25/EC, 89/665/EEC and 92/13/EEC) The placement of the first facilities in ProZorro.Sales system of Small Facilities of Privatization Costing up to UAH 250 million. At present, the authorization of electronic platforms is taking place, and, as of the end of
https://bank.gov.ua/control/uk/publish/article?art_id=74245102&cat_id=55838 https://www.kmu.gov.ua/ua/news/ministerstvo-finansiv-perehodit-do-aktivnoyi-fazi-zaprovadzhennya-yedinogokaznachejskogo-rahunku-dfs-dlya-splati-mitnih-platezhiv 182 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=64356 180 181
Business Climate
July, the right to connect sellers and buyers to auctions of small privatization has already received 18 trading platforms 183.
Articles 262-264, 267 on providing state aid In early July, the AMCU met with representatives of ministries and other departments as regards the implementation of the Law of Ukraine On State Aid to Business Entities. They discussed the need of submitting by state aid providers of information on state support programs that existed as of 02.08.2017, and agreed further cooperation 184.
Article 277 on the Regulator (provisions of Directives 2009/72/EC and 2009/73/EC in parts on the regulatory authority) The NEURC published the draft Resolution on Filing Financial Statements by Licensees 185. It is proposed to increase the term for its preparation: quarterly and annual reports for 5 calendar days. It will be enough to provide only copies of the reports.
Articles 381, 382 on the transparency of the extractive sector The second reading was held for the draft Law No. 6229 on transparency in the extractive industries, however, a sufficient number of votes for its approval was not collected 186. However, MPs submitted the draft law for second reading, which is expected in the fall. The Cabinet of Ministers intends to introduce in Ukraine the issuance of permits and licenses for the use of subsoil, in particular for gas extraction, through the online ProZorro.Sales system. This will make the market more competitive and transparent with the involvement of a wider range of market participants. As expected, the first decisions will be adopted in August 187.
http://www.me.gov.ua/News/Detail?lang=uk-UA&id=66b336ab-3199-4e70-a0b34a909f2c64a5&title=VUkrainiRozpochalasMalaPrivatizatsiia-PershiObktiVzheVProzorro-prodazhi 184 http://www.amc.gov.ua/amku/control/main/uk/publish/article/142775 185 http://www.nerc.gov.ua/index.php?news=7717 186 http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=61409 187 https://www.kmu.gov.ua/ua/news/glava-uryadu-elektronni-aukcioni-na-dozvoli-j-licenziyi-u-gazovidobuvanni-krok-doenergonezalezhnosti 183
Methodology
ANNEX 1. List of Articles of the Association Agreement and Acquis Subject to Monitoring
The group Electricity and Nuclear Security conducts monitoring and assessment of issues relating to electricity, nuclear energy, coal and elimination of consequences of the Chornobyl accident. Acquis concerned: Article 269, Chapter 11, Title IV, Directive 2009/72/EC (market-related provisions) Article 270, Chapter 11, Title IV, Regulation (EC) 714/2009 Article 271, Chapter 11, Title IV, Regulation (EC) 714/2009 Article 273, Chapter 11, Title IV, Regulation (EC) 714/2009, Directive 2009/72/EC Article 274, Chapter 11, Title IV, Regulation (EC) 714/2009, Directive 2009/72/EC Article 305, Chapter 14, Title IV, Directive 2009/72/EC, Directive 2005/89/EC Article 338, Chapter 1, Title V Article 338, Chapter 1, Title V, Cooperation Agreements with IFIs Article 339, Chapter 1, Title V, coal market Article 342, Chapter 1, Title V, cooperation in the nuclear safety sector, Council Directive 2014/87/Euratom, Council Directive 2013/59/Euratom, Council Directive 2006/117/Euratom Article 342, Chapter 1, Title V, cooperation in the nuclear safety sector The group Gas conducts monitoring and assessment of issues relating to gas, in particular, the implementation of the following acquis: Articles 338, 341, Directive 2009/73/EC (market-related provisions) Articles 338, 341, Regulation (EC) 715/2009 Articles 338, 341, Directive 2004/67/EC + Annex XXVI (Early Warning Mechanism), Articles 275 (Unauthorised taking of energy goods), 276 (Interruption), 309 and 314 (resolution of disputes) of the Association Agreement Chapter 11 Trade-related energy, in particular Articles 269 (Domestic regulated prices), 270 (Prohibition of dual pricing), 271 (Customs duties and quantitative restrictions), 272 (Transit) and 273–274 (Transport, cooperation on infrastructure) Annex XXVII to Chapter 1 Energy cooperation, including nuclear issues — Directive 94/22/EC + Articles 279– 280 (Access to and exercise of the activities of prospecting, exploring for and producing hydrocarbons, and licensing conditions) The group Energy Efficiency and Social Issues conducts monitoring and assessment of the implementation of the following acquis: Directive 2010/30/EU Directive 2010/31/EU Directive 2006/32/EU Directive 2012/27/EU Directive 2009/72/EC (social issues) Articles 338, 341 of the Association Agreement Directive 2009/73/EC (social issues) Articles 338, 341 of the Association Agreement
Methodology
The group Environment and Renewable Energy Sources conducts monitoring and assessment of the implementation of the following acquis: Article 363, Directive 2011/92/EU Article 363, Directive 2001/42/EC Article 363, Directive 2003/42/EC Article 363, Directive 2003/35/EC Directives 85/337/EEC and 96/61/EC Article 363, Directive 2008/50/EC Article 363, Directive 1999/32/EC Article 363, Directive 94/63/EC Article 363, Directive 2009/147/EC Article 363, Directive 2010/75/EU Article 338, Directive 2009/28/EC The group Oil conducts monitoring and assessment of the implementation of the following acquis: Directive 2009/119/EC Directive 94/22/EC Directive 98/70/EC Articles 274, Chapter 11 of the Association Agreement (Trade-related energy) Articles 275, Chapter 11 of the Association Agreement (Trade-related energy) Articles 276, Chapter 11 of the Association Agreement (Trade-related energy) Articles 279, Chapter 11 of the Association Agreement (Trade-related energy) Articles 280, Chapter 11 of the Association Agreement (Trade-related energy) Article 337 of the Association Agreement Article 338 of the Association Agreement Article 339 of the Association Agreement The group Business Climate conducts monitoring and assessment of the implementation of the following acquis: Article 27, Chapter 11 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 28, Chapter 11 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 29, Chapter 11 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 88, Chapter 6 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 93, Chapter 6 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Articles 97-102, Chapter 6 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 104, Chapter 6 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 105, Chapter 6 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 107, Chapter 6 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Articles 144-147, Chapter 7 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Chapter 8 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement and the Directive 2014/25/EU Article 255, Chapter 10 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 256, Chapter 10 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 258, Chapter 10 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement
Methodology
Article 263, Chapter 10 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 267, Chapter 10 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement Article 277, Chapter 11 (Title IV TRADE AND TRADE-RELATED MATTERS) of the Association Agreement and Directives 2003/54/EC and 2003/55/EC (as regards the regulatory authority) Articles 355-359, Chapter 5, (Title V ECONOMIC AND SECTOR COOPERATION) of the Association Agreement and Directive 2008/92/EC Article 379, Chapter 10 (Title V ECONOMIC AND SECTOR COOPERATION) of the Association Agreement
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ANNEX 2. Glossary (Short Description) of EU Acquis Subject to Implementation Monitoring
Gas
Directive 2009/73/EC concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC This Directive establishes common rules for the transmission, distribution, supply and storage of natural gas. The rules established by this Directive apply to natural gas, liquefied natural gas (LNG), biogas and gas from biomass. They aim to achieve a competitive, secure and environmentally sustainable market. This Directive provides for compulsory functional unbinding (supply) of transmission system operators (TSO) in vertically integrated undertakings. EU Member States must ensure that all customers are entitled to freely choose natural gas supplier and can easily change supplier within three weeks. At the same time, Member States may impose on suppliers selling gas to household customers obligations which may relate to security, including security of supply, regularity, quality and price of supplies, and environmental protection, including energy efficiency. Regulation (EU) No. 715/2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No. 1775/2005 This Regulation sets common rules for access to gas transmission systems, LNG terminals and storage facilities taking into account the special characteristics of national and regional markets. The document establishes the procedures of certification of transmission system operators, as well as development, elaboration and implementation of network codes (with the participation of the European Network of Transmission System Operators — ENTSO — for Gas). The key objective of this Regulation is to ensure that all market participants have free and non-discriminatory access to relevant infrastructure and capacities. Directive 2004/67/EC concerning measures to safeguard security of natural gas supply This Directive establishes a common framework within which Member States must define general, transparent and non-discriminatory security of supply policies compatible with the requirements of a competitive market, and clarify the roles and responsibilities of market players (including in case of emergency). The government must specify minimum security of supply standards to be complied with by the market players, prepare and update national emergency measures, identify “vulnerable” customers and ensure adequate security for them, establish cooperation with the European Commission and other stakeholders.
Electricity and Nuclear Security Council Directive 2014/87/Euratom of 8 July 2014 amending Directive 2009/71/Euratom establishing a Community framework for the nuclear safety of nuclear installations The Directive establishes a European framework for maintaining and promoting consistent improvement of nuclear safety and its regulation. It sets an ambitious safety goal across the EU in order to prevent accidents and avoid radioactive waste from nuclear installations. The directive applies to any nuclear installation subject to licensing. Council Directive 2013/59/Euratom laying down basic safety standards for protection against the dangers arising from exposure to ionising radiation The Directive establishes basic safety standards to protect the health of employees, the general public, patients and others from the dangers of exposure to ionising radiation. The Directive applies to any planned, existing or emergency situation which involves a risk to ionising radiation. In particular, it applies to: the manufacture, production, processing, handling, disposal, use, storage, holding, transport, import to and export from the EU of radioactive material; the manufacture and operation of electrical equipment emitting ionising radiation; human activities withnatural radiation sources that could lead to a significant increase in the exposure of employees or the public, such as the exposure of space crew to cosmic radiation; domestic exposure to radon gas in indoor air and external exposure to gamma radiation from
Glossary
building materials; managing emergency exposure situations that require measures to protect the public and workers. Directive 2009/72/EC concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC This Directive establishes common rules for the generation, transmission, distribution and supply of electricity. It also lays down universal service obligations and the rights of electricity consumers and clarifies competition requirements. Open internal market enables all consumers freely to choose their suppliers and all suppliers freely to deliver to their customers (free movement of goods, the freedom of establishment and the freedom to provide services). At the same time, this Directive sets stricter requirements to unbundling of transmission system operators (TSO) in vertically integrated undertakings. It also contains consumer rights provisions, reinforces and clarifies the functions and powers of regulatory authorities. Regulation (EC) No. 714/2009 on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No. 1228/2003 This Regulation establishes the rules for cross-border exchanges of electricity with the view to enhancing competition and achieving harmonization within the internal market in electricity. Comparing to the previous Regulation No. 1228/2003, this Regulation contains additional provisions on certification of transmission system operators (TSO), introduction of network codes and publication of information by system operators. It also clarifies that the European Network of Transmission System Operators for Electricity (the ENTSO for Electricity) is responsible for the management of electricity transmission networks to allow trading and supplying electricity across borders within the EU. Directive 2005/89/EC concerning measures to safeguard security of electricity supply and infrastructure investment This Directive establishes measures aimed at safeguarding security of electricity supply so as to ensure the proper functioning of the internal market for electricity, an appropriate level of interconnection between Member States, an adequate level of generation capacity and an adequate balance between supply and demand. It establishes a framework within which Member States are to define general transparent and non-discriminatory policies on security of electricity supply compatible with the requirements of a competitive market for electricity. They must define and publish roles and responsibilities of competent authorities and all relevant market actors. In implementing these measures, Member States are supposed to guarantee continuity of electricity supplies, explore possibilities for cross-border cooperation in relation to security of electricity supply, reduce the long-term effects of the growth of electricity demand, ensure diversity in electricity generation, encourage energy efficiency and the adoption of new technologies, ensure regular renewal of networks. Council Directive 2006/117/Euratom on the supervision and control of shipments of radioactive waste and spent fuel This Directive authorizes transboundary shipments of spent fuel between Member States for processing, requires prior authorization for transboundary shipments of radioactive waste and spent fuel where such fuel is moved from, through the territory of or to a Member State. This Directive also requires return of radioactive waste to its country of origin.
Energy Efficiency and Social Issues
Directive 2010/30/EU on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products This Directive regulates labelling of energy-related products and provision of information to consumers relating to their consumption of electric energy. It applies to products which have a direct or indirect impact on the consumption of energy and on other resources during use. Suppliers placing products on the market must ensure that such products are labelled with the information about their consumption of energy and other resources. Suppliers must also produce technical documentation to include: a general description of the product; the results of design calculations carried out; test reports; the references
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allowing identification of similar models. The technical documentation must be available for inspection purposes for a period ending five years. Suppliers must provide the labels and product-related information free of charge to dealers, and the latter must display labels properly, in a visible and legible manner. Directive 2010/31/EU on the energy performance of buildings This Directive promotes the improvement of the energy performance of buildings within the Union, taking into account outdoor climatic and local conditions. It lays down minimum requirements, common general framework for a methodology and covers energy used for heating, hot water, cooling, ventilation and lighting. National authorities must establish reasonable minimum requirements to energy efficiency to be reviewed every five years. They also establish a system of certification of the energy efficiency. Such certificates provide information to prospective buyers or tenants on the energy performance of buildings, and advice on enhancing it. Directive 2012/27/EU on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC This Directive establishes a common framework of measures for the promotion of energy efficiency within the Union in order to ensure the achievement of the Union’s 2020 20% headline target on energy efficiency. Such measures include: • annual 1.5% energy savings resulting from implementing energy efficiency measures by distribution network operators and suppliers; • enhancing energy performance of heating systems, installation of double-glazed windows and roof insulation; • purchase of buildings, products and services with high energy-efficiency performance by public bodies; • annual energy modernization of at least 3% of the total floor area of buildings owned and occupied by public bodies; • expanding rights and possibilities of consumers in the area of energy management which includes easy and free access to the metering data on the actual consumption; • national incentives for small and medium-sized enterprises to conduct energy audit that should be mandatory for all large enterprises; • monitoring of the energy performance of new energy generating capacities.
Environment and Renewable Energy Sources
Directive 2011/92/EU on the assessment of the effects of certain public and private projects on the environment (codification) This Directive introduces an important instrument of the environmental policy — environmental impact assessment. Member States must ensure, first of all, that projects likely to have significant effects on the environment (by virtue, inter alia, of their nature, size or location) are made subject to a requirement for development consent and an assessment with regard to their effects. This Directive contains two lists of projects subject to environmental impact assessment (from nuclear power stations, gas pipelines, etc., to large pig farms). An important element is stricter publicity requirements, including to the public participation in the environmental impact assessment. Directive 2001/42/EC on the assessment of the effects of certain plans and programmes on the environment This Directive introduces an important instrument of environmental policy — strategic environmental assessment. An environmental assessment must be carried out of certain plans and programmes during their preparation. Such assessment includes preparation of the environmental report (that must contain detail information on the likely significant environmental effects and reasonable alternatives) and consultations with the relevant authorities and the public. Where a transboundary effect is possible, an assessment and consultations in a transboundary context must be carried out.
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Directive 2003/4/EC on public access to environmental information and repealing Council Directive 90/313/EEC This Directive implements the provisions of the Aarhus Conventions relating to public access to environmental information. It aims to guarantee public access to environmental information owned by public authorities — both upon request and through active dissemination thereof. Environmental information must be made available to an applicant within one month after the receipt by the public authority of the applicant’s request. A request for environmental information may be refused if the request is manifestly unreasonable, or formulated in too general a manner, concerns an unfinished document or internal communications. Directive 2003/35/EC providing for public participation in respect of the drawing up of certain plans and programmes relating to the environment and amending with regard to public participation and access to justice Council Directives 85/337/EEC and 96/61/EC This Directive addresses the implementation of the Aarhus Convention in respect of public participation and access to justice. It sets the requirements to the introduction of mechanisms of informing the public, holding consultations with the public and taking account of comments and proposals of the public in decision-making. Member States must ensure that the public is given early and effective opportunities to participate in the preparation and modification or review of the plans or programmes required to be drawn up under the provisions listed in Annex I of the Directive. Directive 2008/50/EC on ambient air quality and cleaner air for Europe This Directive establishes ambient air quality and ambient air quality management standards. For this purpose, it establishes upper and lower assessment thresholds, target and threshold values, sets objectives for the reduction of the effect of particulate matters, defines and classifies zones and agglomerations, introduces the systems of informing the public and ambient air quality assessment with respect to various pollutants. Where, in a given zone or agglomeration, there is a risk that the levels of pollutants will exceed the alert thresholds, short-term action plans must be drawn up. Directive 1999/32/ЕС relating to a reduction in the sulphur content of certain liquid fuels and amending Directive 93/12/EEC, as amended by the Regulation (EC) No. 1882/2003 and Directive 2005/33/EC The purpose of this Directive is to reduce the emissions of sulphur dioxide resulting from the combustion of certain types of liquid fuels and thereby to reduce the harmful effects of such emissions on man and the environment. It sets the maximum sulphur content in heavy fuel oil, gas oil and marine gas oils. It also specifies methods of sampling and analysis of sulphur content in fuel to check compliance with the requirements. Directive 2009/147/EC on the conservation of wild birds (Article 4.2) This Directive relates to the conservation of all species of naturally occurring birds in the wild state in the European territory of the Member States. The mechanism of conservation of wild birds provides for the protection of their habitats; protection and use of birds; prevention of harm that can be caused by invasive species; research and reporting. According to Article 4.2, special protection areas need to be established based on ornitological criteria. Special measures also need to be taken to protect migratory species naturally occurring in the territory of a particular state, especially in wetlands. Directive 2010/75/EU on industrial emissions (integrated pollution prevention and control) This Directive lays down rules on integrated prevention and control of pollution arising from industrial activities. It requires using the integrated approach to activities referred to in Annex I thereto. All installations covered by this Directive must prevent or reduce pollution due to using best available techniques, efficient energy use, prevention and control of emissions. Transparency of the integrated approach is ensured by the public participation. Directive 2009/28/EC on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC
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This Directive provides for setting mandatory national targets for the overall share of energy from renewable sources in the overall energy balance to take account of statistics and potential of each particular country. These targets include the achievement of a 20% share of energy from renewable sources in overall Energy Community energy consumption by 2020 and a 10% target to be achieved for the share of RES in the transport sector. This Directive, among other, establishes rules for joint green energy projects between Member States and third countries and access to the grid-system of electricity produced from renewable energy sources.
Oil
Directive 2009/119/EC imposing an obligation on Member States to maintain minimum stocks of crude oil and/or petroleum products This Directive lays down rules aimed at ensuring a high level of security of oil supply in the Community through reliable and transparent mechanisms based on solidarity amongst Member States. It provides for the adoption of such laws, regulations or administrative provisions as may be appropriate in order to ensure that the total oil stocks maintained at all times within the Community for their benefit correspond, at the very least, to 90 days of average daily net imports or 61 days of average daily inland consumption, whichever of the two quantities is greater. Directive 98/70/EC relating to the quality of petrol and diesel fuels The EU introduced rules prohibiting leaded petrol and limiting the permitted sulphur content in diesel fuel with the view to improving air quality and reducing greenhouse gas emissions. This Directive sets technical specifications applicable to petrol, diesel fuels and biofuels used in vehicles, as well as to gas oils used in non-road mobile machinery. Apart from the prohibition of marketing leaded petrol, Member States must conduct assessment of national consumption of fuel, adopt laws and identify the authorized body (bodies) to introduce the fuel quality monitoring system. Directive 94/63/EC on the control of volatile organic compound (VOC) emissions resulting from the storage of petrol and its distribution from terminals to service stations, as amended by Regulation No. 1882/2003 188 This Directive provides for the registration of all terminals used for storage, loading and unloading of oil products, installation of technical means allowing reduction of VOC emissions from mobile containers with oil products, bringing all stationary tanks, rail, marine and motor vehicle tanks and loading installations in compliance with the established requirements. Directive 94/22/EC on the conditions for granting and using authorizations for the prospection, exploration and production of hydrocarbons This Directive establishes common rules to ensure the non-discriminatory access to and pursuit of activities relating to the prospection, exploration and production of hydrocarbons. These objective and transparent rules reinforce integration of the internal energy market, encourage greater competition and improve security of supply. The document provides for the implementation of measures to ensure: • equal access to all organizations possessing necessary resources for prospecting, exploring for and producing hydrocarbons; • granting authorizations on the basis of objective, published criteria; • communication of all necessary information to all organizations participating in the established procedures.
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The official translation has a lot of mistakes resulting from inaccurate translation
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Business Climate
Directive 2014/25/EU on procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC This Directive aims to ensure market openness, as well as fair procurements, in particular in the energy sector: extraction (production), transmission and distribution of gas, heat, electricity. Directive 2009/72/EC concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC This Directive provides for the implementation of laws on the electricity market which defines electricity as an energy-related product to be purchased/sold/produced/transmitted/stored. These operations may be carried out by all licensed companies on equal competitive conditions. The state also ensures nondiscriminatory access to the existing infrastructure, creates favourable conditions for electricity producers to invest in new forms of energy (wind, solar, etc.). Directive 2009/73/EC concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC This Directive provides for the implementation of laws on the gas market which defines gas as an energyrelated product to be purchased/sold/produced/transmitted/stored. These operations may be carried out by all licensed companies on equal competitive conditions. The state also ensures that companies have non-discriminatory access to distribution networks, gas storage facilities and cross-border gas pipelines. Directive 2008/92/Eะก concerning a Community procedure to improve the transparency of gas and electricity prices charged to industrial end-users Pursuant to that Directive, open, generally accessible mechanisms of providing information on the prices of energy resources for customers must be introduced. A particular methodology of collection of respective information about gas and electricity prices is to be drawn up and the respective mechanism to that effect is to be introduced.