The key objective in the energy and environment sectors for the next year is implementation of enacted laws

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During a press briefing at the Ukrainian Crisis Media Center, experts gave their opinion regarding effectiveness of reforms in the energy and environment sectors in 2017. The general consensus was that a number of important laws have been passed during the year, but to facilitate their actual implementation in the next year, it is important to approve the relevant regulatory framework and ensure transparency of the ministries concerned.

As far as business regulation is concerned, the matter of the National Regulator (NCREUS) remains unresolved: this year, both the terms and the process of rotation of NCREUS members haven’t been observed. As a result, the regulator is currently unable to make decisions because of the absence of quorum, and a number of companies cannot approve the necessary tariffs, finding themselves in a situation that blocks their further activity. “Presently, almost 50 companies cannot approve water supply and water discharge tariffs; about 60-70 companies cannot approve heat supply tariffs, and the situation with renewable sources of energy is that of a crisis”, Andrii Panin, an European-Ukrainian Agency expert says.

The oil and petroleum products sector is the only one where Ukraine has failed to fulfill almost all of its commitments, Hennadiy Riabtsev, Special Projects Director at Psyche Center for Science and Technology says. “This is the only area of the EU-Ukraine Association Agreement and the Agreement on Ukraine’s Accession to the Energy Community in which no progress at all was made. The quality of changes that do take place remains low. In most cases, words remain words”, he said. Authorities often report on the already-prepared regulatory acts, even though the documents are published way past the deadline. “Time to stop postponing the deadlines for passage of base draft laws which must be passed the next year. These are the revised Code of Ukraine on Extractable Resources and the law on the minimum stocks of oil and petroleum products which should have been prepared back in 2015, but even drafts of these legislative acts haven’t been published yet”, Hennadiy Riabtsev reminds.

Svitlana Golikova, an independent expert and the CEO of Trans Energo Consulting says that the most positive event in the electricity sector was passage of the law on the electricity market, the launch of a coordination center and adoption of the Energy Strategy for the period until 2035. “Positive shifts did take place, but in fact, real efforts in many areas, such as implementation of the Energy Strategy and the law on the electricity market and activity of the coordination center were all mere words”, Svitlana Golikova said, adding that almost 100 regulatory acts are pending passage as of present.

Another achievement of this year was the passage of all draft laws from the so-called “energy efficiency package”. “Among negative aspects, insufficient transparency of the ministry concerned in implementation of these laws, in particular, adoption of a regulatory framework which is currently inaccessible by the public is worth mentioning”, Yulia Cheberiak, an OPORA Public Network’s expert says. The problem with public access to legislative acts also affects the law on the Energy Efficiency Fund. “The framework law has been passed, but it cannot be implemented because of the absence of regulatory acts. As it turned out, these acts have actually been developed and agreed with government agencies, but neither is accessible by the public”, Yulia Cheberiak adds.

In the gas sector, the main negative trends of 2017 included low speed of unbundling Naftogaz and the remaining non-competitiveness of the gas supply network. The restructuring of Naftogaz and revision of the Resolution 187 which regulates gas supply prices must become priority objectives for the Government next year, Roman Nitsovych, Dixi Group’s Head of Projects and Programs says. “One of the good news for consumers was the adoption by regulator of new standards on gas quality and supply, which came into effect on 8 October. It allows consumers to count on certain monetary compensations if the supplier breaches these rules and standards”, he added.

The biggest achievement in environmental protection was the passage of the law on assessment of environmental impact. However, in order for this law to really work, a quality regulatory framework must be adopted. “Actually, this law must become effective on 18 December, but it requires a large regulatory framework to be adopted, which as of yesterday’s morning has not been adopted yet. But all of a sudden, at the yesterday’s meeting of the Cabinet of Ministers everything was adopted in a matter of two minutes. We don’t know what kind of bylaws are these, what the quality of these documents is, and how it will actually work in practice”, Natalia Andrusevych, a key expert at Society and the Environment Resource Analysis Center says. A number of regulatory acts must also be adopted for the National Plan on Reduction of Emissions from Large Combustion Plants.