Guidelines for selecting just transition projects in Ukraine

However, early alignment with the EU’s just transition legislation is essential for avoiding costly and time-consuming revisions in the future. Therefore, these principles and criteria should be embedded in Ukraine’s national and local just transition planning from the outset. 

Ukraine’s 2030 national energy and climate plan and 2050 energy strategy have set 2035 as the target year for phasing out coal-fired power generation. On the path towards EU membership, Ukraine has also adopted the EU’s goal of climate neutrality by 2050. 

Achieving this transition requires a comprehensive set of measures and policies. To this end, regulatory documents should comply with EU standards and directives to ensure consistency with EU Member States. This alignment will prevent the need for revisions and readoptions of relevant documents at a later date, streamlining Ukraine’s European integration over the coming years. 

As part of these efforts, the Ukrainian government is currently developing a national programme to support the just transition of the country’s coal regions. Coal communities are also developing, or intend to develop, their own just transition measures for inclusion in relevant just transition and recovery plans. But to align with EU priorities, just transition projects and measures under these plans must abide by the principles and criteria already established for EU Member States. 

In October 2023, Bankwatch published a guide to help local authorities fairly and objectively select from a wide range of projects aimed at achieving a sustainable energy transition. The guidelines aim to raise regional ambitions for decarbonising the energy sector and ensure funds are allocated in line with just transition objectives.

Here, we expand on the original guidelines by incorporating several key points relevant to Ukraine’s unique circumstances: 

• Ukraine is not yet an EU Member State and is therefore not subject to just transition planning requirements or eligible for funding under the Just Transition Mechanism. However, Ukrainian coal regions can develop plans equivalent to the territorial just transition plans required of EU Member States, design just transition projects, and seek funding from various sources. With Ukraine planning to phase out coal-fired power generation by 2035 and join the EU in the coming years, early preparation is essential. 

• The experience of EU Member States shows that a just transition cannot rely on a single funding source. 

• Ukraine must develop its own mechanisms to finance the just transition of coal and carbon-intensive regions. 

• These mechanisms should leverage financing from multiple sources, including EU funds. Therefore, the next Multiannual Financial Framework must include provisions for just transition funding in accession countries like Ukraine. 

• The Just Transition Mechanism is part of the European Green Deal, where environmental solutions play a key role. As a future EU member and a nation already impacted by EU policies, Ukraine has a vested interest in implementing European Green Deal provisions, particularly those supporting the just transition of coal regions. The Mechanism aims to mitigate the social, economic and environmental impacts of decarbonising carbon-intensive industries. 

With much of Ukraine’s industrial infrastructure already damaged by Russian attacks, the need for a just transition framework is more urgent than ever for coal regions planning their recovery and reconstruction. 

With these specific considerations in mind, it is essential that projects developed by representatives of Ukraine’s coal regions, as part of their recovery and just transition plans, align with decarbonisation criteria, particularly those recommended for EU Member States. 

CEE Bankwatch Networks guides to selecting Just Transition Projects – in English and Ukrainian.