EU-Ukraine: New opportunities for a low-carbon Europe?

Ukraine must de-carbonise and find sustainable solutions to its energy challenges. Increased cooperation with the European Union on cleantech innovation and entrepreneurship would help Ukraine to modernise its energy sector and economy, write Alex Romaniuk, Roman Zinchenko and Sophia Opatska.

Alex Romaniuk is coordinator of the Cleantech Venture Forum: Central and Eastern Europe, Lviv 2014; Roman Zinchenko is the chair of Greencubator, a not-for-profit Ukrainian initiative promoting green growth; Sophia Opatska is CEO of Lviv Business School.

A stalled economy, an unhealthy dependency on foreign energy, and a disengaged citizenry: three pressing challenges that will require significant efforts by Ukraine to overcome. Many Ukrainians are looking at the Association Agreement with the European Union as a launch pad for the economic, political and social reforms that they hope will bring a better of quality of life.

A focal point with vast prospects for greater EU-Ukrainian cooperation is the transition to a low-carbon future, particularly in the field of innovation and entrepreneurship. The European Union has chosen this path to stimulate economic growth, ensure energy security and re-engage citizens. Ukrainians could look forward to similar benefits if they choose the same course.

Ukraine was at one time the point of origin for a Europe-wide gas-transit system, home to world’s first grid-connected wind turbine (1936) and first concentrated solar power in the 1980s. Today, Ukraine faces enormous energy challenges due to its energy-intensive industry and housing, and an over-dependency on fossil fuels. While the country has already committed itself to the European Energy Community Treaty, it is still one of continent’s largest contributors to greenhouse gas emissions.

Now is the time for Ukraine to move to a low-carbon economy and modernise its energy sector. The question is can such a transition be possible without innovative low-carbon industries and the growth of sustainable entrepreneurship? Unlikely. While greener business-models and support for cleantech and green low-carbon SMEs are an integral part of the EU’s approach, they are still a novel concept for Ukraine’s government.

Cleantech is a unique opportunity for Ukraine. It is a rapidly growing industry with the huge potential to reduce Ukraine’s wasteful energy consumption and diversify the country’s energy sources.  Ukraine has much to gain if it can successfully position itself as a serious player in the field.

Government is clearly a major driver for delivering a low-carbon future. But action is equally needed by businesses, universities and research institutes, cities and civil society. The EU could encourage these actors by opening up programmes such as Intelligent Energy Europe, Horizon 2020, and the European Institute for Innovation and Technology’s Climate KIC to Ukrainian partners. Enhancing EU-Ukraine educational, business, municipal and civil society cooperation will contribute to both lowering the environmental and climate impact of old industries and launching new, energy-smart and low-carbon business opportunities.

The Ukrainian Government needs to make innovation and entrepreneurship top priorities, particularly in knowledge-based sectors such as cleantech and IT. Ukrainian businesses must embrace global cleantech opportunities, as well as prepare for the impact that low-carbon policies will have on their businesses. Ukrainian cities can facilitate the transition by creating open and dynamic spaces to foster entrepreneurship.

Fortunately, Ukraine has not stood still. Feed-in-tariff legislation for renewables has created a steady flow of investments into the solar and wind energy sectors. Ukraine is home to world’s sixth largest solar power plant, and a key site for world’s third largest solar developer. The wind energy sector is rapidly developing and gaining the interest of traditional utilities. A number of municipalities are switching from imported gas to local biomass, and the country’s booming agribusinesses are exploring bio-energy as a new opportunity. Cleantech innovation is also becoming a focus for a number of research institutes.

Ukrainian cities have also taken action. Thirty-nine of them are signatories of the EU-supported Covenant of Mayors initiative, committing them to reduce energy consumption by 20%, and increase renewable energy use by 20% by 2020, the same target as their EU counterparts.

These positive steps are a start, but much more is needed. By opening its programmes related to innovation, entrepreneurship, and de-carbonisation to Ukraine, the EU would be encouraging Ukraine to make the transition to a low-carbon economy, while contributing to the EU’s own low-carbon goals.