Decarbonisation in Action: Ukrainian Experts Explore Germany’s Experience

How does an emis­sions trad­ing sys­tem func­tion in a coun­try that has been devel­op­ing its cli­mate pol­i­cy for over 30 years? Which solu­tions allow com­pa­nies to remain com­pet­i­tive while simul­ta­ne­ous­ly reduc­ing green­house gas emis­sions? And how does pub­lic pol­i­cy incen­tivise indus­try to invest in decar­bon­i­sa­tion? 

These were the key ques­tions explored by a Ukrain­ian inter­a­gency del­e­ga­tion com­pris­ing rep­re­sen­ta­tives of the Gas Trans­mis­sion Sys­tem Oper­a­tor of Ukraine, Inter­pipe, the Nation­al Cen­ter for Green­house Gas Inven­to­ry (NCI), Naftogaz of Ukraine, and the Sec­re­tari­at of the Cab­i­net of Min­is­ters of Ukraine. The study vis­it to Ger­many was organ­ised by GIZ project “Sup­port for the Estab­lish­ment of an Emis­sions Trad­ing Scheme (ETS) in Ukraine” which is financed by the Ger­man Fed­er­al Min­istry for the Envi­ron­ment, Nature Con­ser­va­tion and Cli­mate Pro­tec­tion (BMUKN) / Inter­na­tion­al Cli­mate Ini­tia­tive (IKI). 

This inter­a­gency com­po­si­tion enabled in-depth dis­cus­sions on the prac­ti­cal aspects of imple­ment­ing green­house gas emis­sions trad­ing in line with state pol­i­cy require­ments and the needs of both indus­try and the ener­gy sec­tor. 

From 22–24 June, the Ukrain­ian del­e­ga­tion vis­it­ed ener­gy and indus­tri­al instal­la­tions in the Ger­man fed­er­al state of North Rhine-West­phalia (NRW) and par­tic­i­pat­ed in expert dis­cus­sions on the func­tion­ing of the Euro­pean Union Emis­sions Trad­ing Sys­tem (EU ETS), the Car­bon Bor­der Adjust­ment Mech­a­nism (CBAM), mon­i­tor­ing, report­ing and ver­i­fi­ca­tion (MRV) sys­tems, and prac­ti­cal approach­es to decar­bon­is­ing ener­gy-inten­sive indus­tries. 

The EU Emissions Trading System: From Policy to Implementation at Installation Level 

The pro­gramme com­menced with a site vis­it to the Tri­anel GmbH (Gas Pow­er Plant, Hamm), pro­vid­ing par­tic­i­pants with direct insights into the struc­tur­al influ­ence of the EU ETS on the mod­ern pow­er gen­er­a­tion sec­tor. 

Plant experts out­lined the nexus between nat­ur­al gas tar­iffs, CO₂ com­pli­ance costs, and pow­er mar­ket pric­ing. Key focus areas includ­ed the crit­i­cal role of bal­anc­ing pow­er in sup­port­ing renew­able ener­gy inte­gra­tion and the influ­ence of EU decar­boniza­tion tar­gets on long-term asset invest­ment. 

The del­e­ga­tion also eval­u­at­ed facil­i­ty mod­erni­sa­tion under Best Avail­able Tech­niques (BAT) guide­lines, the deploy­ment of con­tin­u­ous emis­sions mon­i­tor­ing, and its struc­tur­al inte­gra­tion into cur­rent indus­tri­al pol­lu­tion reforms and inte­grat­ed envi­ron­men­tal per­mit­ting. 

Practical Experience from the Cement Sector: EU ETS Reporting in Practice 

On the fol­low­ing day, 23 June, the del­e­ga­tion con­duct­ed a site vis­it to Spen­ner GmbH & Co. KG, a promi­nent cement man­u­fac­tur­er active­ly exe­cut­ing a com­pre­hen­sive cor­po­rate strat­e­gy to achieve full cli­mate neu­tral­i­ty by 2045. 

Through­out the vis­it, the Ukrain­ian experts were thor­ough­ly briefed on the com­plete emis­sions MRV life­cy­cle, encom­pass­ing every­thing from pri­ma­ry data col­lec­tion to final sub­mis­sion to the com­pe­tent Ger­man author­i­ty via the des­ig­nat­ed elec­tron­ic report­ing plat­form.

Of par­tic­u­lar inter­est were prac­ti­cal exam­ples of deter­min­ing CO₂ emis­sions based on the company’s actu­al pro­duc­tion data, com­mon errors made by oper­a­tors when cal­cu­lat­ing car­bon in raw mate­ri­als and prod­ucts, as well as require­ments for mea­sur­ing equip­ment. 

Fur­ther­more, a ded­i­cat­ed ses­sion was devot­ed to the util­i­sa­tion of alter­na­tive fuels, the deploy­ment of sus­tain­able bio­mass cer­ti­fied under inter­na­tion­al frame­works such as Sus­tain­able Bio­mass Pro­gram (SBP) and Sus­tain­able Resources Ver­i­fi­ca­tion Scheme (SURE), and the strate­gic role of cir­cu­lar waste man­age­ment in mit­i­gat­ing green­house gas emis­sions. 

CBAM and the Future of Ukrainian Exports 

The third day began with a train­ing ses­sion deliv­ered by Ger­man ver­i­fi­er Rain­er Win­ter. He pro­vid­ed a detailed overview of the devel­op­ment of the EU ETS, includ­ing its four trad­ing phas­es, the prin­ci­ples of free allo­ca­tion of allowances, mech­a­nisms to pre­vent car­bon leak­age, and the use of sec­toral bench­mark indi­ca­tors. 

Spe­cial atten­tion was giv­en to the CBAM, which is already sig­nif­i­cant­ly affect­ing Ukrain­ian exporters to the Euro­pean Union. Par­tic­i­pants exam­ined its oper­a­tional frame­work, its link­ages with emis­sions trad­ing sys­tems, and its expect­ed evo­lu­tion beyond the tran­si­tion­al phase. 

ThyssenKrupp: A Large-Scale Example of Heavy Industry Decarbonisation 

The final stage of the vis­it was a tour of the ThyssenK­rupp AG steelworks—one of the largest steel pro­duc­ers in Europe, with pro­duc­tion facil­i­ties exceed­ing the size of the Prin­ci­pal­i­ty of Mona­co. 

Com­pa­ny rep­re­sen­ta­tives pre­sent­ed an ambi­tious decar­bon­i­sa­tion pro­gramme aimed at achiev­ing cli­mate neu­tral­i­ty by 2045. A cen­tral com­po­nent of this trans­for­ma­tion is the con­struc­tion of a new pro­duc­tion instal­la­tion, ini­ti­at­ed in 2024, which will oper­ate on hydro­gen and renew­able elec­tric­i­ty instead of coal. The instal­la­tion is expect­ed to become oper­a­tional in 2027–2028, depend­ing on eco­nom­ic con­di­tions. 

Experts analysed the project’s finan­cial struc­ture as a key focus area. Direct invest­ment in con­struc­tion amounts to approx­i­mate­ly €3 bil­lion, while total pro­ject­ed oper­at­ing costs are esti­mat­ed at near­ly €30 bil­lion. The project received €2 bil­lion in pub­lic grant sup­port: 70% financed from the Ger­man fed­er­al bud­get and 30% from region­al state of NRW funds. This sup­port was approved by the Euro­pean Com­mis­sion under EU State Aid rules specif­i­cal­ly tai­lored for cross-bor­der strate­gic ini­tia­tives (IPCEI) to accel­er­ate indus­tri­al decar­bon­i­sa­tion.  

The ThyssenK­rupp case demon­strat­ed that the tran­si­tion to low-car­bon pro­duc­tion requires an inte­grat­ed approach com­bin­ing inno­v­a­tive tech­nolo­gies, long-term pub­lic pol­i­cy, sta­ble financ­ing mech­a­nisms, and sub­stan­tial indus­tri­al invest­ment. For Ukraine, this exam­ple is par­tic­u­lar­ly rel­e­vant in the con­text of prepar­ing for the imple­men­ta­tion of green­house gas emis­sions trad­ing, illus­trat­ing how mar­ket-based cli­mate instru­ments can be com­bined with pub­lic sup­port mech­a­nisms to accel­er­ate indus­tri­al decar­bon­i­sa­tion. 

Practical Knowledge for Ukrainian Reforms 

The study vis­it enabled Ukrain­ian experts to gain first-hand expe­ri­ence of the imple­men­ta­tion of Euro­pean cli­mate leg­is­la­tion in instal­la­tions oper­at­ing under the EU ETS for many years. 

At the same time, expo­sure to real-world decar­bon­i­sa­tion cas­es demon­strat­ed that emis­sions trad­ing is not only an envi­ron­men­tal instru­ment but also a key dri­ver of indus­tri­al mod­erni­sa­tion, inno­va­tion, and com­pet­i­tive­ness. 

For the Ukrain­ian inter­a­gency team, the vis­it pro­vid­ed an oppor­tu­ni­ty not only to gain prac­ti­cal insights into the func­tion­ing of green­house gas emis­sions trad­ing in Europe, but also to estab­lish pro­fes­sion­al dia­logue with Ger­man indus­try rep­re­sen­ta­tives and experts. The expe­ri­ence will fur­ther con­tribute to improv­ing MRV sys­tems, devel­op­ing reg­u­la­to­ry frame­works, and imple­ment­ing mar­ket-based cli­mate instru­ments in line with Euro­pean Union leg­is­la­tion.