Preparing for emissions trading in Ukraine through Croatia’s experience

Ukraine’s prepa­ra­tions for a nation­al emis­sions trad­ing sys­tem (ETS) can draw on Croatia’s expe­ri­ence of coor­di­nat­ing pub­lic author­i­ties and sup­port­ing busi­ness­es. A recent study vis­it of the Ukrain­ian del­e­ga­tion to Croa­t­ia showed how this coop­er­a­tion works in prac­tice, from emis­sions report­ing and inde­pen­dent ver­i­fi­ca­tion to cus­toms pro­ce­dures and the use of ETS rev­enues. The cen­tral les­son: Prepar­ing insti­tu­tions and oper­a­tors ear­ly pro­vides time to build the exper­tise and pro­ce­dures need­ed to put the sys­tem into prac­tice.

The Ukrain­ian inter­a­gency del­e­ga­tion vis­it­ed Zagreb from 30 Sep­tem­ber to 2 Octo­ber 2026. Host­ed by Croatia’s Min­istry of Envi­ron­men­tal Pro­tec­tion and Green Tran­si­tion, the three-day pro­gramme exam­ined the imple­men­ta­tion and expan­sion of the Euro­pean Union Emis­sions Trad­ing Sys­tem (EU ETS), tran­si­tion­al arrange­ments for EU acces­sion, and solu­tions to imple­men­ta­tion chal­lenges. It also offered an EU Mem­ber State’s per­spec­tive on the Car­bon Bor­der Adjust­ment Mech­a­nism (CBAM).

The vis­it was sup­port­ed by the GIZ project “Sup­port for the Estab­lish­ment of an Emis­sions Trad­ing Scheme (ETS) in Ukraine”, financed by the Ger­man Fed­er­al Min­istry for the Envi­ron­ment, Cli­mate Action, Nature Con­ser­va­tion and Nuclear Safe­ty (BMUKN) through the Inter­na­tion­al Cli­mate Ini­tia­tive (IKI). The project sup­ports Ukraine in devel­op­ing the insti­tu­tion­al capac­i­ty and pro­ce­dures need­ed to estab­lish a nation­al ETS.

The del­e­ga­tion brought togeth­er rep­re­sen­ta­tives of Ukraine’s Min­istry of Econ­o­my and Envi­ron­ment, the Nation­al Cen­tre for GHG Emis­sion Inven­to­ry, the Sec­re­tari­at of the Verk­hov­na Rada Com­mit­tee on Envi­ron­men­tal Pol­i­cy and Nature Man­age­ment, and the Sec­re­tari­at of the Cab­i­net of Min­is­ters. They were joined by col­leagues from the Nation­al Accred­i­ta­tion Agency of Ukraine, the State Envi­ron­men­tal Inspec­torate, the State Agency on Ener­gy Effi­cien­cy and Ener­gy Sav­ing, and the GIZ project team. Their dif­fer­ent respon­si­bil­i­ties brought leg­isla­tive, tech­ni­cal and super­vi­so­ry per­spec­tives to the dis­cus­sions, help­ing par­tic­i­pants con­sid­er how their work will need to con­nect with­in Ukraine’s future sys­tem.

Croa­t­ian instal­la­tions, includ­ing indus­tri­al and ener­gy facil­i­ties, began mon­i­tor­ing and report­ing emis­sions dur­ing 2010–2012, before full EU ETS par­tic­i­pa­tion in Jan­u­ary 2013 and EU acces­sion that July. This prepa­ra­tion allowed author­i­ties and oper­a­tors to devel­op pro­ce­dures and under­stand their respon­si­bil­i­ties.

Author­i­ties iden­ti­fied instal­la­tions through gov­ern­ment sta­tis­ti­cal data­bas­es, envi­ron­men­tal report­ing records and pub­lic calls. Train­ing, mon­i­tor­ing plan guid­ance and con­sul­ta­tions pre­pared oper­a­tors for par­tic­i­pa­tion, sup­port­ed by inter­na­tion­al tech­ni­cal assis­tance through expert exchanges, work­shops and instal­la­tion vis­its.

The experts also spoke open­ly about the dif­fi­cul­ties they encoun­tered. A small ini­tial team had to nav­i­gate exten­sive leg­is­la­tion and com­plex pro­ce­dures while help­ing oper­a­tors, ver­i­fiers and inspec­tors devel­op the nec­es­sary knowl­edge. Build­ing spe­cialised exper­tise took time, and main­tain­ing it required con­ti­nu­ity with­in insti­tu­tions.

The soon­er Ukraine starts prepar­ing all stake­hold­ers for the nation­al emis­sions trad­ing sys­tem (ETS), the bet­ter. This will pro­vide more time to address the chal­lenges ahead, said Madle­na Ožanić, Head of Ser­vice for Emis­sions Trad­ing Sys­tem at Croatia’s Min­istry of Envi­ron­men­tal Pro­tec­tion and Green Tran­si­tion.

Insti­tu­tion­al coop­er­a­tion was a cen­tral theme. Croatia’s Min­istry acts as the com­pe­tent author­i­ty and nation­al sys­tem admin­is­tra­tor, with respon­si­bil­i­ties for the Union Reg­istry. It works close­ly with the Croa­t­ian Accred­i­ta­tion Agency, State Inspec­torate and Envi­ron­men­tal Pro­tec­tion and Ener­gy Effi­cien­cy Fund. The Min­istry of Finance’s Cus­toms Admin­is­tra­tion plays a key role in imple­ment­ing CBAM.

Each insti­tu­tion con­tributes dis­tinct exper­tise. The Accred­i­ta­tion Agency accred­its ver­i­fi­ca­tion bod­ies to ensure com­pe­tent, inde­pen­dent assess­ment of emis­sions reports. The State Inspec­torate checks com­pli­ance with envi­ron­men­tal leg­is­la­tion and ETS per­mits. The Min­istry draws on these process­es to admin­is­ter the sys­tem and resolve imple­men­ta­tion issues, and estab­lish­es cri­te­ria for allo­cat­ing ETS rev­enues.

A work­ing group con­nects the accred­i­ta­tion agency, ver­i­fiers and Min­istry, sup­port­ed by infor­ma­tion exchange tem­plates. Reg­u­lar meet­ings and work­shops address recur­ring prob­lems and chang­ing require­ments. These arrange­ments illus­trat­ed the val­ue of clear com­mu­ni­ca­tion chan­nels along­side for­mal­ly defined respon­si­bil­i­ties.

Tech­ni­cal ses­sions cov­ered mon­i­tor­ing plan approvals, reg­istry accounts and the steps oper­a­tors and author­i­ties fol­low each year to meet ETS oblig­a­tions. Ses­sions on avi­a­tion and mar­itime trans­port exam­ined the EU ETS’s expand­ing scope, how oper­a­tors are iden­ti­fied and how respon­si­bil­i­ties are assigned to author­i­ties. Par­tic­i­pants also explored Croatia’s prepa­ra­tions for ETS2, the sep­a­rate sys­tem cov­er­ing fuel use in build­ings, road trans­port and addi­tion­al sec­tors.

The Ministry’s open­ness towards oper­a­tors stood out. Its sup­port includes tele­phone and email guid­ance, indi­vid­ual con­sul­ta­tions on mon­i­tor­ing and report­ing, and reg­u­lar meet­ings with oper­a­tors, ver­i­fiers and inspec­tors. Time­ly expla­na­tions of reg­u­la­to­ry changes and assis­tance with report­ing tools help busi­ness­es keep pace with require­ments. Sup­port con­tin­ues beyond the launch of the sys­tem, help­ing oper­a­tors adapt to new rules and apply them cor­rect­ly.

Clear guid­ance helps pre­vent incom­plete mon­i­tor­ing plans, report­ing errors and missed dead­lines. Oper­a­tors’ ful­fil­ment of their oblig­a­tions is essen­tial to Croa­t­ia meet­ing its own respon­si­bil­i­ties under the EU frame­work, mak­ing con­struc­tive rela­tion­ships with busi­ness­es an inte­gral part of effec­tive admin­is­tra­tion.

CBAM dis­cus­sions added a trade per­spec­tive. Min­istry experts out­lined Croatia’s imple­men­ta­tion expe­ri­ence. Cus­toms offi­cials explained how the EU’s Com­bined Nomen­cla­ture prod­uct codes iden­ti­fy goods cov­ered by CBAM and described the role of indi­rect cus­toms rep­re­sen­ta­tives.

Hear­ing direct­ly from the Cus­toms Admin­is­tra­tion gave par­tic­i­pants valu­able insight into the pro­ce­dures used to iden­ti­fy and process import­ed goods. It clar­i­fied the admin­is­tra­tive require­ments sur­round­ing Ukrain­ian exports to the EU and demon­strat­ed why cli­mate author­i­ties, cus­toms offi­cials and busi­ness­es need to coop­er­ate. For Ukraine, this rein­forced the impor­tance of con­nect­ing emis­sions report­ing exper­tise with knowl­edge of cus­toms pro­ce­dures.

The final day addressed Croatia’s car­bon tax and ETS rev­enues. The Envi­ron­men­tal Pro­tec­tion and Ener­gy Effi­cien­cy Fund receives ded­i­cat­ed financ­ing from emis­sions allowance auc­tions, link­ing car­bon pric­ing with invest­ment in the tran­si­tion. Dis­cus­sions high­light­ed the need for clear rules on allo­cat­ing and using these resources, sup­port­ed by over­sight and account­abil­i­ty to ensure com­pli­ance with EU require­ments. This placed rev­enue man­age­ment along­side emis­sions mon­i­tor­ing and enforce­ment as a core part of ETS gov­er­nance. Croatia’s expe­ri­ence offered Ukraine a ref­er­ence for con­nect­ing these func­tions with wider cli­mate objec­tives.

Ukrain­ian par­tic­i­pants also dis­cussed their nation­al mon­i­tor­ing, report­ing and ver­i­fi­ca­tion sys­tem, cur­rent chal­lenges and prepa­ra­tions for an ETS pilot phase. This exchange con­nect­ed Croatia’s expe­ri­ence direct­ly with the tasks fac­ing Ukrain­ian insti­tu­tions.

The vis­it pro­vid­ed exam­ples Ukraine can draw on when devel­op­ing mon­i­tor­ing plan approvals, coor­di­nat­ing accred­i­ta­tion and inspec­tion, and sup­port­ing oper­a­tors. With GIZ project sup­port, the exchange strength­ened pro­fes­sion­al dia­logue on the pro­ce­dures and insti­tu­tion­al rela­tion­ships need­ed for a nation­al ETS. Croatia’s expe­ri­ence rein­forced the impor­tance of start­ing prepa­ra­tions ear­ly and sus­tain­ing coop­er­a­tion and guid­ance as the sys­tem evolves.