Prospects for enhancing the legal framework for carbon credit implementation in Ukraine

The article analyzes the regulatory framework for carbon credits in Ukraine, identifying key gaps and risks. It offers recommendations for legislative improvements based on European and international best practices to create an efficient carbon credit market. The analysis indicates that the development of the legal framework for carbon credits in Ukraine remains insufficient. This inadequacy arises from the absence of a comprehensive regulatory act that delineates the principles governing the emissions trading market, establishes the legal status of carbon units, and defines transparent procedures for the circulation of these units at both the national and international levels. The existing framework for monitoring, reporting, and verifying emissions (MRV) is technically significant; however, it lacks essential regulatory mechanisms for certification, the establishment of a national registry, and the prevention of double-counting. This deficiency raises concerns regarding Ukraine’s capacity to fully participate in the global exchange of carbon units as stipulated in Article 6 of the Paris Agreement. In this context, the legal enforcement of carbon credits is vital, serving both as a climate policy instrument and a means of accessing EU markets. Delays in the establishment of necessary institutions and regulations present risks, including the potential loss of economic opportunities, a slowdown in decarbonization efforts, and a decline in the trust of international partners in Ukrainian climate initiatives. A crucial prerequisite for Ukraine’s integration with the EU climate policy is the establishment of a special law that clearly outlines the principles governing market operations. This legislation should encompass legal definitions, procedures for the authorization and accounting of carbon unit transactions, quality criteria for carbon credits, and the organizational authority of the relevant regulatory bodies. In light of the considerations above, it is recommended to implement a technical and legal approach for national regulatory development activities. This approach should encompass risk assessment methodologies, prevent systemic gaps, align with international transparency standards, and incorporate digital solutions for the registration, verification, and exchange of units. Regulatory design must include institutional safeguards to prevent double-counting and ensure the involvement of independent verifiers. It is crucial to engage business entities, industry associations, and the scientific community in the public discussion and testing of models for the national carbon credit market. This collaborative approach will facilitate the identification of risks related to excessive administrative burdens, ensure that technical solutions align with the practical needs of market participants, and establish stable decarbonization mechanisms grounded in legal certainty and compatible with EU policies. Should these proposed solutions be implemented, Ukraine’s carbon credit market could evolve into a systemic framework, playing a vital role in the country’s green transformation strategy.