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Integration instead of membership: EU's energy cooperation with Ukraine

Author : Denys Nazarenko Olena Pavlenko

14:57, 28 November 2016
Integration instead of membership: EU's energy cooperation with Ukraine

Author : Denys Nazarenko Olena Pavlenko

Memorandum of Understanding on a strategic energy partnership creates a possibility to create a gas hub in Ukraine

14:57, 28 November 2016

Read the original text at eurointegration.com.ua.

climatestrategies.org

Ukraine and the European Commission are updating   the strategic objectives of cooperation in energy and related fields. After almost 11 years after the first and only document, Ukraine and the European Commission signed a new Memorandum of Understanding on cooperation in the energy sector.

Related: During the year Ukraine received 14 permits for gas mining, - Groysman

Given the new circumstances, the role of these arrangements can greatly increase, as well as the place of the Energy Sector in the agenda of the Ukrainian government.

Related: Gazprom tried to block Ukrainian gas imports from Europe, - Vitrenko

Why and what for?

November 23, President Poroshenko instructed Energy Minister Ihor Nasalyk to sign on behalf of Ukraine Memorandum of Understanding on a strategic energy partnership between the EU and Ukraine jointly with the European Atomic Energy Community.

Related: EC expanded Gazprom’s access to gas pipeline bypassing Ukraine

This document is intended to update the parties agree, recorded back in 2005, by President Viktor Yushchenko.

Work on the updated Memorandum began last year, when in June 2015, the Department of Energy sent a letter to EU ambassador Jan Tadeusz Tombiński with the proposal to "reboot bilateral cooperation", considering all the new obligations of Ukraine (including membership in the Energy Community) and new challenges that have emerged over the past decade.

Related: Stockholm Syndrome: The risks of "Naftogaz" in trial with "Gazprom"

After the approval of the European side, the process of negotiations, which was added by various stakeholders, including representatives of public organizations and businesses.

Despite declarative document, it creates a framework for cooperation between the Ukrainian and European counterparts in the energy sector and indicates the mutual expectations of each party.

Positions Memorandum shall be taken into account by the EU in setting priorities for technical and financial assistance to Ukraine, development of "beacons" for Ukrainian reforms.

Validity of the document is ten years, with the right to review after five years.

Related: In Russia killed former top manager of "Gazprom"

More solidarity and ecology

Status of the document remained unchanged - the Memorandum does not impose on the parties any legally binding obligations.

However, this character allows the parties even more than last time, fix the mutual wishes and expectations disclose potential cooperation and less restricted tough pragmatism international agreements.

In 2005, cooperation between Ukraine and the EU, judging from the memorial, was built mainly around three themes - nuclear safety, transit of gas and oil, the integration of energy markets.

Now among priorities are scientific and technical cooperation, energy efficiency, calcination economy of Ukraine.

Related: Ukraine’s Naftogaz company demands USD 26,6 bln from Russian Gazprom

This emphasis corresponds to the mood of pan-European policy aimed at reducing emissions, reducing energy consumption and the development of new technologies.

In addition, there are significant section "Energy security, solidarity and trust." Undoubtedly, this may indicate a shift EU-Ukraine relations in the energy sector to a new level, in terms of political will on both sides.

These are the basic principles for the EU as a "solidarity" and "trust" in the previous memorandum is not even mentioned in the context of cooperation between Ukraine and the EU.

Related: Gazprom unveiled gas price for Ukraine

The best embodiment of this political will could be Ukraine's membership in the Energy Union, however, it seems that, the EU is still not ready.

Although the memorandum stipulates that the purpose of the cooperation of both sides is full integration of energy markets Ukraine and the EU, Energy Union is mentioned in the context of the "joint implementation guidelines".

Much attention in the Memorandum is paid to environmental issues and improvement of energy efficiency in Ukraine. EU promises Ukraine to promote low carbon energy and the elements of the economy. Ukraine is expected to transition to high standards of environmental reporting, environmental impact assessment and management of environmental risks taken in Europe.

Related: Poroshenko signs cooperation agreement with European Atomic Energy Community

It returns again on the agenda of the two laws that were recently vetoed - "On Environmental Impact Assessment" and the strategic environmental assessment of projects of national planning - in particular, the need for their early completion and vote in Parliament.

The parties agree on the full support of the planned Energy Efficiency Fund, and especially driven by improved energy performance of public buildings. The draft law on energy efficiency in buildings is currently under consideration and debate in Parliament.

A special place in the document covers security in nuclear energy. Along with greeting uploads Ukraine to the Euratom research programs in the years 2014-2018, the parties have the intention to cooperate closely in the field of security and transparency in the field of nuclear energy, diversification of sources of supply of nuclear fuel.

Cautious "yes" to mutual integration

Document significantly more than in previous versions, draws attention to improving communication between the parties for mutual overflows energy and eliminating regulatory barriers.

Related: EBRD granted $300 mln loan to Ukraine for gas purchase - Naftogaz

Again, provided the political will of both sides, it allows Ukraine to qualify for future EU assistance in the development of the gas interconnector, which for us is extremely important, and in real synchronization operation United Energy System of Ukraine and the power of Central Europe.

The EU also recognizes the importance of Ukraine as a transit country, the document again recorded the promise to implement a joint declaration of 2009 on modernization of Ukrainian gas transportation system.

The current Memorandum creates a possibility to create a gas hub in Ukraine.

Related: Ukraine fines Russia’s Gazprom for USD 3.4 billion, - Anti-Monopoly Committee

To this end, the operator of the gas transportation system is to conclude a series of agreements on gas transportation systems interface with neighboring EU member states, which is important for real integration of markets. However, in this part of the obligations of the parties described quite carefully.

The document specifically notes that the integration of Ukraine’s energy markets requires adaptation its legislation to European standards - another reminder for Ukrainian Parliament in the context of the adoption of the Law on Electricity Market, adopted in the first reading, but raging around which many political passions.

Related: Naftogaz Ukraine: Russia tries to hurt Ukraine’s economy by building Nord Stream II

Finally, the EU also promises proper cooperation between Ukrainian and European regulators. This, in particular, includes exchange of experience in the creation of a truly independent regulatory body, exchange of information, and join the discussion at pan-European regulator.

All these arguments prove: Memorandum of Understanding with the EU in the energy sector is really important event.

But how fast our country will go this road of reform, depends only on us.

Related: Ukraine signed agreement on associated participation in Euratom program

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