The prospects of energy modernization of industry in 2022, as one of the main tools of eco-transformation in Ukraine during the post-war reconstruction, were discussed with the participants of the GREEN ECONOMIC RECOVERY FORUM, which was held online the day before, and at the special session “Energy-efficient Economy” by leading experts in the field:
- Serhiy Porovskyy, Energy Efficiency Financing and Policy Expert for the UNIDO/GEF UKR IEE Project
- Ima Khrenova-Shymkina, director of the GIZ project “Promotion of energy efficiency and implementation of the EU Directive on energy efficiency in Ukraine”
- Pavlo Pertko, senior expert on industrial energy efficiency and energy management system, UNIDO
- Oliver Loesch, Head of the Business Unit of Energy Policy and Energy Technologies, IREES, Germany, consultant for the project “Promotion of energy efficiency and implementation of the EU Directive on energy efficiency in Ukraine”
- Oleksii Shyshkanov, head of the solar power plant division for Atmosfera’s business
- Oleksii Savin, director of the sustainable development department of JSC UKRGAZBANK
- Nataliia Cherniaieva, Deputy Director for Unisolar Development
- Andrii Frolov, mentor of the UNIDO/GEF project “Global innovation program of clean technologies for small and medium-sized enterprises in Ukraine”
The press service of PAEU has prepared an overview of the participants’ reports.
Liudmyla Tsyhanok, the organizer of the forum, and director of the National Center for Sustainable Development, explains the need for such work right now as follows:
“Metallurgical and chemical enterprises spend the most on energy resources (about 30%), manufacturers of construction materials (15%), manufacturers of wood, paper and printing, machines, equipment and vehicles, as well as food products (up to 10%). It is the products of these industries that Ukraine will need during the war and post-war times in the conditions of the energy crisis, therefore these enterprises need the introduction of immediate energy-efficient technologies the most.”
These enterprises belong to sectors subject to or may in the future be subject to the regulation of the Carbon Border Adjustment Mechanism (CBAM). The EU will introduce it as part of the European Green Deal — an action program for the transition to a climate-neutral economy by 2050.
This mechanism will increase the cost of importing carbon-intensive products to the EU.
The implementation of energy-efficient measures is the optimal way to reduce the company’s overall costs and its transition to the path of green production.
Such actions will affect competitiveness: both from the point of view of reducing the cost of products, and from the perspective of expanding the market for goods by creating an eco-brand image. However, many enterprises do not use this opportunity.
What prevents them from optimizing their energy consumption? And what can stimulate them to take active actions in this direction?
About 48 thousand industrial enterprises of various forms of ownership worked in Ukraine before the war.
All of them are the primary consumers of energy resources in the country – more than 30% of total energy consumption falls on the industrial sector.
The volume of energy used for the production of a unit of goods and services in Ukraine (that is, the energy intensity of GDP) exceeds the world average by two times, and the similar value for the EU by 3-4 times. Due to the low energy efficiency of the economy, Ukraine’s annual losses reach more than one billion US dollars.
The potential for energy efficiency at enterprises is significant. According to experts, it reaches up to 30% of the total energy consumption of the industrial sector.
Ukrainian factories traditionally do not use all available and economically feasible technologies. The use of management practices capable of increasing the efficient use of energy, namely regular energy audits and the implementation of an energy management system according to ISO standards, is not widespread either.
On average, up to 35% of the energy efficiency potential identified in production can be implemented through low-cost energy efficiency measures, the cost of which does not exceed 20,000 euros.
Despite these statistics, enterprises do not feel an urgent need to increase energy efficiency and therefore reduce greenhouse gas emissions.
Serhiy Porovskyy, Energy Efficiency Financing and Policy Expert for theUNIDO/GEF UKR IEE Project emphasizes that energy efficiency in the industry should become a priority in the recovery of Ukraine’s economy. This direction should receive strong support from the state and be a primary focus for business management. The activity of the industrial sector is the basis of GDP formation. Therefore, due to economic processes, energy efficiency in the industry directly affects not only the business itself – its competitiveness and profitability but also the stability of the national economy, energy security; well-being and availability of energy resources for each of us!
“On the part of UNIDO, we support the formation of state policy on energy efficiency and directly industrial companies on the way to increase energy efficiency: we launched the Loan Guarantee Fund for preferential unsecured lending; we have an industry support program (the incentive for establishment and certification EnMS ) in the form of training on the implementation of the energy management system; we also launched the All-Ukrainian Award: Pacesetters for Energy Management.
As Pavlo Pertko, Senior Expert on Industrial Energy Efficiency and Energy Management Systems, UNIDO noted in his presentation during the forum:
The main steps necessary in the sphere of stimulating enterprises to energy efficiency and climate protection:
- Assessment of the main problems of state policy.
- Taking into account key international obligations of Ukraine and best practices for stimulating industrial enterprises.
- Adaptation of the existing mechanisms for stimulating industrial enterprises
- Application of European tools (mechanisms) for stimulating industrial enterprises
- Determination of priority directions and budgetary financing of energy-efficient measures at industrial enterprises
Keys to success:
- Interaction of the most effective mechanisms
- Removal of outdated and ineffective mechanisms
- Providing a balanced set of stimulation and motivation
- Implementation of EnMS at the state level
We will remind you that in 2021 the Verkhovna Rada of Ukraine adopted the long-awaited Law “On Energy Efficiency”.
Undoubtedly, he laid the foundations for overcoming certain barriers. In particular, it is about the mandatory periodic energy audit of large enterprises and the submission of their extracts to the relevant database, the system of qualification of energy auditors, as well as about potentially possible state support programs.
In Ukraine, there are many conscientious enterprises that, despite all the tragic events, are engaged in the energy efficiency of production, and therefore, contribute to the fight against climate change by reducing greenhouse gas emissions. It is important to understand what exactly motivates them to improve energy efficiency and promote better practices in the future.
Organizers of the GREEN ECONOMIC RECOVERY FORUM:
- The Professional Association of Ecologists of Ukraine (PAEU)
- National Center for Sustainable Development
- The UNIDO/GEF UKR IEE Project: “Introduction of Energy Management System Standard in Ukrainian Industry”
- The Project “Promotion of Energy Efficiency and Implementation of the European Energy Efficiency Directive in Ukraine”, implemented by GIZ GmbH on behalf of the German Government