Ukraine’s cabinet of ministers has adopted a regulatory framework enabling the country to participate in international carbon credit markets under the Paris Agreement. The measure opens a formal path for the issuance and transfer of Internationally Transferred Mitigation Outcomes (ITMOs) for the first time.
Ukraine holds bilateral Article 6.2 cooperation agreements with Switzerland and Japan, under which ITMOs may be transferred between participating countries. The new domestic framework provides the legal and administrative basis for those agreements to be activated, establishing formal procedures for ITMO issuance, authorisation, and transfer.
The 15-page document sets out procedures for ITMO issuance, authorisation, and international transfer, including the corresponding adjustments applied when credits are transferred to an acquirer. A two-year pilot phase will test the full cycle before broader implementation is considered.
Priority project sectors include fuel combustion, industrial production, agriculture, waste management, forestry, and energy infrastructure. Annual authorised issuance is capped at 1% of Ukraine’s 1990 carbon emissions. UN data places Ukraine’s 1990 emissions at 706.5 million tonnes of CO₂ equivalent (tCO₂e) excluding land use and forestry, or 916.4 million tCO₂e including the sector—setting the implied maximum annual transfer volume at roughly seven to nine million ITMOs. At least 2% of issued credits must be withheld from international authorisation and reserved for Ukraine’s own Paris Agreement commitments.
Ukraine’s significant emissions-reduction base and history of Kyoto Protocol carbon market participation have positioned the country as a prospective source of high-volume ITMO supply. Progress on domestic carbon market infrastructure had been limited by Ukraine’s sustained focus on its military effort and economic continuity.
A national emissions trading system (ETS) is advancing in parallel, as part of Ukraine’s alignment with EU environmental standards ahead of potential membership. A public consultation on draft ETS legislation launched in mid-May was due to conclude on Monday, according to a briefing by the International Carbon Action Partnership (ICAP). The proposed system would cover power generation, industry, aviation, and maritime transport, broadly mirroring the EU’s cap-and-trade framework. Compliance obligations under the 2028–2034 transitional phase would be phased in from 10% of verified emissions in 2028 to 100% by 2034. Companies could use domestically issued decarbonisation credit certificates towards part of their compliance requirements.