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Recent developments in the fight against climate change January 21, 2010
Cabinet of Ministers of Ukraine (the “CMU”), in its Resolution No. 1313 dated 25 November 2009 defined the procedure for granting state support to joint implementation projects (the “JI Projects”), life cycle of which extends to the period from 1 January 2013 to 31 December 2022 or a longer period. This Resolution entered into force on 18 December 2009.
On 25 November 2009 CMU adopted Resolution No. 1313 “On Approval of the Procedure for State Support of Owners of Objects That Implement Projects Aimed at Reduction of Anthropogenic Emissions of Greenhouse Gases in accordance with Article 6 of the Kyoto Protocol to the UN Framework Convention on Climate Change” (“Resolution No. 1313”), which entered into force on 18 December 2009.
Resolution No. 1313 introduces the state support mechanism, whereby the National Environmental Investment Agency of Ukraine (the “Agency”) may transfer assigned amount units (the “AAUs”) owned by Ukraine to a foreign participant of a JI Project (the investor) in exchange for emission reductions to be generated during the implementation of the JI Project.
The approved JI Projects are eligible for obtaining state support, provided that, at the time of the relevant application, such projects:
generated emission reductions, confirmed by at least one verification report. In this case, an investor may obtain AAUs in the amount not exceeding 75% of the planned emission reductions for the project for the period from 1 January 2013 until 31 December 2022 (or for a longer period – depending on the project life cycle); or
have not generated emission reductions, but must generate them before 31 December 2012, which must be confirmed by verification report not later than 15 July 2013. In this case, an investor may obtain AAUs in the amount not exceeding 50% of the planned emission reductions for the project for the period from 1 January 2013 until 31 December 2022 (or for a longer period – depending on the project life cycle).
In case of a positive decision on granting state support, based on a separate CMU decision and on agreement on state support, which must be concluded between the Agency and a Ukrainian participant of a JI project (the owner of the object), the Agency will transfer the relevant number of AAUs to the investor.
Thus, Ukraine has demonstrated its support of those JI Projects, life cycle of which exceeds the term of validity of the Kyoto Protocol.