The Parliament plans to extend VAT exemptions for renewable energy equipment

Draft law No. 14090 of 30 September 2025 proposes to temporarily extend, for the duration of martial law in Ukraine but no later than 1 January 2027, the VAT exemption on imports of energy equipment and other goods needed to restore generating capacities that were previously exempted for 2024-2025. This regime is established in Clauses 87‑1 and 88‑1 of Subsection 2 of Section XX Transitional Provisions of the Tax Code. The explanatory note also suggests expanding the list of goods, including wind power equipment, although the draft law does not introduce changes to related regulatory acts.

The Parliament supports new auction rules for distributing support quotas for renewable energy generation

On 21 August 2025 the Parliament adopted in the first reading Draft law No. 13219 On Improving the Competitive Model for Supporting the Production of Electricity from Renewable Energy Sources. The draft law aims to enhance the procedure for organizing and conducting auctions for the distribution of support quotas for renewable energy generation, as well as to amend regulations on guarantees of origin. 

More details on the proposed changes
are available in our legal alert

Draft law No. 11330 has been adopted in the first reading, which aims to harmonise Ukraine's energy legislation with European Union (EU) law and the Energy Community framework, and to facilitate integration of the Ukrainian electricity market with EU markets.

The law lays the legal foundation for Ukraine's participation in the EU's internal electricity market through market coupling, which connects national and regional electricity markets into a single, more efficient system. It introduces key market concepts such as aggregation and flexibility, sets out the roles, rights, obligations and certification process for nominated market operators, and defines Ukraine's cooperation with EU entities like ACER and ENTSO-E.

The purpose of the Roadmap is to enhance the financing mechanism for electricity generation in order to support the sustainable development of renewable energy. This includes consideration of new electricity market participants – the winners of support quota allocation auctions (hereinafter referred to as "auction winners") – held from 1 July 2026. The Roadmap also aims to increase the transparency and financial liquidity of the electricity transmission service tariff and to ensure the targeted use of funds by the TSO, taking into account the support mechanism for electricity producers using alternative energy sources.

The primary focus of the Roadmap’s implementation is the improvement of the regulatory and legal framework to enable, starting from 1 July 2026, the introduction of a renewable energy surcharge separate from the electricity transmission service tariff, along with a new payment system for this surcharge based on the outcomes of the auctions.

Additionally, the Roadmap envisions the implementation of measures throughout the period of improvement for the existing support mechanism for electricity producers from alternative energy sources and the introduction of a new support system for auction winners from 1 July 2026 to 1 January 2030 (hereinafter referred to as the "transition period"). These measures are aimed at addressing urgent issues in the energy sector, particularly by enhancing the support mechanism for alternative energy producers and strengthening the resilience, transparency and financial stability of the TSO.

Support schemes for auction winners who win the auctions held after 1 July 2026 will be funded from the renewable energy surcharge payable by market participants separately from the transmission tariff.

Renewable energy producers who have been awarded with the feed-in tariff before 1 July 2026 will retain the applicable support scheme and will not be affected by the reform for the entire period of the feed-in tariff. 

Draft law No. 13450 was registered in the Parliament on 4 July 2025, establishes a legal framework for identifying, planning and implementing energy infrastructure projects of public interest. The proposal aims to align national legislation with EU Regulation 2022/869 on trans-European energy infrastructure and has been preliminarily approved by the Energy Community Secretariat.

Under the law, an energy infrastructure project of public interest is defined as a project of Energy Community interest, mutual interest and/or one that promotes the sustainable development of Ukraine's energy infrastructure, reliable energy supply and integration into the EU energy space. Such projects must be included in a designated list and implemented as a priority under the new legal framework.

The law also introduces:

• Definitions of key terms, including energy infrastructure, project organiser (customer), project of mutual interest and project of Energy Community interest
• Rules and criteria for selecting and evaluating priority energy infrastructure projects
• The establishment of an interagency commission to oversee implementation and appointment of a competent coordinating authority
• Provisions for the cross-border allocation of investment costs for projects of mutual interest

To enable effective implementation of these infrastructure projects, the law also introduces amendments to Ukraine's land, water, forest and related laws, aimed at accelerating permitting and land access for energy infrastructure initiatives. 

 Key changes include:

• The possibility to buy out land for public needs, accelerated procedures for land acquisition and allocation
• Fixed timelines for decision-making by public authorities (typically 1-2 months)
• Granting TSOs, GTS and LNG operators with the permanent usage rights for water fund lands for the purposes of energy infrastructure projects of public interest
• The right for project initiators to independently commission property valuations
• Extension of validity for property acquisition decisions up to three years

The Ukrainian government has introduced a draft law On the Principles of Ukraine's Green Recovery to establish a legal framework for the integration of environmental and climate considerations into the country's reconstruction. 

The Law defines "sustainable (green) recovery measures" as public or private investment activities that:

• Make a substantial contribution to at least one of the environmental goals set out in the Law such as
  • climate change mitigation
  • biodiversity and ecosystems protection
  • circular economy
  • rational use and protection of water and marine resources
  • prevention and control of pollution
  • adaptation to climate change
• Inflict no significant harm to any of the other listed goals
• Meet technical screening criteria established by the Law
• Comply with minimum social safeguards

The law also introduces:

• A unified system for assessing whether recovery projects are sustainable
• National-level planning instruments such as a Green Recovery Strategy and action plans
• A governance structure, including a National Council for Green Recovery

The law aims to implement EU law, especially the Taxonomy Regulation (EU Regulation 2020/852) and the Do No Significant Harm principle from EU Regulation 2024/792 (Ukraine Facility).

Once adopted, the law is expected to unlock EU and donor financing, accelerate climate-aligned rebuilding and contribute to Ukraine's EU accession goals.

 The new version has been submitted with minor revisions: 

• in part 4 of article 5 of the Law of Ukraine On the Electricity Market regarding the powers of the central executive authority in the electricity sector, the proposition to approve construction schedules for power plant works was removed; and
• proposed editorial amendments to article 29 concerning tendering procedures for the construction of generation capacity, energy storage facilities and demand-side management measures were also excluded.

Otherwise, the draft law remains entirely as described 
in our previous legal alert via this link 

Ukraine's Ministry of Economy is currently preparing an official letter to the European Commission requesting the launch of formal negotiations to defer CBAM obligations for Ukrainian exports. Without exemptions, the mechanism poses significant risks to key Ukrainian exports including electricity and metals, potentially leading to revenue losses, reduced investment in energy upgrades and delays in post-war recovery. 

More on CBAM in our previous digest