New subsoil development program: from environmental friendliness to defense industry
20 December 2024 14:28
ANALYSIS
The Verkhovna Rada of Ukraine has adopted in the second reading an updated national program for the development of Ukraine’s mineral resources until 2030. Draft law No. 6227, which is part of the implementation of the EU’s Critical Raw Materials Act, opens up new prospects for the industry. How will the new law change the subsoil use sector and bring Ukraine one step closer to the EU?
Key changes
- Definition of strategic resources: Mechanisms have been established to classify minerals as critical or strategic, to create lists of them, and to regularly assess security of supply risks.
- Needs of the defense industry: The law clearly defines the types of minerals that are important for the defense sector, taking into account European standards.
- Expansion of partnerships: The list of Ukraine’s partner countries in the field of critical raw materials has been updated, which expands international cooperation.
- Access to geological data: Digital solutions for quick access to geological information are being created for investors (domestic and foreign).
- European standards: Ukraine switches to the classification of mineral reserves and resources according to the UN Resource Classification System, which is understandable for international investors.
- Launch of the geological special fund: The law defines the sources of funding for the program and the prerequisites for the creation of a geological special fund.
Why is it necessary?
The program is focused on environmental friendliness, transparency and investment promotion. It provides for
- integration into global supply chains of critical materials;
- stimulating economic growth through modern low-carbon technologies;
- improving the competitiveness of the Ukrainian economy.
What it means for Ukraine
Approval of the updated program brings national legislation much closer to European standards in the field of subsoil use. Ukraine has every chance to become a key player in the international market for the extraction and processing of strategic minerals.
This is also part of the fulfillment of commitments under the Ukraine Facility and a confirmation of Ukraine’s readiness to integrate into the EU’s Raw Materials Strategy.
I would add that Ukraine is rich in mineral resources in high concentration and in close proximity to each other. The country has significant reserves of coal, iron ore, natural gas, manganese, salt, oil, graphite, etc. The Ministry of Ukraine estimated Ukraine’s investment potential at $5.6 billion.
