B. C. Toms & Co, traditionally one of the leading law firms in Ukraine in environmental and energy law, has developed Kyoto Protocol expertise for Ukrainian Joint Implementation projects. Our Kyoto Protocol Practice Group’s experience in the implementation of Kyoto Protocol mechanisms for emission reductions trading in Ukraine includes the following:
(1) Providing an overview of Ukrainian law on the implementation of Kyoto Protocol mechanisms, with an analysis of the inconsistencies between the international regulations implementing the Kyoto Protocol and Ukrainian law, including pending draft laws and regulations, discussing our concerns with a senior official of the National Agency for Ecological Investments (that is primarily responsible for Kyoto implementation in Ukraine) and providing recommendations on the further development of the legal framework for the implementation of the Kyoto Protocol in Ukraine in order to facilitate ERU projects; (2) Advising on an agreement on collaboration for the implementation of JI projects in Ukraine for the production of ERUs and their sale and delivery; (3) Development of a purchase contract for future ERU purchase transactions; (4) Development of a marketing agreement between an emission reductions trader and the owner of a JI Project regarding the trader’s role to purchase and/or market produced ERUs; (5) Advising on the procedure for the delivery of ERUs from the proposed Ukrainian Registry of Carbon Units to the registry of another state, and developing security mechanisms to protect the purchaser’s interests and prevent duplicate fraudulent sales of the same ERUs to different purchasers; (6) Advising a major chemicals enterprise involved in the production of an industrial acid on its JI project for the reduction of greenhouse gases so as to generate ERUs; (7) Advising on currency control regulations and other financial restrictions affecting JI project implementation and ERU trading (including for the export of ERUs and the making of payments abroad for marketing and trading services); and (8) Advising a major privately owned multinational company on issues concerning Ukrainian Kyoto Protocol legislation that affect its proposed JI projects.
A principal issue for ERU purchase agreements in Ukraine can be the risk of duplicate sales of the same future ERU’s. We are in discussions on improvements to the legal framework in this regard. In the meantime, we have developed solutions to permit ERU projects to proceed, including based on existing pledge and security legislation.