In a recent address, Artem Petrenko, the executive director of the Association of Gas Producing Companies of Ukraine, emphasized that long-term demand and predictable market conditions are pivotal for stimulating gas production in Ukraine. On March 19, 2025, Petrenko outlined the challenges facing the gas industry, including a current moratorium on gas exports, which he described as a significant hurdle. He stated, "As of now, there is a moratorium for this year. We need to get through the winter and see how things play out with prices, production, and the filling of underground stores." This statement signals the need for careful monitoring of the gas market as Ukraine enters a pivotal period for energy production.
Despite the limitations of the moratorium, Petrenko advocates for creating clear market signals that will encourage companies to increase their gas extraction activities. He explained that the ability to sell gas at 100% capacity is a vital factor for operational effectiveness. "I understand my colleagues. After all, the opportunity to sell products is a key factor for any company. If they know for sure they can sell gas, it will stimulate them to extract more," he remarked, underscoring the importance of stable market conditions for private companies.
The complex landscape of Ukraine's energy market is further complicated by the unique challenges that the gas industry faces. As Petrenko noted, establishing a viable internal gas market involves fostering an environment where private sector players can thrive. "What we need right now is to develop the domestic gas market and create clear, competitive conditions for the private sector," he reiterated, pushing for reforms that will enable better transparency and predictability.
Petrenko identified key conditions necessary for the growth of the domestic gas production sector, including unwavering long-term gas demand, improved trading mechanisms on the market, and a stable tax policy which he deemed essential for attracting much-needed investment. As such, he pointed to a strategy that requires both governmental backing and private sector engagement to ensure energy security in Ukraine.
In tandem with these efforts in the gas sector, renewable energy investors are also wrestling with regulatory hurdles hindering their operations. On the same day, March 19, 2025, the Ukrainian Wind Energy Association (UWEA) made public its call for the government to enhance the taxation conditions governing the renewable energy sector. The association appealed directly to Ukraine's Prime Minister, Minister of Finance, and other key legislators, advocating for reforms that could alleviate the financial strain on green energy producers amidst a backdrop of substantial financial distress. "Leading profile associations with renewable energy sources, including UWEA, have called for the regulation of taxation issues for electricity market participants," the organization stated emphatically.
The UWEA's plea points to a pressing issue: significant debts faced by renewable energy producers, exacerbated by the fact that only 79.6% of payments for the year 2024 have been fulfilled. This financial distress illustrates the urgent need for government intervention to bolster fiscal stability within the renewable sector, much like the gas sector. Investors have proposed the continuation of the cash method for VAT taxation, which would prevent added financial burdens for companies facing payment delays.
Further recommendations from UWEA include reintroducing provisions within the Tax Code that support the application of the cash method for profit tax specifically for producers of green energy. These changes, they argue, are not just beneficial but critical for stabilizing the electricity market. "The suggested changes are crucial for stabilizing the electricity market, ensuring financial equilibrium among market participants, and stimulating the development of renewable energy in Ukraine," they maintained.
Moreover, energy market analysts echo these calls for reform, stating that improvements in the government’s approach to attracting investors will invigorate building new green power plants, which are essential for the country’s energy independence and security. Analyst Daria Orlova from ExPro Consulting previously argued that the government must refine its mechanisms for investor engagement to both address existing debt issues and foster a more conducive environment for green energy projects to flourish.
In summary, the current state of Ukraine's energy sector faces significant hurdles in both gas extraction and renewable energy investments. With calls for clearer market conditions and stable tax policies to ensure sustainable growth, the future of energy production in Ukraine rests heavily on timely government action. Both the gas and renewable sectors require an environment where investment and production can be scaled to meet the nation’s energy demands without falling prey to market volatility and regulatory unpredictability.
