Incentives for methane mitigation and energy-efficiency improvements in the case of Ukraine's natural gas transmission system

Reducing methane losses is a concern for climate change policy and energy policy. The energy sector is the major source of anthropogenic methane emissions into the atmosphere in Ukraine. Reducing methane emissions and avoiding combustion can be very cost-effective, but various barriers prevent such energy-efficiency measures from taking place. To date, few examples of industry-wide improvements exist. One example of substantial investments into upgrading natural gas transmission system comes from Ukraine's natural gas transmission company, Ukrtransgaz. The company's investments into system upgrades, along with a 34% fall in throughput, resulted in reduction of Ukrtransgaz system's own consumption of natural gas by 68% in 2011 compared to the level in 2005. Evaluating reductions in methane emissions is challenging because of lack of accurate data and gaps in accounting methodologies. At the same time, Ukraine's transmission system has undergone improvements that, at the very least, have contained methane emissions, if not substantially reduced them. In this paper, we describe recent developments in Ukraine's natural gas transmission system and analyze the incentives that forced the sector to pay close attention to its methane losses. Ukraine is one of the most energy-intensive countries, among the largest natural gas consumers in the world, and a significant emitter of methane. The country is also dependent on imports of natural gas. A combination of several factors has created conditions for successful reductions in methane emissions and combustion. These factors include: an eightfold increase in the price of imported natural gas; comprehensive domestic environmental and energy policies, such as the Laws of Ukraine on Protecting the Natural Environment and on Air Protection; policies aimed at integration with European Union's energy market and accession to the Energy Community Treaty; and the country's participation in international cooperation on environment, such as through the Joint Implementation mechanism and the voluntary Global Methane Initiative. Learning about such case studies can help policymakers and sustainability professionals design better policies elsewhere.