Ukrainian industry demanded from the government to prevent economic and social catastrophe
Leading associations and federations of Ukraine, representing thousands of teams from different industries, appealed to the government of Denis Shmygal with a demand to prevent an increase in the tax burden.
The appeal emphasizes that the named state, and not the Ukrainian industry, has undertaken to pay increased "green" tariffs and it is the state that must provide sources to cover the deficit. Shifting this burden on the industry is not only unfair, but will also have disastrous consequences for the entire economy and national security of Ukraine as a whole, said the Association of Ferroalloy Producers (UkrFA).
They recalled that currently the Ministry of Energy and Coal Industry of Ukraine (Ministry of Energy) is considering the idea of changing the sources of subsidizing "green energy" from the tariff of NEC "Ukrenergo" with a tax on CO emissions 2 , the level of which today is 10 hryvnia per ton of carbon dioxide. At the same time, the "carbon tax" is planned to be increased.
"An increase in the tax burden on Ukrainian industry by 40 billion hryvnia amid the economic crisis will be fatal for the domestic industry - in fact, this will lead to a double increase in the unprofitableness of Ukrainian enterprises," the UkrFA noted.
At the same time, in the near future, additional obligations will be imposed on the Ukrainian industry, including investments in decarbonization in the period 2021-2030. about 37 billion euros and investments in environmental modernization according to draft Law 4167 (implementation of the 75th EU directive) - more than 10 billion euros over 4 years.
According to Ukrainian industrialists, such an initiative is guaranteed to lead to the complete de-industrialization of Ukraine. Since the industry is the basic part and the main driver of the Ukrainian economy as a whole, on which other industries depend, in particular, the transport, port industry, most of small and medium-sized businesses, the "chain reaction" will have a catastrophic effect on them. In addition, there will be a collapse of the largest Ukrainian companies that depend on the level of industrial production in the country, such as JSC "Ukrzaliznytsia", GC "Naftogaz of Ukraine", State Enterprise "Administration of the seaports of Ukraine" and others.
"The lack of sources for multibillion-dollar investments in environmental modernization and decarbonization will not only lead to the closure of many Ukrainian enterprises and a general decline in the Ukrainian economy, but will also directly affect the explosive growth of unemployment, a decrease in the overall standard of living, a decrease in foreign exchange earnings, tax revenues to budgets at all levels, an increase in the deficit of the Pension Fund of Ukraine, a decrease in the level of social support of citizens and the general standard of living, "the association warns.
Representatives of the Ukrainian industry have proposed several steps that, in their opinion, could allow the country to avoid an economic, environmental and social catastrophe:
- The state should take upon itself the fulfillment of obligations to investors in renewable energy sources, and not shift responsibility for their financing to the industry.
- The state must compensate for the financial deficit arising from the issuance of green Eurobonds in the EU at minimal interest rates, since without systemic assistance from the EU, Ukraine will be practically impossible to achieve the goals to reduce CO emissions 2 without critical damage to national economy. At the same time, Eurobonds should be issued not by NEC Ukrenergo, which is the system operator of electricity, on which the additional financial burden on payment of Eurobonds and interest will subsequently collapse, but by the Cabinet of Ministers of Ukraine.
- The state, at the expense of other sources, should create all conditions for reducing the tariff of NEC "Ukrenergo" in terms of the component for the payment of "green" tariffs, which will preserve the competitiveness of the Ukrainian economy.
- Tax on CO 2 , first of all, to direct the modernization of Ukrainian enterprises, mainly by enabling enterprises to use most of this tax on investment projects on energy efficiency, which will save the Ukrainian industry and jobs in the long run.