Developing a Water Policy Outlook for Georgia, the Republic of Moldova and Ukraine

4. Options for Ukraine’s water policy reform journey – challenges in developing a water policy outlook

Abstract

This chapter considers Ukraine’s ambitions and outlook for its water sector including water-related obligations under the Association Agreement with the European Union and targets under multilateral environmental agreements including the Sustainable Development Goals. Obligations under the EU Water Framework Directive and associated directives are discussed, including time-bound commitments concerning the identification of river basin districts and preparation of river basin plans. The chapter considers Ukraine’s current state of play with regard to water resources and pressures facing the sector. Finally, the chapter considers the existing policy and legislative framework and considers scenarios for possible future reforms.

Ukraine’s relationship with the European Union provides a framework for water policy reform

Over the past few decades, the European Union has intensified its co‑operation with the countries of Eastern Europe and the Caucasus, including Ukraine. This co‑operation has developed notably within the framework of the Eastern Partnership (EaP), which was launched in 2009. Closer bilateral ties culminated in the signing of the EU-Ukraine Association Agreement (AA) including a Deep and Comprehensive Free Trade Area (DCFTA) in 2014. After provisional application, the AA and DCFTA came into force in September 2017. The AA commits Ukraine to bring its legislative and regulatory frameworks into line with those of the European Union in several areas, including environment and water resources management.

The AA defines timeframes in which Ukraine is expected to align national practices with the EU directives related to water quality and resource management, including the marine environment. All provisions should be implemented by 2027, which will mark ten years of the AA’s entry into force. Of these directives, the Water Framework Directive (WFD) is the most crucial legal act concerning water protection and regulation. It aims to ensure the viable, socio-economic management of resources; to protect the quantity and quality of water; and to promote sustainable water use.

The EU-Ukraine AA transcends the WFD, extending to commitments more broadly related to the water sector. Table 4.1 summarises the water-related EU directives, including provisions, timeframes for implementation as defined by the AA and status as of 2021. This assessment covers all water-related EU directives except the Floods Directive and the Marine Strategy Framework Directive.

Ukraine has assigned responsibility for implementation of EU directives to relevant institutions, but some problems persist. Institutional issues remain unresolved in management of both maritime protection and underground waters according to the basin principle. In terms of legislation, Ukraine has partially completed the approximation required by Ukraine’s AA, notably through the 2017 amendment of the 2002 Water Code. However, legislative shortcomings persist, including a lack of definition for “ecological river flow” in water legislation. Pollution is insufficiently monitored and controlled. Sources include diffuse pollution of groundwater with nitrates and phosphorous compounds, as well as pesticides and persistent organic pollutants, discharge of polluted wastewater from municipal treatment facilities and pollution linked to the mining industry. In addition, there are persistent risks of inadequate access to drinking water and sanitation related to floods, droughts and health impacts. Water supply and sanitation (WSS) service delivery varies widely and is particularly inadequate in rural areas. Finally, ageing irrigation and drainage infrastructure leads to reduced agricultural yields and increases risk of desertification.

Table 4.1. EU directives on water quality and resource management and timeframes for their implementation in Ukraine

Directive	Provision	Timeframe (from entry into force in 2017)	Status (2021)
Water Framework Directive (Directive 2000/60/EC establishing a framework for Community action in the field of water policy as amended by Decision No 2455/2001/EC and Directive 2009/31/EC)	Adoption of national legislation and designation of competent authority/authorities	Within three years (i.e. 2020)	2002 Water Code updated in 2017. Ministry of Environmental Protection and Natural Resources responsible for implementation.
	Establishment of legislative definition of the country's territory hydrographic zoning unit	Within three years (i.e. 2020)
	Development of appropriate national legislation (Regulation on Basin Directorate) making the "Basin Directorate" responsible for functions provided by art. 3 of Directive 2000/60/EC	Within three years (i.e. 2020)
	Identification of river basin districts and establishment of administrative arrangements for international rivers, lakes and coastal waters	Within three years (i.e. 2020)	River basin districts have been established and basin councils have been introduced.
	Analysis of the characteristics of river basin districts	Within six years (i.e. 2023)
	Establishment of programmes for monitoring water quality	Within six years (i.e. 2023)
	Preparation of river basin management plans, consultations with the public and publication of these plans	Within ten years (i.e. 2027)	In development.
Floods Directive (Directive 2007/60/EC of the European Parliament and of the Council of 23 October 2007 on the assessment and management of flood risks)	Adoption of national legislation and designation of competent authority/ies	Within two years (i.e. 2019)	Ministry of Internal Affairs and the State Service for Extraordinary Situations responsible for implementation.
	Undertaking preliminary flood assessment	Within four years (i.e. 2021)
	Preparation of flood hazard maps and flood risk maps	Within six years (i.e. 2023)
	Establishment of flood risk management	Within eight years (i.e. 2025)
Urban Waste Water Directive (Directive 91/271/EEC of 21 May 1991 concerning urban waste water treatment as amended by Directive 98/15/EC and Regulation (EC) No 1882/2003)	Adoption of national legislation and designation of competent authority/ies	Within three years (i.e. 2020)	Ministry of Development of Communities and Territories responsible for implementation.
	Assessment of the status of urban wastewater collection and treatment	Within five years (i.e. 2022)
	Identification of sensitive areas and agglomerations	Within six years (i.e. 2023)
	Preparation of technical and investment programme for the urban wastewater collection and treatment	Within eight years (i.e. 2025)
Drinking Water Directive (Directive 98/83/EC of 3 November 1998 on quality of water intended for human consumption as amended by Regulation (EC) No 1882/2003)	Adoption of national legislation and designation of competent authority/ies	Within five years (i.e. 2022)	Ministry of Health Care responsible for implementation.
	Establishment of standards for drinking water	Within five years (i.e. 2022)
	Establishment of a monitoring system	Within five years (i.e. 2022)
	Establishment of a mechanism to provide information to consumers	Within five years (i.e. 2022)
Nitrates Directive (Directive 91/676/EC of 12 December 1991 concerning the protection of waters against pollution caused by nitrates from agricultural sources as amended by Regulation (EC) No 1882/2003)	Adoption of national legislation and designation of competent authority/ies	Within three years (i.e. 2020)	Ministry of Economic, Trade and Agrarian Development and Ministry of Environmental Protection and Natural Resources responsible for implementation.
	Establishment of monitoring programmes	Within four years (i.e. 2021)
	Identification of nitrate vulnerable zones	Within three years (i.e. 2020)
	Establishment of action plans for nitrate vulnerable zones	Within four years (i.e. 2021)
Marine Strategy Framework Directive (Directive 2008/56/EC of the European Parliament and of the Council of 17 June 2008 establishing a framework for Community action in the field of marine environmental policy)	Adoption of national legislation and designation of competent authority/ies	Within two years (i.e. 2019)	Ministry of Environmental Protection and Natural Resources responsible for implementation.
	Development of a marine strategy in co‑operation with relevant EU member state(s)	Within four years (i.e. 2021)
	Initial assessment of marine waters, determination of good environmental status and establishment of environmental targets and indicators	Within four years (i.e. 2021)
	Establishment of a monitoring programme for ongoing assessment and regular updating of targets	Within six years (i.e. 2023)
	Preparation of a programme of measures to achieve good environmental status	Within seven years (i.e. 2024)

Source: Author’s own elaboration based on European Union (2014[1]), “Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part”, Official Journal of the European Union, I. 161/4, 29 May 2014, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:22014A0529(01)&from=EN

In addition to these directives, Ukraine is striving to implement environmental and water-related national legislation. It is also aiming to achieve the Sustainable Development Goals (SDGs) adopted at the 2015 UN Summit (6, 14 and 15). In addition, it wants to ratify the UN Economic Commission for Europe (UNECE) Convention on protection and use of transboundary water courses and international lakes (1999). Finally, it wants to implement the UNECE Convention on access to information to improve public participation in decision making and environmental justice.

Ukraine’s international relations in the water sector relate to transboundary co‑operation on water use and protection. Ukraine joined the Water Convention in 1999 and ratified the Water Protocol in 2003. International water co‑operation under these treaties is carried out through basin agreements (for the Black Sea, and Danube and Dniester rivers). This is a new co‑operation approach in Ukraine and co-exists with Soviet-era bilateral agreements on transboundary water co‑operation with neighbours.

4.1. State of play

4.1.1. Water resources in Ukraine

4.1.1.1. Water use and main pressures on water resources

Ukraine is a relatively water-abundant country, but water use is intensive. Ukraine is the most populous country in the EaP by a wide margin with an economy heavily dependent on agriculture. Following a decrease in freshwater abstraction in Ukraine between 2000 and 2015, abstraction has begun to trend upwards in recent years [Figure 4.1(a)].

Only a fraction of Ukraine’s water resources is formed locally. Most water flows into the country from Belarus, Romania and the Russian Federation (hereafter “Russia”). As such, water stress (defined as the ratio of abstracted water to renewable water resources) in 2018 was 18.8% (locally formed resources only) and 5.2% (all water resources). Per capita freshwater abstraction in 2018 was 253 cubic metres (m³).

Ukraine faces water quality challenges caused by the discharge of untreated and insufficiently treated wastewater into water bodies [Figure 4.1(c)]. Urban treatment plants, which lack tertiary treatment facilities, have inadequate capacity and poor working conditions. In addition, rural areas have low access to sewerage (European Environment Agency, 2020[2]).

While Ukraine has consistently increased access to WSS services, access is still far from universal [Figure 4.1 (d)]. By 2030, Ukraine aims to overcome inequalities in access to water and sanitation. It aims to guarantee a social minimum of water (a certain number of litres per person per day) for drinking and sanitation purposes regardless of place of residence (rural or urban).

In accordance with international norms, Ukraine is required to pass legislation by 2025 that guarantees equal rights to water and sanitation. Water policy measures would follow to implement the legislation. By 2025, ensuring the right to drinking water and sanitation is likely to be considered as a priority for financing in the budgets of all levels (national-regional-local). Co-financing and attracting investment in the development of the water supply and sewerage sector and wastewater treatment will be required.

Figure 4.1. Water use in Ukraine

Source: State Statistics of Ukraine (2020[3]), Environment of Ukraine 2019, State Statistics of Ukraine, https://ukrstat.org/uk/druk/publicat/kat_u/2020/zb/11/Dovk_19.pdf; State Statistics of Ukraine (State Statistics of Ukraine, 2017[4]), Enviroment of Ukraine 2016, State Statistics of Ukraine, https://ukrstat.org/uk/druk/publicat/Arhiv_u/07/Arch_dov_zb.htm.

4.1.1.2. Ukraine’s water resources and river basins

According to multi-year observations, the potential water resources of Ukrainian rivers amount to over 209.8 cubic kilometres (km³), only 25% (52.4 km³) of which are formed on the territory of Ukraine. The remainder (157.4 km³) enters Ukraine from neighbouring countries, particularly Belarus and Russia. Projected resources of underground waters not connected to surface waters are 61.7 million m³ per day, and their extraction volume is about 3.3 million m³/day. Additionally, some sectors of the Ukrainian economy use about 1 km³/day of marine water.

Ukraine’s water resources are unevenly distributed across the country's territory due to climate conditions, topography and the geological structure of nine individual river basin districts. Five empty into the Black Sea (the Dnieper River Basin, the Dniester River Basin, the Danube River Basin, the area of the Southern Bug River Basin, the Black Sea River Basin). Two empty into the Sea of Azov (the Don River Basin, the Priazovya River Basin). One empties into the Baltic Sea (the Vistula River Basin). Finally, one enters into both the Black Sea and Sea of Azov (the Crimean River Basin District).

The southern regions of Ukraine, where most agricultural and industrial water users are concentrated, suffer from water stress and insecurity. These regions rely on the Dnieper River for all their water resources. The Dnieper makes up 80% of all water resources in Ukraine, supplying drinking water to two-thirds of the country’s population.

Ukraine has built more than 1 160 reservoirs with a cumulative volume of about 55 km³ to improve water supply. These include the Kremenchukske and Kahovske reservoirs (part of the cascade of Dnieper reservoirs), which rank among the largest in the world with surface areas of 2.23 thousand km² and 2.15 thousand km² respectively. Ukraine also has an extensive network of canals (over 1 000 km) and water supply systems (over 2 000 km). This makes it possible to redistribute annually 3‑12 km³ of fresh water, respectively.

The long-term change in the hydrological regime has been pronounced in Ukraine over the last 20 years, leading to the shallowing and further disappearance of small rivers and streams. This problem is especially urgent for small rivers. Due to intensive agricultural activity, their run-off in the forest-steppe zone and in Polissya (a region in the country’s north, primarily in the Pripyat River Basin, a sub-basin of the Dnieper River Basin District – see below) has decreased by 5% and in the steppe by 10%.

In some parts of the steppe zone, the volume of run-off decreased by 40%; in Polissya, it decreased by 15-20%. A considerable number of small rivers has been lost over the decades following independence. Although lack of data prevents exact quantification of these losses, evidence from the Dnieper River suggests the cumulative impact of decreased run-off from small rivers is considerable. Over the past three years, the Dnieper’s run-off decreased by 11 km³ according to measurements taken at the city of Kherson, on the Black Sea at the mouth of the Dnieper River.

Along with the significant climate change impact, other root causes of the negative impact on the hydrological regime include the following:

• high agricultural use of lands, especially in southern regions, and improper agricultural practices, including violations of water protection zones, ploughing of agricultural lands near the water edge of small rivers, burning and cutting of reeds and other coastal vegetation, and so on

• high water capacity of industrial and agricultural production

• systematic violations and failures in complying with legislation on water protection strips

• lack of clarity in the definition and application of the ecological water flow

• artificial modification of hydromorphological characteristics, which is straightening riverbeds, silting, shallowing and further disappearing water streams

• lack of funds and works, as well as lack of political will on the appropriate restoration of hydromorphological characteristics, including repair and restoration of hydraulic constructions that are important in the hydrological regime regulation (e.g. a flood in Western Ukraine in 2020 destroyed water dams everywhere).

4.1.1.2.1. River basin management plans

River basin management plans (RBMPs) in Ukraine are being developed to achieve specific environmental objectives for each of the nine river basin districts. The Ministry of Environmental Protection and Natural Resources and the State Water Agency are carrying out measures for the development of the plans and their implementation. Updates are foreseen every six years. All basins seek to achieve and maintain “good” ecological status of surface water and groundwater bodies, and “good” ecological potential of artificial or significantly altered surface water bodies. The plans are developed by the State Water Agency together with the State Agency for Geodesy, central and local executive bodies, local governments and other stakeholders; they also consider decisions of the relevant basin councils. To date, RBMP implementation has begun only on the Dnieper River Basin.

The Dnieper River Basin Management Plan

The Dnieper Basin is the largest in Ukraine, covering twice the total land area covered by the other eight basins. It is thus divided into four smaller sub-basins, each with its own RBMP. Input at the local level helped determine how the ecosystems interact with human activities in each sub-basin and measures needed to develop each one sustainably. The plan was prepared in accordance with European requirements and developed based on best practice for implementation of the WFD. Plans contain a general description of the river basin, analysis of anthropogenic impacts and protected areas, environmental objectives and an economic analysis of water use within the basin. The plan’s next cycle is expected to be supplemented by assessments of water monitoring results, further building a Programme of Measures (PoM) to achieve the relevant environmental objectives of the basin. The plan will serve as the basis for other RBMPs in Ukraine that are in development.

4.1.1.2.2. Water management issues and pressures in Ukraine’s river basin districts

Key water management issues within the Dnieper River Basin relate principally to problems with pollution. They require management interventions to align with the WFD in the following areas:

• insufficient or absent wastewater treatment resulting in organic and nutrient pollution

• pollution from hazardous substances, particularly from the wastewaters of industrial and municipal enterprises, and pesticides, among others

• hydromorphological changes throughout the basin, which influence flood protection, hydropower, flow regulation and riverbed straightening

• insufficient data to determine the ecological status of water bodies, which means experts designate risk (EUWI+, 2020[5]).

Aligning with the WFD’s environmental objectives means achieving “good” rating for ecological/chemical status of surface water bodies; ecological potential and chemical status of heavily modified and artificial water bodies; and chemical or quantitative status of groundwater bodies. Based on these objectives, the Dnieper RBMP identified more specific environmental objectives drawing on the delineation categories for water bodies within the basin (see Table 4.2).

Table 4.2. Environmental objectives of the Dnieper RBMP

Status of the water body in 2015	Environmental objective
Water bodies deemed as “high” or “good” status.	Maintaining the water status across all planning cycles up to 2032 and beyond.
Water bodies that are either at risk of failing the environmental objectives in 2015 or in moderate status in 2015.	By 2021, having Water Framework Directive compliant status assessment in place or achieving a “good” status by 2021.
Water bodies that are either at risk of failing the environmental objectives in 2015 or in poor status in 2015.	By 2021, having Water Framework Directive compliant status assessment in place or achieving a “good” status by 2027.
Water bodies that are either at risk of failing the environmental objectives in 2015 or in bad status in 2015.	By 2021, having Water Framework Directive compliant status assessment in place or achieving a “moderate” status by 2021, achieving a “moderate” or “good” status by 2027, or certainly achieving a “good status” by 2033.

Source: Information in this table was obtained from UNENGO ‘MAMA-86’ (2015[6]), Draft River Basin Management Plan for the Upper Dnieper Pilot Basin of Ukraine, http://blacksea-riverbasins.net/sites/default/files/RBMP_Upper%20Dnieper_UA_EN_final_1.pdf

4.1.1.2.3. Programme of measures

The PoM identifies actions that will help meet the environmental objectives set in the RBMP. Table 4.3 describes the major issues in the Dnieper River Basin and the aligned measures that contribute to overcoming them.

Table 4.3. Programme of measures in the Dnieper RBMP: Achieving the environmental objectives

Environmental issues	Programme of measures
Untreated wastewater causes organic and chemical pollution.	Harmonising legislation with the EU Urban Waste Water Directive. Making technical investments align wastewater systems with compliance stipulations in the directive. Progressively introducing mechanisms to encourage adoption of best available technologies relevant to the industry.
Mineral fertilisers from agriculture result in nutrient pollution.	Harmonising legislation with the EU Nitrates Directive. Adopting good agricultural practices. Developing action plans for vulnerable zones.
Hydromorphological changes from engineering projects can disrupt natural flow regimes and ecosystems.	Creating an inventory of all artificial changes to water bodies. Optimising the number of reservoirs, rivers’ water balances and the number of gates regulating water levels.
Agricultural run-off can contain dangerous industrial substances and pesticides contaminating surface waters.	Introducing technologies to ensure the environmentally safe storage of hazardous pollutants, including banned and obsolete pesticides. Designing a water monitoring system to help identify and eliminate polluting sites.
Improperly sealed cesspools and septic tanks in areas where municipal sanitation services are lacking. Leaking contaminates surface water and groundwater, leading to health hazards.	Developing community and individual sanitation systems. Installing watertight storage tanks. Setting up protection zones around drinking water sources.

Source: Information in this table was obtained from the Regional Environmental Centre for Central and Eastern Europe (2016[7]), Upper Dnieper River Basin: Draft River Management Plan, http://documents.rec.org/publications/4_UpperDnieper_Eng.pdf

4.1.2. Ukraine’s policy, legal and institutional framework

The legal, regulatory, policy and institutional environment in Ukraine is becoming more robust in terms of alignment with the WFD. However, major pieces of legislation delegate responsibilities to sub-legal and normative-legal acts, creating inefficiencies in the legal system. Further, issues with corruption can obstruct effective management across regulations, policies and institutions. Streamlining and clarifying roles and responsibilities of water management actors and establishing long-term policy objectives would help align and strengthen water management direction within Ukraine and in relation to the WFD.

4.1.2.1. Policy framework

Broadly, Ukrainian water policy can be seen through two interconnected “policy avenues”. The first revolves around the rational use of water resources and quantitative restoration. The second focuses on quality aspects combating and preventing pollution.

Until 2020, the Law of Ukraine "On basic principles (strategy) of the environmental policy of Ukraine till to 2020" served as the main prerequisite for obtaining EU Sectoral Budget Support. The strategy proposed strategic objectives including: introducing integrated water resource management (IWRM) according to river basin principles; reconstructing existing and constructing new municipal treatment plants; developing and implementing a PoM to reduce pollution of inland waters and the territorial seas; and ensuring compliance with regulatory requirements.

In 2020, the Ministry of Ecology and Natural Resources developed the Law of Ukraine "On basic principles (strategy) of the state environmental policy of Ukraine till to 2030". This stipulates water management objectives, including the following:

• ensuring the clear division of responsibilities in the field of environmental protection at the state, regional and local levels

• implementing principles of good environmental governance

• maintaining a permanent dialogue with stakeholders in strategic decision making

• strengthening institutional capacity for planning, monitoring and evaluating the effectiveness of environmental policy implementation

• strengthening capacity of environmental governance in conducting comprehensive environmental monitoring and state control in the field of environmental protection, rational use, reproduction and protection of natural resources

• defining functions on environmental protection and economic activity related to the use of natural resources.

These objectives more closely align Ukrainian and EU policy objectives. They have been further specified and reformulated in the draft Strategy for the Development of Water Policy of Ukraine till 2050. The Cabinet of Ministers is reviewing the draft strategy. In 2022, it will also review a draft Strategy of Maritime Environmental Policy of Ukraine till 2032.

Besides these draft strategies, Ukraine has developed the Concept of Water Sector Reform. This aims chiefly to establish a national water market. However, it also separates the economic functions of water service supply from state water governance. In addition, it establishes the National Water Council to undertake both guidance and supervision on the preparation and implementation of RBMPs and to regulate water tariffs for irrigation. Long term, it aims to do the following:

• Ensure equal access of the population to safe water and proper sanitation.

• Achieve and maintain the “good” ecological status of surface water bodies; ecological potential of artificial or significantly altered surface water bodies; quantitative and qualitative groundwater conditions; and ecological status of coastal and sea waters.

• Ensure water efficiency and the required amount of quality water resources for restoration of aquatic ecosystems and achieving sustainable abstraction and supply of fresh water for the needs of the population.

• Manage and minimise growing water risks of extreme floods, floods and droughts, as well as risks to human health related to lack of adequate access to safe water and sanitation.

• Introduce IWRM according to basin principles and achieve proper environmental governance in the districts of river basins, coastal and sea waters.

The uptake of the draft strategy and the Concept of Water Sector Reforming depends on the stability of the Ministry of Environmental Protection and Natural Resources, and funding.

Another key policy document is the National Action Plan for 2020-25. The plan was adopted in January 2020 and supports the preparation process for implementing the Strategy of the State Environmental Policy of Ukraine till to 2030. Its two stages (2020-25 and 2026-30) will be evaluated against indicators outlined in the strategy. An assessment of its predecessor is in preparation.

4.1.2.2. Legal framework

Ukraine’s natural resources are public property, with the rights of Ukrainian people being exercised by state bodies and local governments within limits defined by the Constitution and other laws. The Water Code of Ukraine (2002) is the main piece of legislation driving Ukrainian water management. Updates to the Code in 2017 aligned large parts of legislation with EU directives.

Ukraine’s Water Code legislates all types of water bodies including surface, underground and marine waters. In 2017, changes to the Code, in accordance with the WFD, defined legal provisions for moving towards IWRM. They also further established basin principles for water resource management. The main improvements relate to defining river basin districts and establishing river basin councils and procedures for RBMP development.

Table 4.4. Key legislation for water management in Ukraine

Legislation and relevant information	Stipulations
Water Code of Ukraine No.213/95-VR (1995)	Ensures the conservation and rational use of water. Stipulates measures for the restoration of water resources. Details measures for the protection of waters from pollution, littering and exhaustion. Details measures for the prevention of harmful effects of water and elimination of their effects. Outlines the status of water bodies. Classifies water users based on consumption. Protects the rights of businesses, institutions, organisations and citizens to water use. Outlines permits for special water use. Establishes water quality standards. Establishes norms and limits for technological regulation (water permits). Establishes maximum permissible pollutants’ discharge. Addresses the responsibilities of relevant authorities and clarifies approaches to RBMP development. Sets standards for environmentally safe water use. Sets water quality ecological standards for surface and underground water bodies.
Law of Ukraine “on drinking water, drinking water supply, and wastewater drainage” (2017)	Stipulates the constitutional requirement to provide drinking water in the necessary amounts and in accordance with established norms and standards. Determines drinking water quality standards. Provides guidelines for receiving wastewaters in centralised sewage systems, including stipulating penalties for exceeding norms. Provides criteria for defining vulnerable and less vulnerable zones. Stipulates licence conditions for economic activities in centralised water supply and drainage.
Law of Ukraine No. 1264-XII on environmental protection (1991)	Delegates environmental responsibilities to other sub-legal and normative acts. Defines relationships in the sphere of environmental protection. Regulates the sphere of natural resources protection, use and management. Established environmental monitoring and control, natural resources registers, environmental accounting, standardisation and environmental norms, and economic management mechanisms. Ensures ecological safety. Prevents negative environmental impacts of economic and other activities. Conserves natural resources. The law is supported by Land, Water, Subsoil, Forest Codes of Ukraine, the Tax Code containing economic instruments of natural resources regulation, Laws on the Protection of atmospheric air and Protection of Lands, Laws of Ukraine on the plant world and the animal world, Law on Natural Reserved Fund of Ukraine, Law on Wastes and other legal acts. Shortcomings include: Requires further development or renewal in terms of compliance. Requires clearer identification of the legal status of water protective strips and zones.
Subsoil Code (No.132/94-VR of 1994)	Mostly details general provisions on soil and deposits, stock and exposure of minerals. Considers underground water as a mineral resource. Contains some provisions for the protection of underground waters. The Code is under revision.
Law of Ukraine "on Environmental Impact Assessment" No. 2059-VIII (2017)	Implements the EU Directive "On the Assessment of the Effects of Certain Public and Private Projects on the Environment". Stipulates requirements for planned activities that interfere with the natural environment. Establishes legal and organisational principles for environmental impact assessments. Outlines rational use and reproduction of natural resources. Stipulates processes of decision making related to economic activities that can have significant environmental impacts.
The Law of Ukraine “About the statement of the National target program of development of water management and ecological improvement of the basin of the river Dnieper for the period till 2021” (2013)	Approves the national target programme. Stipulates provision of information to provide to ensure implementation of the programme.
The Law of Ukraine "On Organisations of Water Users and Stimulation of Hydraulic Land Reclamation" (in preparation)	Will define conditions for the establishment and operation of water user associations regarding the joint use and maintenance of reclamation engineering infrastructure facilities. Will regulate relations between water users, primarily farmers, who use reclamation infrastructure and establish clear rules that allow investing in the development and modernisation of reclamation infrastructure. Introduces the concept of water user organisations as non-profit entities that ensure operation and maintenance of the reclamation system and provide water users with water for hydraulic reclamation.
The Law of Ukraine "On main principles (strategy) of the state environmental policy of Ukraine till 2030"	Approves the main principles (strategy) of the state environmental policy of Ukraine for the period till 2030. Stipulates reporting requirements for the strategy.

Source: Author’s own elaboration.

Because Ukrainian legislation was developed according to former Soviet practices, it does not generally include specifics on action. These are typically delegated to lower legislative levels such as sub-legal and normative legal acts. Although high-level legislation may outline effective water management, subsequent lower-level legislation may thus distort or counteract its effectiveness.

4.1.2.3. Regulatory framework

The following table considers the major regulatory acts that govern water sector management.

Table 4.5. Key water management regulation in Ukraine

Regulation	Stipulations and shortcomings
Decision of the Cabinet of Ministers of Ukraine # 413 "On adoption of the Guidelines for development of normative on limit permissible discharge of pollutants into water bodies and a list of pollutants discharged into water bodies is regulated" (1996)	Allows limits to be prepared by polluters and approved with the departments on environmental protection of oblasts’ state administrations. Stipulates how limits should be calculated.
Decision of the Cabinet of Ministers of Ukraine # 336 "On adoption of the Guidelines for development of the river basin management plan" (2017)	Provides sub-orders for the Ministry of Ecology and Natural Resources of Ukraine to: identify sub-basins and water management areas within the established river basin districts approve methodologies for defining surface and underground water bodies approve methodology for assigning classes of ecological and chemical states to surface water bodies.
Decision of the Cabinet of Ministers of Ukraine # 758 "On adoption of the Guidelines for carrying out the state water monitoring" (2018)	Stipulates orders approving sectoral water monitoring programmes of the State Water Resources Agency, the Public Service on Geology and Subsoil and the Public Service of Emergency Situations (Service of Hydrometeorology). Provides sub-orders for the Ministry of Ecology and Natural Resources to approve the list of pollutants for determining chemical statuses of surface water and groundwater bodies and the ecological potential of artificial or substantially modified surface water bodies.
Decision of the Cabinet of Ministers of Ukraine # 321 "On adoption of the Guidelines for issuing the permit for special water use" (2002)	Provides sub-orders for approving the form of permits for special water use and forms of normative calculation of water use and wastewater discharge and methods for issuing permits for special water use.
Decision of the Cabinet of Ministers of Ukraine # 247 "On adoption of the Guidelines for development of the flooding risks management plan" (2018)	Provides sub-orders for approving the methodology for assessing flooding risks and for developing maps of flooding threats and risks.
Decision of the Cabinet of Ministers of Ukraine # 1107 "On approval of Guidelines for development and adoption of standards for drinking water supply (2004).	Provides sub-orders on approving state sanitary norms and rules and on guidelines for the development and approval of technological norms of drinking water use by enterprises that provide services of centralised water supply and/or drainage.

There are opportunities for strengthening Ukrainian regulation both in terms of its implementation. The effectiveness of Ukrainian water regulation is hindered by the wording of the regulation with multiple possible interpretations. This causes misunderstandings between central and local approaches to regulation implementation and impedes the overall effectiveness of the regulation.

4.1.2.4. Institutional framework

Table 4.6. Water institutional bodies and arrangements in Ukraine

Institution	Sub-bodies and agencies	Water-related functions
Ministry of Environment Protection and Natural Resources	Central apparatus: Department of Protection of Land and Water Resources. Since 2012, territorial bodies have been dismantled. Natural Reserve Fund.	Institutional body responsible for implementing the Water Framework Directive, 2000/60/EC and the Marine Strategy Framework Directive, 2008/56/EC. Formulates water policy, including approaches for: RBMP development and implementation delegating water permits water monitoring. Establishes environmental water standards. Proposes new approaches for water pricing and water pollution (to be accepted by other ministries and adopted by the Cabinet of Ministers of Ukraine). Developed the Automatic Information System (AIS), which manages data and information on air quality and water resources, and provides information services to display financial information on environmental issues, including water resources. Produces the annual National Report on the State of Environment in Ukraine. However, the National Report has a five-year delay and is only available up to 2015. The Natural Reserve Fund does not relate to water management directly, although it provides protection over land and water regions. There is some crossover between the Fund’s objectives and those of RBMPs.
State Agency of Water Resources The 13 river basin councils (RBCs) were established as advisory bodies to SAWR and MEPNR. Interagency co‑ordination body led by SAWR: Interagency commission on the regulation of work regimes of reservoirs of Dnieper and Dniester rivers.	Central Apparatus: Department for water management. 22 oblast sub-divisions (sectors) 12 basin departments on water management 14 regional offices 4 departments managing water channels.	The central apparatus implements water policy for surface freshwater bodies, including: water permits water monitoring water reporting and accounting support for water cadastres water transporting irrigation and drainage services. Oblast sub-divisions represent SAWR at the oblast level, including issuing water permits, providing administrative services and other functions in the use and protection of water resources. Basin departments develop RBMPs; co‑ordinate work of RBCs and regional offices; monitor water, develop water economy balances, inter-basins water distribution and transboundary co‑operation; and co‑ordinate water reporting and accounting. Regional offices provide water for industry and agriculture, and manage the engineering and amelioration of state infrastructure. Water channel departments transport and distribute water between and within basins.
State Ecological Inspection (SEI) In the process of reform.	Central apparatus: Division of the state supervision on water ecosystems and resources. 17 oblast level territorial inspections, 1 marine inspection and 5 interregional (district) inspections.	Implements environmental and water policy related to legislation compliance including supervision of water use and water pollution.
Public Service on Geology and Subsoil (PSGS) In the process of reform.	Central apparatus: Department of geology; Division of hydrogeology and eco-geology 6 territorial inspections. 15 state enterprises.	Implements geology and subsoil sector policy. Explores and assesses underground water resources, underground water monitoring, and water use accounting. Supports groundwater cadastres. Territorial inspections monitor compliance to special permit for subsoil minerals use. State enterprises: monitors groundwater provide geological exploration of underground water resources, their mapping, and assessment. Manages water drilling.
State Agency of Forest Resources	Central apparatus 24 territorial bodies at the oblast level.	Implements state forest policy. Does not manage water directly; however, RBMP considers forest management as an important component of river basin management.
National Commission regulating in the sphere of Energy and Communal Services		Defines tariffs for centralised drinking water supply and wastewater drainage through centralised sewage networks. Defined tariffs for the 52 Vodokanals of Ukraine.
Ministry of Development of Communities and Territories	Central apparatus: Department of communal services; Division of water supply and drainage economy No subordinate territorial bodies.	Institutional body responsible for implementing the Urban Waste Water Treatment Directive, 91/271/EC. Formulates state policy in the sector of drinking water supply and wastewater drainage. Provides legal, normative, methodological and scientific guidance under the Vodokanals' work. Defines requirements for enterprises discharging wastewater into centralised municipal sewage networks. Issues the annual National Report on the Drinking Water Quality and the State of Drinking Water Supply in Ukraine reflecting the state of water resources in centralised drinking water supply. The report is up to date until 2018.
Ministry of Economic, Trade and Agrarian Development	Two central apparatuses: Directorate of Agrarian Sector Development and Agrarian Policy Department of Regulatory Policy and Entrepreneurship.	Institutional body responsible for implementing the Nitrates Directive, 91/676/EC. Note: since 2018, the responsibility for implementation of the EU Nitrate Directive passed between three ministries. This has impeded progress in approving draft methodologies for assessing zones vulnerable to nitrate compounds and best agricultural practices. Thus, regulation for diffuse pollution has experienced slow progression. The directorate: formulates policy for the agrarian sector's development defines zones vulnerable to nitrate compounds formulates best agricultural practices. The Department of Regulatory Policy and Entrepreneurship formulates policy for market supervision of food quality (drinking water) and non-food products (the content of orthophosphates in washing detergents).
Ministry of Internal Affairs	Central apparatus: Directorate of Civil Protection, Prevention of Emergencies and Elimination of their Consequences.	Institutional body responsible for implementing the Floods Directive, 2007/60/EC with the State Service on Extraordinary Situations. Formulates state policy on civil protection, prevention of emergencies and elimination of their consequences.
State Service on Emergency Situations	Two central apparatuses: Department of Prevention of Extraordinary Situations Department of Hydrometeorology Ukrainian Hydrometeorological Centre, which includes 27 territorial bodies at the oblast level (3 observatories of interregional importance).	Institutional body responsible for implementing the Floods Directive, 2007/60/EC with the Ministry of Internal Affairs. Central apparatuses: provide flood risk management monitor environment (air, surface water, marine waters, soils). The Hydrometeorological Centre undertakes environmental monitoring (air, surface water, marine waters, soils).
Ministry of Health Care	Central apparatus: Directorate of Public Health Public Health Centre of the Ministry of Health Care.	Institutional body responsible for implementing the Drinking Water Directive 98/83/EC. Formulates state policy in health care, provides sanitary and hygienic supervision. The Public Health Centre: carries out functions of the main scientific-research and the scientific-methodological institution of the ministry concerning hygienic and microbiological problems caused by the state of the environment (water). Provides hygienic monitoring of natural waters (surface, underground and marine).

Source: Author’s own elaboration

Shortcomings hindering robust water management from an institutional standpoint include the following:

• Imposing clear roles and responsibilities in practice: Roles and responsibilities are clearly defined but tend to shift, particularly regarding RBMPs and environmental objectives.

• Lack of data exchange between authorities, particularly those responsible for water monitoring: Monitoring issues were once resolved by signing “regalements” dictating exchanges of information between monitoring institutions. However, regalements were inefficient as they had no continuity or longevity. Regalements have now ceased.

4.2. Next steps: Scenarios for reform

Three scenarios reflect the possibilities for alignment to the WFD. The baseline scenario reflects the current situation and efforts; the business-as-usual scenario envisages minimal alignment efforts; and the future scenario foresees a consolidated effort for achieving alignment.

Unsurprisingly, the future scenario yields the best results in relation to alignment. However, there are risks and challenges associated with each scenario. In all cases, corruption poses challenges to the transparent and efficient implementation and functioning of measures. The socio-economic situation underpinning each scenario will strongly depend on the war in the East of Ukraine. Table 4.7 provides an overview of each scenario and their alignment possibilities, while Table 4.8 compares scenarios and their activities.

4.2.1. Scenarios

4.2.1.1. The baseline scenario

The baseline scenario is developed based on the current proceedings and alignment efforts with the EU directives. In this sense, foundations for alignment exist, although there are various issues that hinder and delay alignment beyond 2030.

Issues with the baseline scenario include the following:

• changing and unstable roles and responsibilities within the Ministry of Environmental Protection and Natural Resources,

• lack of specific responsibilities assigned to agencies implementing RBMPs and lack of laws to govern procedure,

• unstable and weak financing for RBMPs and tariffs for water use, and low appetite for increasing water tariffs,

• delays in implementation due to low prioritisation of water and environmentally related issues.

4.2.1.2. The future scenario

In the future scenario, Ukraine will ensure efficient water resource and environmental management nationally by 2030 by developing and implementing institutional and legal reforms in 2024. However, the development of the scenario depends on the availability of strategic policy documents. In this scenario, amendments to the Water Code will provide a solid base for the WFD’s provisions. Further, it will develop an appropriate organisational structure for integrated water resources management at both central and basin levels.

The future scenario is generally well aligned with the WFD. However, risks and challenges may slow down or impede full alignment. These include the following:

• lack of specific responsibilities assigned to agencies implementing RBMPs and lack of laws to govern procedure,

• failure to identify an agency as competent for achieving or maintaining the “good” ecological status of surface bodies and “good” chemical status of groundwater bodies,

• lack of full cost-recovery mechanisms for water and ecosystem services,

• lack of definition for financial mechanisms for RBMP implementation,

• lack of a system for managing growing risks, including floods, droughts and human health risks related to inadequate access to safe water and sanitation,

• risks that the ecological consciousness of Ukrainian citizens and territorial communities are insufficiently developed for addressing water management issues.

4.2.1.3. The business-as-usual scenario

The business-as-usual scenario presumes only marginal alignment with the WFD. The scenario foresees relatively long periods of political uncertainty in the post-election period. This is projected to obstruct robust water management. Within the scenario, gross domestic product is predicted to increase two-fold by increasing state budgets for water management and the environment. Although financing for water protection measures will approximately double in this scenario, this funding will not be enough to establish the nine RBMPs.

Potential risks in this scenario include the following:

• the required co‑operation with Russia and Belarus due to agreements of the State Water Agency on protection and use of transboundary watercourses, which makes progress more difficult,

• likely political instability leading to the absence of environmental ministers and political decisions oriented towards environmental and water resource protection between 2000-21 and 2024-25,

• alignment with EU directives dependent on elected politicians and not on the system’s functioning,

• priorities within the federal budget leading to spending cuts on environmental protection,

• integration of some strategies depending on others, hindering full implementation of some EU directives

• low priority for government of the National Water Council,

• control of basin councils by the State Agency of Water Resources, which prevents them from organising funds independently and implementing RBMPs,

• conflict zones preventing nation-wide implementation of EU directives,

• weak funding mechanisms for RBMPs that may possibly hamper success.

Table 4.7. Alignment of each scenario to the EU framework directives

Main policy issues	Description of characteristic features and differences
	Baseline scenario	Business-as-usual scenario	Future state scenario
Adoption and implementation of Water Strategy and Marine Strategy	Both prepared by 2019 but not adopted due to unsustainable situation in the Ministry of Environmental Protection and Natural Resources. The Marine Strategy still requires the definition of Good Environmental Status descriptors.	Envisages Water Strategy adoption in 2022. A sustainable institutional basis will not be implemented due to lack of continuity in ministerial teams and lack of government understanding around the importance of water and environmental issues.	Envisages Water Strategy adoption in 2021. It will be reflected in RBMPs and relatively successfully implemented thanks to the growing global importance of water resources in combating climate change and the government's awareness of this situation.
		There are no differences between two scenarios concerning the Marine Strategy. This is due to the uncertainty around the status of the territorial Black Sea in connection with the annexation of the Autonomous Republic of Crimea by Russia and the consequential unpredictable policy and behaviour in the Sea of Azov region. It is expected that Good Environmental Statuses will be defined in the framework of the EMBLAS III project until 2023. It is envisaged the Marine Strategy will be adopted in 2024, and the Marine National Action Plan (NAP) prepared and adopted in 2025. However, NAP implementation will be complicated due to the unclear juridical status of the Black and Azov Seas. The Marine Strategy Framework Directive doesn't consider the Azov Sea within EU jurisdiction. It is unclear whether Ukraine’s National Marine Strategy will consider both Black and Azov Seas or pay attention to the Black Sea only.
Implementation of the Strategy on irrigation and drainage in Ukraine on the period till 2030	Adopted by the Cabinet of Ministers of Ukraine’s decisions #688 in 2019. The NAP, as the main implementation instrument, is in the final stages of preparation and acceptance.	Envisages NAP's adoption in 2021. The World Bank and the European Bank for Reconstruction and Development (EBRD) will not invest money until 2030 in the irrigation and drainage sector due to the unclear tariff situation. Implementation of the strategy will begin, thanks to national investments. However, it will be unstable and only partial.	Envisages NAP's adoption in 2021. The World Bank and the EBRD will consider the tariff situation as an acceptable risk thanks to land reforms. They may propose an investment portfolio for Ukraine in 2023/24. National investors will join the process, improving the investment environment.
Development of Organisations of Water Users	The draft Law "On organisations of water users (OWU)" is in the final stage of development. It should be proposed to stakeholders for discussion soon.	Envisages adoption in 2023/24. Will improve investment conditions for national investors. Inter-farm and internal farm irrigation and drainage structures and networks will be partly restored by 2030.	Envisages adoption in 2022. Will improve investment conditions for national investors. Inter-farm and internal farm irrigation, and drainage structures and networks will be restored by 2026.
Approximation to the Drinking Water Directive (98/83/EC) and its implementation, and implementation of SDG 6 (clean water and sanitation), SDG 14 (life below water) and SDG 15 (life on land).	The National Report "SDG: Ukraine" was prepared in 2015 and jointly adopted by the Cabinet of Ministers of Ukraine and the UNDP. Presidential Order #722 from 2019 envisages its implementation.	By 2030 implementation of: SDG 6 by up to 70% SDG 14 by 30% due to lack of institutional capacity in marine policy implementation. With respect to SDG 15, (reducing share of arable land), land will be reduced to 55%, falling short of required 47%.	By 2030 implementation of SDG 6 by more than 90% SDG 14 by 60% through the strengthening of institutional capacities in marine policy implementation. With respect to SDG 15 (reducing the share of arable land), land will be reduced to the required 47%.
Approximation to the Water Framework Directive (2000/60/EC) and its implementation	Despite successful approximation and implementation of most of the WFD, article 9 is still under question. Currently, cost recovery of water resources and services is not achievable.	Changes in social attitudes towards environment and water resources due to water shortages will lead to significant increases in water prices and prices for water pollution.	Environmental and economic revisions of water recourses and service pricing in alignment with the framework of National Water Policy Dialogue by 2024 will lead to a real increase of costs for first generation RBMP implementation.
Approximation to the Urban Wastewater Directive (91/271/EC) and its implementation	Delays due to the unpreparedness of the Ministry of Development of Communities and Territories and Vodokanals in meeting basic requirements.	No implementation by 2030. Potential partial and inconsistent implementation due to lack of financing for tertiary wastewater treatment initiatives and remaining problems with use of post-treatment sludge. These problems may be partially addressed in 2028-30.	Relative implementation success by 2030 thanks to establishment of a flexible finance policy for building tertiary wastewater treatment facilities, smart implementation of local treatments by enterprises, and proper regulation of post-treatment sludge use in the construction and agricultural sectors.
Approximation to the Nitrates Directive (91/676/EC) and its implementation	Delays due to lack of action of the Ministry of Economic, Trade and Agrarian Development.	Expected adoption by 2024 with developed definitions of zones vulnerable to the accumulation of nitrate compounds and the Code of the best agricultural practice. First generation RBMPs will use vulnerable zones as recommendations, though they are not legally defined.	Expected adoption by 2021-22 with developed definitions of zones vulnerable to the accumulation of nitrate compounds and the Code of the best agricultural practice. Vulnerable zones will be included in first generation RBMPs as the regulatory norms for implementation in agriculture production between 2025-30.
Approximation to the Floods Directive (2007/60/EC) and its implementation	Relative success under the auspices of the State Service on Extraordinary Situations. Guidance on the development of the Flood Risk Management Plan was adopted by the Cabinet of Ministers of Ukraine in decision #247 in 2018.	Envisages development and adoption of Flood Risk Management Plans for every river basin district by 2024. Due to delays in development and adoption of these plans, they will not be reflected in RBMPs (final plans should be prepared and adopted in August 2024).	Envisages the development and adoption of River Basin Flood Risk Management Plans by 2022. In June 2021, draft plans should be published on the State Service on Extraordinary Situations’ website and be reflected in every RBMP.

Source: Author’s own elaboration

Table 4.8. Comparative analysis of the proposed scenarios’ activities: Baseline scenario (BS), future scenario (FS) and business-as-usual scenario (BAU)

Objectives & measures	Responsible agencies, organisations	Scenarios
A. Formulation and implementation of policies, RBMPs and NAPs
Preparation and adoption of the Water Strategy	MEPNR, MDCT, METAD, Ministry of Internal Affairs, SAWR, PSGS, State Service on Emergency Situations, Oblast State Administrations	BS: financed through MEPRN's annual budget (under the budget line of “staff wages”).
Preparation and adoption of the Marine Environmental Strategy	MEPNR, Oblast State Administrations bordering seas	BS: financed through MEPRN's annual budget (under the budget line of “staff wages”).
Preparation of RBMPs	MEPNR, SAWR and its territorial bodies, RBCs	BS: financed through SAWR and its territorial bodies' annual budgets (under the budget line of “staff wages”).
Preparation and implementation of the NAP for the Marine Environmental Strategy	MENR, USCME, Oblast State Administrations bordering seas	BS: financed through MEPRN's annual budget (under the budget line of “staff wages”).
Preparation and adoption of Flood Risk Management Plans for each RBD	MIA, MEPNR, State Service on Emergency Situations, SAWR	BS: financed through SSES and its territorial bodies' annual budgets (under the budget line of “staff wages”).
Preparation of the national concept on drought risk management and respective NAPs for each RBD	MEPNR, METAD, Ministry of Internal Affairs, State Service on Emergency Situations, SAWR	BS: financed through MEPRN's annual budget (under the budget line of “staff wages”).
B. Finalisation of public water management institutional reforms
Establishment of the National Water Council	Cabinet of Ministers of Ukraine, MEPNR, Ministry of Finance	FS: biannual meetings (EUR 1 000 each) BAU: irregular meetings.
Strengthening the role of RBCs in decision making on RBMP preparation and implementation		FS: successful power transfers decrease the state budget and increases local governments' annual budgets. BAU: foresees delays power transfers and the continuation of the predominant funding of meetings by SAWR.
Establishing the National Joint Stock Company (NJSC) providing irrigation and drainage services	MEPNR, METAD, SAWR, Oblast State Administrations dealing with irrigation and drainage	FS: NJSC is established and is properly financed. BAU: NJSC is established but insufficiently financed.
Establishing Organisations of Water Users (OWU)	Related enterprises and organisations	FS: successful OWU formation involves an appropriate number of meetings. BAU: delays in OWU formation, thus, fewer meetings.
Establishing government institutions for marine environment protection	MEPNR, USCME, SEI, Oblast State Administrations bordering seas	FS: establishment of two state enterprises providing public management for the Black and Azov Seas, including monitoring labs; adequate financing from the state budget and possible increased international technical assistance. BaU: delays in establishment and unclear management situations; slight increase in state funding and same level of international technical assistance so the USCME can undertake functions of MEPNR.
Addressing groundwater management and monitoring issues Transferring functions from PSGS to SAWR	MEPNR, SAWR, PSGS	Possible redistribution of funds (between PSGS and SAWR) under existing budget programmes (at the expense of PSGS staff wages). FS: clear redistribution of responsibilities and transfer of groundwater management and monitoring to BDWR with appropriate transfer of financing from PSGS to SAWR BAU: delays in the transfer of functions and their duplication by territorial bodies without sufficient increase of financing.
C. Implementation of RBMPs
Building new and reconstructing existing municipal water treatment facilities	MEPNR, SAWR, PSGS (Investments Stabilisation State Fund) Local government bodies (as a possible part of the Investments Stabilisation State Fund)	BS: real (capital and current) expenditures of the sector. FS: UkrVodokanalEcology funding requirements for initial municipal reform BAU: state pressures on businesses lead to relative increase in finances derived from public investments.
Addressing the issues of industrial pollution, including the mining industry	Investments Stabilisation State Fund, local government bodies (as a possible part of Investments Stabilisation State Fund), related enterprises and organisations	BS: current (2020) industry needs for environmental investments. FS: real needs of industry (particularly the mining industry) in initial environmental investments. BAU: slightly improved situation – investments caused by public pressure.
Definition of zones vulnerable to nitrate compounds and application of best agricultural practices	Investments Stabilisation State Fund, local government bodies (as a possible part of the Investments Stabilisation State Fund), related enterprises and organisations	FS: requirements of agricultural businesses in initial environmental investments (not related to zones vulnerable to nitrate compounds). BAU: slight improvements from the current situation with investments resulting from public pressure.
Implementation of the state water monitoring programmes	MEPNR, SAWR, PSGS, State Service on Emergency Situations, State Agency on Exclusion Zone Management, local government bodies, other sources (investments), international donors	BS: 2019 financing of water monitoring (accounting for creation of two laboratories for SAWR). FS: financing requirements for renovation of 13 laboratories for SAWR, 11 laboratories for SESS and 2 marine laboratories for monitoring at minimum 70% of delineated water bodies. BAU: partly improved water monitoring situation thanks to international technical assistance and increased state budget expenses.
Implementation of the anti-flooding measures	SAWR, local government bodies related enterprises and organisations	BS: shows the current (2019) financing of the SAWR according to budgetary requests. FS: shows possible needs could arise in Flood Risk Management Plans by links with the National Target Program for the Protection of Population and Territories from Emergencies of Man-Made and Natural Character for 2013-17. BAU: shows slightly improved situation in addressing the problem.
Costs required for flood prevention and management	Hydromet Service of State Service on Emergency Situations, State Service on Emergency Situations	BS: expenditures spent on prevention, management and consequences of floods FS: possible needs, derived from the National Target Program for the Protection of Population and Territories from Emergencies of Man-Made and Natural Characteristics for 2013-17. BAU: only marginal improvements in flood prevention and management.
Protection of rural settlements and agricultural lands against harmful effects of water	SAWR, local governments (through agreements)	BS: real expenditures of the last two years (2019, 2020). FS: expected finances required wetlands drainage. BAU: worst-case scenario relative to FS due to delays in water strategy implementation.
Costs required for irrigation and drainage	SAWR and Investments Stabilisation Fund, related enterprises and organisations	BS: real expenditure from the last two years (2019, 2020). FS: investment needs, requested by the Strategy on irrigation and drainage in Ukraine till 2030 (adopted by the CMU). BAU: slightly worse situation relative to the FS due to delays in strategy implementation.
Costs required to minimise the effects of droughts	Hydromet Service of State Service on Emergency Situations, State Service on Emergency Situations, private investments from impacted businesses	BS: real expenditures spent on prevention and consequences of droughts (separate resolutions of the CMU on spending costs for dotation of agricultural business from the special reserve fund of CMU). FS: possible needs, with the National Action Plan for combating land degradation and desertification. BAU: only marginal improvements on the current situation.
D. Integrated water resources and water basin management
Scientific and applied research in integrated water resources management and staff training	SAWR	BS: real expenditure of the last two years (2019, 2020). FS: expected finances required for strengthening the water sector. BAU: worse-case scenario relative to the FS due to delays in water strategy implementation.
Protected areas	MEPNR	BS: real expenditure on maintenance of existing protected areas and creation of new ones. FS: finances required for protecting the area of 6 276.9 ha (current 4 082.2 ha). BAU: only slight improvements on the current situation.
Forestry	MEPNR and State Agency of Forest Resources	BS: real expenditures on maintenance of existing forests. FS: finances required increase the total area of forests from 16% to 20% of total land area. BAU: only slight improvements on the current situation.
Land policy	METAD and State GeoCadastr	BS: real expenditures on land withdrawal from agricultural circulation. FS: finances required to reduce the area of arable land from 53.9% to 47%. State budgets will need to compensate current landowners. BAU: only slight improvements on the current situation.

Note: MCTD = Ministry of Communities and Territorial Development; MEPNR = Ministry of Environment Protection and Natural Resources; METAD = Ministry of Economic, Trade and Agrarian Development; MIA = Ministry of Internal Affairs; SAWR = State Agency for Water Resources; SEI = State Environmental Inspectorate; USCME = Ukrainian Scientific Centre for Marine Environment.

Source: Author’s own elaboration

4.2.2. Financing each scenario

The following section offers an overview of the major costs associated with the scenarios and presents the respective additional costs. The business-as-usual and baseline scenarios do not differ significantly in terms of their required funding. However, the future scenario requires a significantly larger amount of funding, which corresponds with more thorough and timelier implementation. The future scenario also dedicates more resources to preparation and implementation of both RBMPs and IWRM.

Table 4.9 summarises the funding required to develop each scenario, as well as some costs related to forecasted natural disasters.

The State Fund for development of the water economy

The State Fund for development of the water economy was created by the Cabinet of Ministers of Ukraine in 2018. Funds support measures to develop and maintain water management and increase the efficiency of water use. The main administrator is the Ministry of Environmental Protection and Natural Resources with implementation by the State Agency of Water Resources.

The Fund for Environmental Protection

The Fund for Environmental Protection was created in the Law on Environmental Protection. The fund is derived from environmental taxes, and costs relating to recovered damages arising from the violation of environmental legislation. In 2014, the fund became a consolidated part of the state budget. In 2018, the fund of UAH 506 million was mainly used for the sustainable functioning of Exclusion Chornobyl Zone facilities. Other expenditures were directed towards environmental measures. Targeted use of the fund’s money is regulated by decisions of the Cabinet of Ministers of Ukraine in the resolution "on approval of the list of activities belonging to environmental ones". However, the resolution does not ensure proper use of the fund due to ambiguous wording and the possibility of multiple interpretations. Of the 85 environmental measures listed in the resolution, 17 relate to protection and rational use of water resources.

In addition to this fund, local governments have created a special fund out of environmental taxes for implementation of environmental measures. However, like the national fund, environmental measures are sometimes used for non-environmental purposes. This mars the efficacy and transparency of environmental protection, indicating the low priority of environmental issues for the current government.

Table 4.9. Financial requirements for each scenario, in thousands of euros per year

Objectives & measures	Financing sources	Responsible agencies, organisations	Scenarios (thousand EUR/year)
			Baseline	Future	Business-as-usual
TOTAL ANNUAL SPENDING FOR EACH SCENARIO (EUR 1 000)			2 087 474	23 121 867.6	4 130 207.5
A. Formulation and implementation of policies, RBMPs, and NAPs			94 275	123 720	95 400
Preparation and adoption of the Water Strategy	State budget	MEPNR, MDCT, METAD, Ministry of Internal Affairs, SAWR, PSGS, State Service on Emergency Situations, Oblast State Administrations (OSAs)	2 025	2 959	2 500
Preparation and adoption of the Marine Environmental Strategy	State budget	MEPNR, OSAs bordering seas	To be financed in MEPRN’s routine annual budget (as staff time)
Preparation of RBMPs	State budget	MEPNR, SAWR and its territorial bodies, RBCs	850	1 161	900
Preparation and implementation of the NAP for Marine Environmental Strategy	State budget	MENR, USCME, OSAs having access to seas	To be financed in MEPRN ‘s routine annual budget (at the expense of staff wages)
Preparation and adoption of Flood Risk Management Plans for each RBD	State budget	Ministry of Internal Affairs, MENPR, State Service on Emergency Situations, SAWR	91 400	119 600	92 000
Preparation of the National concept on drought risk management and respective NAPs for each RBD	State budget	MEPNR, METAD, Ministry of Internal Affairs, State Service on Emergency Situations, SAWR	Financed through MEPRN's annual budget (at the expense of staff wages)
B. Finalisation of institutional reforms in public water management			0	1 223.6	745.5
Establishment of the NWC	State budget	Cabinet of Ministers of Ukraine, MEPNR, Ministry of Finance	N/A	2	0.5
Strengthening the role of RBCs in decision making on RBMPs preparation and implementation	State budget	SAWR	Not yet possible	3	20
	Local budget	Local water management bodies		18	25
	Total	MEPNR, SAWR, PSGS and local water management bodies	N/A	21	25
Establishing the National Joint Stock Company (NJSC) providing irrigation and drainage services	State budget	MEPNR, METAD, SAWR, OSAs dealing with irrigation and drainage	Not yet established	250	200
Establishing Organisations of Water Users (OWU)	Related enterprises	Related enterprises and organisations	0	48	20
Establishing government institutions for marine environment protection	State budget	MEPNR, METAD, Ministry of Finance	159	543	250
	Possible international technical assistance	EU, GEF, UNDP	70	150	100
	Total	MEPNR, USCME, SEI, OSAs bordering seas	229	693	350
Addressing groundwater management and monitoring issues. Transferring functions from PSGS to SAWR	State budget	MEPNR, SAWR, PSGS	149	209.6	150
C. Implementation of RBMPs			1 974 325	15 555 151	4 012 705
C-1. Total expected costs required for liquidation of consequences of floods and droughts			151 000	70 400	109 500
C-2. Total expected losses caused by floods and droughts			242 100	85 700	252 750
Building new and reconstructing existing municipal water treatment facilities	State budget	MEPNR, SAWR, PSGS (Investments Stabilisation State Fund)	18 900	250 000	37 800
	Local budget	Local government bodies (as a possible part of the Investments Stabilisation State Fund)	56 700	750 000	114 000
	Related enterprises	Related enterprises and organisations	302 000	4 000 000	622 850
	Total		377 600	5 000 000	774 650
Addressing the issues of industrial pollution, including the mining industry	State budget	Investments Stabilisation State Fund	44 640	212 700	89 300
	Local budget	Local government bodies (as a possible part of Investments Stabilisation State Fund)	96 400	459 650	193 000
	Related enterprises	Related enterprises and organisations	1 287 480	6 135 000	2 580 000
	Total		1 428 520	6 807 350	2 862 300
Definition of zones vulnerable to nitrate compounds and application of best agricultural practices	State budget	Investments Stabilisation State Fund	N/A	15 000	500
	Local budget	Local government bodies (as a possible part of the Investments Stabilisation State Fund)		459 358	4 800
	Related enterprises	Related enterprises and organisations		2 884 643	96 155
	Total		0	3 359 000	101 455
Implementation of the state water monitoring programmes	State budget	MEPNR, SAWR, PSGS, State Service on Emergency Situations, State Agency for Exclusion Zone Management	490	5 600	1 200
	Local budget	Local government bodies	0	0	0
	Related enterprises	Other sources (investments)	0	0	0
	International technical assistance	International donors	400	800	400
	Total		890	6 400	1 600
Implementation of anti-flooding measures	State budget	SAWR	1 730	6 260	1 900
	Local budget	Local government bodies	Data n/a	Data n/a	Data n/a
	Related enterprises	Related enterprises and organisations	Data n/a	Data n/a	Data n/a
	Total		1 730	6 260	1 900
Costs required for flood prevention and management	State budget	Hydromet Service of State Service on Emergency Situations	3 500	9 500	3 700
	Total expected losses	Losses caused by floods	17 100	5 700	42 750
	State budget - Special reserve fund of Cabinet of Ministers of Ukraine	State Service on Emergency Situations	11 000	4 100	27 100
	Total		14 500	13 600	30 800
Protection of rural settlements and agricultural lands against harmful effects of water	State budget	SAWR	8 840	5 400	7 100
	Local budget	Local governments (through agreements)	5 390	3 290	4 200
	Total		14 230	8 690	11 300
Costs required for irrigation and drainage	State budget	SAWR and Investments Stabilisation Fund	70	3 050	3 000
	Local budget	As sources to Investments Stabilisation Fund	50	14 000	7 000
	Related enterprises	Related enterprises and organisations	235	280 000	140 000
	Total		355	297 050	150 000
Costs required to minimise the effects of droughts	State budget	Prevention: Hydromet Service of State Service on Emergency Situations	3 500	9 500	3 700
	Total expected losses	Losses caused by droughts	225 000	80 000	210 000
	State budget: the special reserve fund of CMU	State Service on Emergency Situations, private investments from impacted businesses	133 000	47 300	75 000
	Total		136 500	56 800	78 700
D. Integrated water resources and water basin management			18 874	7 441 773	21 357
Scientific and applied research in integrated water resources management and staff training	State budget	SAWR	237	1 040	340
Protected areas	State budget	MEPNR	16.7	33	17
Forestry	State budget	MEPNR and State Agency on Forestry Resources	17 800	28 000	20 000
Land policy	State budget	METAD and State GeoCadastr	820	7 412 700	1 000

Note: GEF = Global Environment Facility; METAD = Ministry of Economic, Trade and Agrarian Development; MEPNR = Ministry of Environment Protection and Natural Resources; PSGS =Public Service on Geology and Subsoil; RBD = river basin district; SAWR = State Agency for Water Resources; SEI = State Environmental Inspection USCME = Ukrainian Scientific Centre for Marine Environment; UNDP = United Nations Development Programme.

Source: Author’s calculations.

4.2.3. Progress monitoring indicators

The progress monitoring indicators in water resource management and alignment with EU water directives show potential for improvement. In 2011, Ukraine developed and adopted indicators measuring the implementation of the Water Protocol of the Water Convention. According to international obligations, the Water Protocol indicators were revised in 2019; this work was performed under the auspices of UNECE in the framework of the EUWI+ Project. The indicators are waiting for approval. Some of the proposed indicators in encompass the SMART elements required for successful monitoring and evaluation (i.e. Specific, Measurable, Achievable, Realistic and Timely). However, in other cases, indicators such as “the degree of implementation of integrated water resources management” lack specificity, are difficult to measure and are not time-bound. Notably, there are no specific timeframes accompanying each indicator. In this sense, there are opportunities for strengthening the indicators to monitor and evaluate the success and impacts of aligning with EU directives more thoroughly. Table 4.10 presents the relevant progress monitoring indicators with their units of measurement.

The adoption of the Water Strategy is the first performance indicator in the framework of the future state scenario. Subsequently, evidence of incorporating Water Strategy provisions into RBMPs is considered a performance indicator.

Table 4.10. Progress monitoring indicators

Indicators	Unit of measurement
Indicators assessing the effectiveness of the water institutional framework and water governance mechanisms (baseline vs. future scenario)
Degree of implementation of integrated water resources management (legal, institutional, regulatory and financial aspects)	Percentage
Awareness and accessibility of water information	According to the results of online surveys
Percentage of transboundary river basin districts for which appropriate (river basin-oriented) water co‑operation mechanisms have been introduced	Percentage
Revenue for state and local budgets from rental fees for Special Water Users	Million UAH
Revenue for state and local budgets from environmental taxes for discharging pollutants into water bodies	Million UAH
Number of detected unauthorised water users	Physical or juridical entities
Monetary amount of recovered damages for violations of water protection legislation	Million UAH
Number of laboratories in the optimised system of ecological (water) monitoring that meet the Water Framework Directive requirements	Number of units
Evidence of practical use of automated information systems in making management decisions	Automated information system protocols
Budget allocated to the RBMPs at the national, oblast and local levels	Million UAH
Indicators assessing water quantity management effectiveness (baseline vs. future scenario)
Introduction into Ukrainian legislation of the definition of “ecological river flow” and its application in the water permitting procedure	Inclusion of “ecological river flow” definition and examples of practical application in the water permitting procedure
Water stress level: the share of the volume of fresh water taken in relation to the volume of available freshwater resources	Percentage
Water volume used for all economic activities, particularly agriculture, industry and the service sectors	Million cubic metres
The share of arable land in the total territory of the country	Percentage
Number of restored riverbeds of small rivers and swamps of Ukraine	Kilometres or hectares
Water capacity of GDP (per UAH 1 000 of GDP in real prices)	Cubic metres
Annual value added per volume (cubic metre) of water taken economic activities	USD
The amount of annual water losses during transportation	Million cubic metres
Number of annual violations of the legislation on water protection zones and coastal protection strips	Units
Indicators for water quality effectiveness and pollution prevention (baseline vs. future scenario)
Share of treated wastewater discharges of total discharges to water bodies	Percentage
Share of polluted wastewater discharges in the total amount of discharges to water bodies (separately to for marine environments)	Percentage
Additional capacity of constructed or reconstructed wastewater treatment facilities in urban and rural areas	Thousand cubic metres/year
Number of enterprises that have introduced preliminary (local) wastewater treatment facilities	Units
Detection cases of water pollution	Units/year
Percentage of surface water bodies deemed in “good” ecological condition in relation to the total number	Percentage
Percentage of artificial or significantly modified surface water bodies deemed in “good” condition in relation to the total number	Percentage
Percentage of groundwater bodies deemed in “good” quantitative and qualitative status in relation to the total number	Percentage
Economic value of damage to aquatic ecosystems (particularly fisheries) due to thermal water pollution	UAH million/year
Damage to aquatic ecosystems, in particular fisheries, due to biological pollution of water	UAH million/year
Total area of zones vulnerable to the accumulation of nitrate compounds identified for each area of the river basin district	Thousand hectares
Share of the area of zones vulnerable to the accumulation of nitrate compounds (defined for each river basin district) in the total area of the river basin district	Percentage
Mass of dehydrated and utilized post-treatment sludge	Thousand tonnes
Volume of detergents sold in Ukraine that does not contain orthophosphate compounds	Thousand tonnes
Amount of funds received by the State Budget of Ukraine as part of the environmental tax for water pollution	UAH million/year
Facts (evidence) of BAT introduction in industrial and agricultural production	Facts (evidence) of BAT availability
Indicators for assessing the availability of appropriate (quantity and quality) drinking water (baseline vs. future scenario)
Volume of daily water used by one urban resident (per capita water use)	Cubic metres/day
Proportion of the rural population with access to safe and affordable drinking water from the total	Percentage
Proportion of urban population with access to safe and affordable drinking water	Percentage
Share of the rural population connected to the centralised water supply	Percentage
Share of the urban population connected to the centralised water supply	Percentage
Length of urban water supply networks that have been repaired or replaced	Kilometre
Share of the rural population with access to improved sanitation	Percentage
Share of the urban population with access to improved sanitation	Percentage
Length of urban sewage systems that have been repaired or replaced	Kilometre
Tariffs for water supply and sewerage	UAH/cubic metre
Existence of water supply, sewerage network and urban treatment facilities optimisation schemes in Master plans for development of cities or settlements	Fact of availability

Source: Author’s own elaboration

References

[2] European Environment Agency (2020), Water availability, surface water quality and water use in Eastern Partnership countries: An indicator-based assessment, https://www.eea.europa.eu/publications/regional-water-report.

[1] European Union (2014), “Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part”, Official Journal of the European Union I. 161/3, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:22014A0529(01)&from=EN.

[5] EUWI+ (2020), Dnipro River Basin Management Plan: Significant Water Management Issues, https://www.euwipluseast.eu/en/component/k2/item/1180-ukraine-summary-of-the-dnipro-rbmp-for-the-1st-consultation-main-issues-full-dnipro-basin-eng?fromsearch=1.

[7] Regional Environmental Centre for Central and Eastern Europe (2016), Upper Dnieper River Basin: Draft River Management Plan, http://documents.rec.org/publications/4_UpperDnieper_Eng.pdf.

[4] State Statistics of Ukraine (2017), Environment of Ukraine 2016, https://ukrstat.org/uk/druk/publicat/Arhiv_u/07/Arch_dov_zb.htm.

[3] State Statistics Service of Ukraine (2020), Environment of Ukraine 2019, https://ukrstat.org/uk/druk/publicat/kat_u/2020/zb/11/Dovk_19.pdf.

[6] UNENGO ’MAMA-86’ (2015), River Basin Management Plan for the Upper Dnieper Pilot Basin of Ukraine: Draft, http://blacksea-riverbasins.net/sites/default/files/RBMP_Upper%20Dnieper_UA_EN_final_1.pdf.