Global objective

To contribute to rendering the Ukrainian economy modern, clean, resource-efficient and competitive, with economic growth decoupled from resource use, and citizens' health and well-being protected from environment-related risks and impacts.

Specific objective(s)

1. To establish and map the current state of play of the circular economy in Ukraine in terms of policies, legislation, key actors, private sector activities and barriers;

2. To identify potential opportunities and impacts of a transition to a circular economy in Ukraine for (at least 5 and up to 10) pre-selected priority sectors and value chains;

3. To develop a Circular Economy Strategy and Action Plan.

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The Contractor shall complete the following tasks:

Component 1. Covering the analysis of the current state of play and opportunities of circular economy at the level of national policies and per sector.

The study shall include ex-ante analysis of resource efficiency practices, policies and investments, quantitative modelling of different scenarios, including a business-as-usual one; estimation of effects of policies and assessment of required investments. The targets for scenarios chosen should take into account those already included in the adopted national strategies and plans, and the current effects of military hostilities. The study should include a comparative presentation of different scenarios to facilitate communication and decision-making and recommendations on stimulating policies.

The modelling will follow three steps: 1) collecting the required data; 2) building the model and 3) designing and running the scenarios. Results of the modelling of circular economy scenarios will be presented as divergences from the baseline (business as usual) scenario by 2023, 2025, 2027 and 2030. Opportunities and threats, macroeconomic effects, social impacts and benefits shall be presented for each sector.

Based on the trends in and opportunities for circular economy activities, the following sectors are pre-selected (the selection may be changed during the Inception Phase or upon the completion of the ex-ante analysis if duly substantiated and approved by the Beneficiaries and the Contracting Authority):

• Waste sector, as waste collection and recycling rates need to increase to enable for circularity;
• Textiles, taking into account the complexity of the textile value chain, impacts of fast fashion changes, current limited textile reuse, significant input to waste accumulation and to GHG emissions from industrial wastewater, and the need to stimulate demand for sustainably produced garments;
• Electronics, which with proper and safe treatment practices in place also represents an opportunity for reusing and remanufacturing, resulting in an increased supply of affordable products as well as an opportunity for recycling of valuable materials present in the E-waste;
• Buildings and renovation, which will become of particular importance during the postwar recovery process of Ukraine;
• Plastics, the consumption of which is growing in an unsustainable manner, and which represents a major share of chemical industry products imports to Ukraine. Increase uptake of recycled plastics, reduction of plastic waste and microplastic presence in the environment are necessary;
• Batteries, where new value chains are emerging as a result of e-mobility development. New draft Law on Batteries and Accumulators addresses the issues of recycled content, recovery of valuable materials and safe disposal. Further measures will be necessary to tackle non-rechargeable batteries and to align with the new EU regulatory framework being developed;
• Agriculture is a critical part of the Ukrainian economy. In this sector, a substantial potential resides in the improvement of handling, storage and distribution of food products to prevent losses. This sector may also be a supplier of by-products to feed industrial and energy generation processes;
• Minerals and metals provide crucial raw materials for society and are used by almost every sector of the global economy. Their extraction and further processing will be key to delivering the clean technology, mobility and digital solutions necessary for the transition of all industrial sectors towards climate neutrality and a circular economy.

Component 2.

To support the development of and public discussions on a national Circular Economy Strategy, ensuring mutual supportiveness with trade policies, and an Action Plan covering at least 5 up to 10 priority sectors to be chosen based on the results of the modelling exercise.

To prepare monthly notes on ad-hoc issues relevant for the Ministries of Economy and Environment Protection and Natural Resources, e.g. for the development of legislation on issues related to a circular economy; development of by-laws on waste management (notably, on licensing economic activities on management of dangerous waste) and on limitation of single-use plastic. Such notes should take into account and ensure complementarity with resources available under other ongoing EU technical assistance projects.

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