Page 36 - TURKRptJun22

36 I Cover story bne June 2022
The economy has been growing by
at least 8% every year since 2024, and renewable energy investors rapidly returned as Ukraine began
to recover from the war. In the last three years, foreign direct investment (FDI), which has doubled in the
last two years, is driving growth.
Ukraine is expected to shed its dependence on gas by 2030, although it will probably continue to buy Russian gas to produce hydrogen. However, Europe has learnt its lesson and is keeping Russia’s contribution
some sanctions dropped and to repair commercial ties with Europe.
Moreover, with Norway’s gas production in decline and the Netherland’s Groningen gas field having closed down four years ago due to earthquakes, those in favour of the deal say that Europe has little choice but to use expanded LNG deliveries from the US, which now dominates the business, as hydrogen feedstock
is not economically viable if the gas is to compete as a fuel source with far cheaper green energy, even if some
Musk said in a recent interview that he is willing to build another plant
at least as large as the Berlin facility, provided Kyiv gets Brussels to sign
off on its compliance to Chapters 2,
3, 5 and 7 of Ukraine’s EU accession deal that covers reforms to the labour code, free access to energy, property rights and set the duties for the import of parts from the EU into Ukraine.
Ukraine is rapidly emerging as
a technology centre in Europe thanks to cross-fertilisation of these industries and Ukrainian President Volodymyr Zelenskiy’s sweeping Investment Protection Act signed in 2023 that slashed corporate taxes and gives iron-clad property rights protection that are all modelled on EU best practices. “We are more European than Europe!” has become the president’s rally slogan.
Ironically, part of Ukraine’s tech success has been due to the flood of high-quality Russian technicians and software engineers that migrated to Lviv for work once they had obtained their “Persil proposk” certifying they were in opposition to Putin’s war. The certificate allows them to apply for Ukrainian work permits. Since merely having a Russian exit stamp in the first months of the war was made enough to qualify a tech engineer for a Persil proposk, the whole process became much easier, as Russian and Belarusian engineers remain in high demand.
“Ukraine is expected to shed its dependence on gas by 2030, although it will probably continue to buy Russian gas to produce hydrogen”
to EU hydrogen supplies to 15% – low enough that it can easily be sourced elsewhere if tensions flare again.
Kyiv became home to the headquarters of the European Green Hydrogen Corporation (EGHC) last December and talks with Russia to expand gas supplies to Ukraine’s solar-powered hydrogen production facilities are currently ongoing, but remain difficult.
Support for doing the proposed supply deal between Naftogaz and Gazprom has grown, as some argue that Russia needs to be brought back into the global emissions reduction campaign as temperatures continue to rise. The Paris Climate accord targets have been missed and no one is suffering more from climate change than Russia. Temperatures there are rising three times faster than elsewhere on the planet, and two thirds of Russia’s permafrost is now deemed to be in danger of melting. If the ground in Russia’s tundra reaches zero, which
is now expected to happen in the next few years, then gigatonnes
of primordial CO2 that have been locked in the ice for millennia will be rapidly released with unpredictable consequences. The Kremlin has been leveraging this danger to try to have
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hydrogen fuel will always be needed to cover the baseload demand for power when renewable energy is not available.
Ukraine is also establishing itself as
a major centre for battery production, based on its extensive lithium deposits, the largest in Europe.
The Lithium Metallurgical Kombinat of Ukraine (LMKU) celebrated the production of its first kilo of the metal last month at a ceremony attended
by Elon Musk, who is negotiating for a long-term supply deal to support his growing Tesla empire.
The development of the LMKU plant has been fraught with problems, requiring the government to totally rewrite the concessions legislation, but investors are excited, as the plant’s construction is expected to clear the way for the development of an EV production complex in Ukraine.
Musk is also negotiating a deal to take over Ukraine’s small automotive producer Eurocar in the west of
the country, which is anticipated to become the basis of a massive Tesla factor to match his $1bn plant in Berlin that is now five years old and struggling to keep up with demand.