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August 24 marked the 30th year of Ukraine’s independence. The country needs to build on the experience gained to strengthen its democracy and ensure a sustainable market economy. The news of President Volodymyr Zelensky’s upcoming visit to the White House comes at a pivotal time for US-Ukraine relations. President Joe Biden was criticized for its support of the Nord Stream 2 pipeline, which ultimately reduced Ukraine’s influence in the region. An essential pillar for bilateral relations is a new agenda for US-Ukraine affairs – to transform Ukraine’s narrative from that of a regional problem to a regional partner in energy security and energy transition.
Marked by the tense economic and political situation and the spreading COVID-19 pandemic, recent years have shown that in order to achieve decent geopolitical security, Ukraine needs to strengthen energy security by diversifying energy sources and supply routes. While the rest of the developed world is calling for action to minimize carbon emissions, Ukraine must do both: develop new energy supply routes and additional clean alternatives. A strong relationship between the US and Ukraine would support these vital objectives.
One of the critical areas for cooperation is to promote liquefied natural gas (LNG) trade between the US and Ukraine. The development of LNG has forever transformed natural gas from regional to one of the most dynamic global energy markets. Currently, the global LNG market volume is estimated at 490 billion cubic meters (bcm). By 2030, the share of the physical volume of global gas exports is expected to be close to 50 percent, while in 2050 it will approach 60 percent. In 2020, the COVID-19 pandemic forced the world’s leading countries to rethink the role of coal and instead prioritize more environmentally friendly fuels, including natural gas.
As the owner of one of the world’s largest and most advanced gas transmission systems and equipped with Europe’s largest 31 bcm underground gas storageUkraine sees strong demand for natural gas. Yet the unreliability of the Russian gas transition beyond 2024 creates an urgent need for diversification. LNG offers Ukraine the opportunity to switch from coal as the primary fuel source for electricity generation while reducing greenhouse gas emissions. With the growth of gas production over the past decade, US became the third largest LNG exporting country in 2020, after Australia and Qatar, and has reserves and export capacity for continued growth. A US-Ukraine LNG partnership opens up a new market for US exports, and the availability of Ukraine’s gas transmission system provides better conditions for access to the world’s second largest consumer of LNG: the European Union.
Another area for Ukraine to partner with the US is green hydrogen. Hydrogen development would put the country at the top of the climate change game. By adopting its ‘hydrogen strategy’, the US Department of Energy has sent a clear signal that it intends to make hydrogen technology the keys to the US energy transition through 2050. Ukraine, which possesses one of the world’s largest gas transmission systems , is vital to the world moving beyond fossil fuels by leveraging the hydrogen development in the US.
Finally, Ukraine could establish a strong international partnership by connecting the local IT market with international companies looking for green solutions. The cooperation with the US in the context of climate technology is particularly promising. Ukraine is already home to one of the most thriving IT industries in the world. employed with more than 200,000 employees, the IT sector alone generates at least 20 percent of total Ukrainian export services. More than half of the turnover in the Ukrainian IT sector already comes from the US, and further cooperation could benefit both countries.
A recent report from PwC showed that climate tech experiences 84 percent growth per year and predicts that the sector will achieve even better results in the future. Establishing the dialogue between Ukraine and the US in the context of climate technology would bring long-term benefits, help channel existing investments in sustainable projects and stimulate innovation to combat climate change, find mineral resources for renewable energy plans and the energy to increase efficiency.
The magnitude and pace of the energy transition we are experiencing today is remarkable, despite the COVID-19 crisis. Leading countries worldwide have already made critical decisions that promise to transform investment portfolios in the energy sector. The US, which recently rejoined the Paris accord under the Biden administration, aims to complete the transition to zero-energy electricity generation by 2035. This implies a massive shift to renewable energy and significant improvements in energy efficiency by 2030. In this context, Ukraine needs to jump on the green technology train to catch up with its western counterparts.
When the challenge of climate change mitigation requires the world to join efforts and cooperate, Ukraine has the potential to strengthen its relations with the US, reach a new level in energy cooperation by developing LNG trade, building its hydrogen industry and green technology exchange solutions.
Natalia Katser-Buchkovska is founder of the Ukrainian Sustainable Fund. She was a member of the Ukrainian Parliament from 2014-2019.
The views expressed in this article are those of the author.
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