Legislative Risks for Renewable Heat: The Industry’s Position on Draft Law No. 13219

The Bioenergy Association of Ukraine (UABIO) has officially addressed the Parliamentary Committee on Energy and Housing and Utilities with concerns regarding Draft Law No. 13219. In its appeal, the Association calls on lawmakers not to support an amendment that would repeal parts four to twelve of Article 20 of the Law of Ukraine “On Heat Supply”, which currently regulate tariff setting for heat produced from alternative energy sources.

According to UABIO, the proposed changes pose systemic risks to producers of heat from biomass and other renewable sources. The abolition of the incentive-based tariff mechanism would significantly reduce investment predictability, complicate the development of new projects, and slow down the substitution of natural gas in the heating sector. For local communities, this would mean continued reliance on more expensive and vulnerable gas-based solutions, while for the state it could result in increased budgetary pressure through public service obligations (PSO) and tariff compensation mechanisms.

The existing tariff framework has already proven its effectiveness. Thanks to incentive-based tariffs, many Ukrainian municipalities have successfully implemented biomass boiler projects, reducing gas consumption, stabilizing heat prices, and lowering costs for end users. Similar support mechanisms for renewable heat are widely applied across the European Union and are fully aligned with the objectives of the EU Renewable Energy Directive (RED II) and broader decarbonisation policies.

In its appeal, UABIO proposes clear and pragmatic solutions: granting heat producers the right to choose the tariff formation mechanism, setting an economically justified tariff at the level of 110% of the weighted average gas-based heat tariff, and extending this approach to the category of “other consumers”.

Global 100 RE Ukraine position is clear: preserving and improving the existing regulatory framework, with the involvement of industry experts, is essential for the sustainable development of renewable heat and for strengthening Ukraine’s energy resilience.