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

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.

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.

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.

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).

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.

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).

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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.


[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.

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