Ukrainian State Enterprise, under the name “Ukrecoresursy,” has initiated the creation of an eco-industrial park dubbed Green Innovation Valley that promises not only to solve pressing environmental problems, but also to create new economic opportunities related to domestic waste management in Ukraine, as well as for international waste management community. The initiative is strongly supported by the country’s government and offers great opportunities for foreign investors to develop sustainable green businesses.
While waste management in Ukraine is seen as a problem, it has a great potential to bring significant economic and environmental benefits. Post-Soviet Ukraine is a young country that recently celebrated its 21st year of independence. The second largest country in Europe by geography, it has a combined heritage of rich natural resources and vestiges of communism that span the last two decades.
During the Soviet era, use of recycled materials was considered an important factor in resource conservation. The Specialized Institute of Secondary Resources of U.S.S.R. was responsible for all relevant functions of recycling and the use of recyclables, as well as for raising ecological awareness among the population. To foster separation of waste it employed material incentives and “socialist competition.”
Following the collapse of the Soviet Union, the system of waste management in Ukraine completely imploded. Unsurprisingly, the new government was busy dealing with more pressing problems than improving waste collection and recycling. Organizations that previously specialized in treating waste went bankrupt or reoriented their activities. Meanwhile, the total volume of solid waste in Ukraine has increased by 30 to 40 percent (The State Committee of Statistics of Ukraine, www.ukrstat.gov.ua). This combination of factors meant existing landfills rapidly became overloaded, leading to a dramatic increase in the number of unauthorized dumps across the country.
“Ukrecoresursy” was founded in 1998, via legislative act, as the sole enterprise entitled to develop and implement a system for collection, storage, recycling and disposal of waste, including used containers and packaging materials for domestic and foreign producers. (The Resolution of the Cabinet of Ministers of Ukraine #915 (2001)) From the beginning the mission of Ukrecoresursy was to ensure national environmental security through the reduction of solid waste disposal. With the direct support of the Cabinet of Ministers of Ukraine, the highest executive authority in the country, Ukrecoresursy acts as a waste management operator and owns several recycling complexes: waste sorting lines ranging from 20,000 to 100,000 tons of output per year, some garbage trucks and containers. The enterprise has 26 regional branches in every region of Ukraine and annual revenue of USD 15 million (2011). However, available equipment is not sufficient to provide adequate separate waste collection services.
Changing Ukraine's Waste Landscape
Given the daunting task of doubling the national recycling rate by 2020 through increased utilization of recyclables, UkrecoresursyCEO Dmytro Radionov has launched several initiatives to develop Ukraine’s waste management infrastructure. One of these initiatives involves the creation of Green Innovations Valley, an industrial park focused on the development and implementation of evidence-based programs in the field of waste management. “There are industrial parks in Ukraine, but none of them works in the field of treating waste as secondary raw materials, although the country urgently needs to find a solution to accumulating solid waste and a rapidly worsening ecological situation,” says Radionov. “Ukraine urgently needs to start recycling on a sustainable basis.
“Green Innovations Valley has several goals, but the main objective is to integrate state resources, science and business for a complex development of the field of waste treatment in Ukraine. It will result in an improvement of the environmental and economic situation in the country,” emphasizes Radionov.
Creation of synergies between the scientific, educational, manufacturing and financial sectors will boost development of innovative activities in the field of waste management. The project intends to focus on energy-efficient technologies and effective use of market mechanisms to promote eco-friendly innovations.
Green Innovations Valley will specialize in four key services:
1. Implementation of energy-efficient equipment and technologies for recycling
2. Development and implementation of innovative programs and projects in different regions of Ukraine for waste collection, treatment and disposal
3. Introduction of new products and resources produced using recycled materials
4. Consulting services and operational support for local waste operators
Special attention is paid to technologies related to plastics recycling, paper recycling, tire recycling, biofuels and refuse-derived fuels (RDF). Ukrecoresursy is searching for foreign companies interested in entering the unoccupied Ukrainian waste market that might be looking for a local partner that can provide legal, administrative and operational support necessary for a business start-up. Cooperation can be in a form of “build-own-operate,” co-ownership, or the leasing and rental of equipment.
Additionally, Green Innovations Valley welcomes participants from other sectors, including research and development (R&D) organizations, waste management operators and equipment manufacturers, businesses providing scientific and technical expertise, venture capitalists and commercial banks. The R&D base of the industrial park will bring together leading Ukrainian specialized organizations, research institutes and universities working on green innovations, and will become a practical platform for human resources and development specialists.
Among the key benefits of participation in the project: value-added tax (VAT)-free and reduced customs rates for imported equipment; reduced taxation conditions, including 50 percent of income tax; availability of an industrial site with a well-established system of utilities (including electricity, gas, water and sewers); support and participation of the Ukrainian government at all development stages; and a legislative guarantee of the stability of foreign investment for the next 30 years.
The location of the industrial park is the capital of Ukraine with planned expansion to other regions of the country to ensure equal coverage of waste-treating facilities. The industrial site also is located near the international Kiev airport and the incineration plant “Energy,” one of the two incinerators in Ukraine. This convenient location allows cut-off transportation costs for transportation of waste residues directly to the incineration plant, as well as easy access to transportation routes
Up and Running
Green Innovations Valley launched in March 2013, focused on modernization of the existing waste sorting complex in Kiev. In particular, a solid waste sorting line with an output capacity of 65,000 tons of solid waste per year was put into operation. In addition, a draft agreement for the land acquisition necessary for construction of a solid waste treatment complex in the Autonomous Republic of Crimea has been prepared and submitted for approval to the local government. Expansion in the south of Ukraine is planned at the first stage of that project, as Crimea represents an important tourist destination for former Soviet countries.
“In order to assist local entrepreneurs to develop an effective waste business and integrate them into the world’s waste business, Ukrecoresursy engages special equipment manufacturers and offer attractive leasing schemes,” says Denys Krasnikov, chairman of the Ecological Policy Commission of the Ukrainian League of Industrialists and Entrepreneurs. “We have a proven track record of supporting initiatives facilitating development of small business and protecting interests of joint ventures and entrepreneurs in environmental sector in Ukraine. Therefore, we confirm our readiness to provide all kind of administrative, organizational and legal support necessary to create attractive conditions for foreign investors and establish sustainable collaboration between foreign companies and Ukrainian public authorities, as well as promote mutually responsible relationship between the government and waste management business.”
In the near future Green Innovations Valley will be opened to the general public, so that everyone can be educated about the lifecycle of waste, the customization of manufacturing processes for different types of waste, the best equipment for each cycle of waste treatment as well as providing the opportunity to consult with experts about the best operating conditions and payback period calculation. Currently, it is already open for all interested business entities and manufacturers.
Finally, Green Innovations Valley has great potential to bring investments in solid waste management infrastructure, create economic benefits for foreign and domestic investors, create new workplaces and bring added value to local municipalities, reduce landfilling and stimulate the use of recyclables, all while minimizing negative environmental impacts and improving public health in Ukraine.
Hanna Usata is the head of the Ukrainian Health Center, a division of Ukrecoresursy focused on hospital waste as well as solid waste management. She is also responsible for international relations and communication with foreign partners.