The Second Joint progress report on co-operation in the field of energy between the European Union and Ukraine was signed on 14 September 2007 by the European Commissioner for Energy Andris Piebalgs and the European Commissioner for Foreign Relations and the European Neighbourhood Policy Benita Ferrero-Waldner, on the one hand, and the Minister of Fuel and Energy of Ukraine Yuriy Boyko, on the other hand.

The Memorandum of Understanding (MoU) on co-operation in the field of energy between the European Union and Ukraine was signed on 1 December 2005 in implementation of the EU-Ukraine Action Plan of 21 February 2005. It sets out how the two sides’ plan to organise their work to bring closer their energy markets.

The MoU establishes a joint strategy towards the progressive integration of the Ukrainian energy market with that of the EU and consists of road maps covering four specific areas:

- Nuclear safety,

- Integration of the electricity and gas markets,

- Enhancing the security of energy supplies and the transit of hydrocarbons,

- Improving the effectiveness, safety and environmental standards in the coal sector.

The MoU also anticipated the development of a roadmap on energy efficiency, renewables and measures to tackle climate change. That roadmap is being prepared in line with EU and Ukraine priorities.

For each of these five areas of work, joint implementation groups have been established and all groups have now met at least twice in Kyiv. A first joint progress report was prepared in 2006 and signed on 27 October 2006 on the margins of the EU-Ukraine Summit in Helsinki, Finland. The second joint progress report was similarly signed in Kyiv on the margins of the EU-Ukraine Summit of 14 September 2007.

The main developments highlighted in the second progress report are:

- The fact that significant funding from the International Financial Institutions has been secured to implement priority projects for the security of energy supply and transit of hydrocarbons. A preliminary audit of the Ukrainian gas transit network has been completed, which has identified the need for some ˆ2,500 million of investments of the period 2007-2013. The parties agreed in this respect to organise early next year a pledging conference involving the International Financial Institutions, private sector financial bodies and the national financial agencies of EU and non-EU countries.

- The expected start of the Joint Project between the Commission, the International Atomic Energy Agency and Ukraine on the evaluation of the nuclear safety of the Ukrainian Nuclear Power Plants after the agreement on the Terms of Reference and the Technical Guidelines for the project. The Project is expected to start in November 2007.

- The launch of the capacity-building Twinning project on the strengthening of the national regulator concerning electricity, as well as the on-going preparation of a similar project for gas market regulation.

- The progress achieved concerning the preparation of a sector-wide coal sector policy support project. It is foreseen that the project will be launched in early 2008; and

- The fact that a roadmap is being prepared by the working group on energy efficiency and renewable energies.