The “investment nanny” law: Why is it important for the bioenergy sector?
Anna Pastukh, an expert on legal issues of the Bioenergy Association of Ukraine, singled out the main provisions of the so-called “investment nanny” law related to bioenergy.
We will remind you that the President of Ukraine signed the updated Law of Ukraine on the implementation of investment projects with significant investments” (from August 9, 2023 No. 3311-IX).
Undoubtely, the law will affect the bioenergy sector. The list of investment projects with significant investments implemented on the territory of Ukraine in the spheres of processing industry includes projects from:
- production of bioethanol, which is intended for use as a fuel component,
- production of biogas and biomethane (in particular, liquefied or compressed).
What does this mean in practice?
In general, tax benefits, financial and non-financial incentives:
- exemption from payment of certain taxes and fees;
- exemption from import duty taxation of new equipment and accessories for it;
- ensuring the preferential right of use of a land owned by the state or communal property for the investment project implementation;
- ensuring the construction of engineering and transport infrastructure facilities or compensation for the cost of such construction at the expense of state, local budgets and from other sources not prohibited by law;
- compensation for the costs of connecting to engineering and transport networks;
- exemption from compensation for losses of the investor’s forestry production.
Requirements for such projects
Investment projects with significant investments should include:
- construction, modernization, technical and/or technological re-equipment of investment objects, purchase of necessary equipment, as well as construction of engineering and transport infrastructure;
- creation of new jobs (from 10 to 50 depending on the salary);
- the amount of significant investments must exceed 12 million euros;
- the term of project implementation should not exceed 5 years.
In general, the Law aims to improve the system of providing investment incentives, as well as to expand access to it by reducing the requirements for the threshold amount of investments (12 million euros instead of 20) and the number of jobs (from 10 to 50 jobs instead of 80), granting permission to start implementation of projects before the signing of a special investment agreement
