Closing mines according to European rules: how Ukraine can support its path towards EU membership
by Roman Nitsovych, Research director, DiXi Group
17 September 2026
The just transition of coal regions is not only about energy or climate policy. In fact, this is a much more pragmatic issue that raises specific questions. What economic alternatives will emerge in a community after a mine is closed? What will happen to the employees, and who will be responsible for the land, buildings and other residual assets? How will the state of the environment be monitored, and who will be responsible if environmental problems arise years later? The pragmatic reality is that progress in resolving these issues is directly related to Ukraine's membership of the EU, namely the implementation of the Association Agreement with the EU and the adaptation of legislation to European law.
Closing a mine is not just about ‘turning off the lights and locking the door’
Over the past thirty years, dozens of mines have been closed in Ukraine, mainly without support programmes for workers and communities. However, that experience can hardly be called a just transition. Mine closure was largely perceived as the technical liquidation of the enterprise: stopping mining, dismantling equipment, closing the workings and addressing drainage issues.
However, for the community, the mine is much more than a production facility. It means jobs, local budget revenues, an ecosystem of small and medium-sized businesses around the enterprise, vocational education institutions, and municipal and social infrastructure. It is also a ready-made industrial site with existing infrastructure (roads, railways, and a connection to the electricity grid), which may be attractive to investors.
According to estimates, about 21 thousand people are directly employed in coal mining in the territories controlled by Ukraine. If we include those employed in related sectors, coal-processing plants and coal-fired power generation companies under various forms of ownership, we are talking about 38 communities in 10 regions, where about 2.2 million people live. Therefore, the decision to close a mine is actually the beginning of a process that changes the future of many people.
Ukraine is not starting this process from scratch. By joining the Powering Past Coal Alliance, Ukraine established a political commitment to phase out the use of coal in the energy sector back in 2021. In recent years, Ukraine has adopted the State Target Programme for the Just Transition of Coal Regions until 2030, updated the National Energy and Climate Plan, and developed legislation on climate policy and waste management. There have also been promising initiatives by the hromadas themselves, supported by international partners.
At the same time, the practical implementation of this policy requires further decisions. For example, Ukraine does not have a publicly available schedule, coordinated with all relevant stakeholders, for mine closures and the decommissioning of coal-fired power plants.
Such a schedule should exist, even if its actual implementation begins after the end or lifting of martial law. Without it, it is difficult for hromadas, employees and investors to plan the transition, and the decline of the ‘old’ economy may outpace the creation of a ‘new’ one. Therefore, a mine-closure schedule should be included in the Energy Strategy when the strategy is next updated.
Another issue is that the Ministry of Energy, as the responsible authority, combines several functions: enterprise management, organisation of the liquidation process, approval of relevant decisions and management of budget funds. There is no independent control function. By contrast, mine closures in Poland, Germany and the United Kingdom are organised according to a principle that separates these functions.
Mechanisms for long-term monitoring of mine water, degassing and other environmental risks are also necessary. The body that reviews closure plans, financial guarantees and the fulfilment of long-term obligations should be separate from the body responsible for the direct organisation of the liquidation process.
The only normative document regulating the procedure for closing mines and processing plants was approved in 1997 and has not changed significantly since then. Its logic reflects the thinking of its time: the state must physically liquidate assets and close an unprofitable industrial facility.
The modern approach raises a completely different question: what will the site's life cycle look like after production ends, and how can its assets be used? It is possible to transfer some assets to hromadas before liquidation begins, but resolving property issues is traditionally an extremely difficult and lengthy task for government agencies. A positive signal is that such discussions are already taking place between representatives of the government and communities, with the involvement of civil society organisations.
European integration changes the rules
EU legislation does not reduce the just transition of coal regions to a single regulatory document. Instead, EU legal acts set out specific requirements for the safe closure of extractive facilities, water protection, waste management, environmental assessment, public participation and the protection of the employment rights of dismissed employees. In total, DiXi Group experts have identified around a dozen such acts. These rules are not abstract recommendations for the future.
For example, Directive 2006/21/EC on the management of waste from extractive industries provides for integrated closure planning, financial guarantees for reclamation and post-closure monitoring, independent control and an inventory of hazardous closed facilities. Ukraine needs to move from a physical mine-liquidation project towards a comprehensive closure-management plan.
Such a plan should combine technical liquidation, the management of mine water and waste heaps, long-term environmental monitoring, reclamation, the future use of land and assets, and a social plan for workers.
The second critical requirement is the availability of a financial guarantee. This mechanism requires the mine operator to secure, before liquidation work begins, the full amount of funding required, either in independent accounts or through insurance. These funds are intended for long-term reclamation, as well as post-closure inspection and control.
The logic is simple: a mine should not be closed in such a way that taxpayers are left paying for its environmental consequences ten or twenty years later. This is fundamentally different from a model in which the enterprise ceases operations and the state then has to find money to address the accumulated problems.
In Ukraine's circumstances, deeply unprofitable state mines will, of course, rely mainly on budgetary resources. But the issue of financial guarantees is relevant for private companies, in particular DTEK, which has maintained its commitment to reduce thermal coal production to zero by the end of 2035.
Regulation (EU) 2021/1056 on the EU Just Transition Fund (JTF) defines a clear criterion for access to multibillion-euro funding: funding can be obtained on the basis of a territorial just transition plan (Just Transition Territorial Plan).
Such a plan should identify the territory's challenges, economic alternatives, employee needs, investment priorities and mechanisms for local community participation. It should also be developed on the ‘bottom-up’ principle, through a partnership between the state, local governments, businesses, workers and civil society.
For 2021–2027, the EU allocated 8.4 billion euros to the JTF, with a further 10.8 billion euros in co-financing from the NextGenerationEU recovery instrument. For example, in 2022, Romania secured access to 2.14 billion euros, intended for the reclamation and repurposing of industrial areas, regional economic diversification through the development of entrepreneurship and renewable energy, and the decarbonisation of energy-intensive industries through the production of ‘green’ steel and ammonia.
A separate focus is support for workers: about 30 thousand people are expected to receive training or retraining, and 11 thousand new jobs are expected to be created. The Czech Republic has closed its last mine in the Moravian-Silesian region and therefore expects to receive 19 billion Czech koruna (about 784 million euros) from the JTF for regional development and investment. Having a territorial plan also opens up the possibility of special financing under the InvestEU programme and through the European Investment Bank's Public Sector Loan Facility under the Just Transition Mechanism.
For comparison, national governments are spending comparable amounts. In 2016, Spain agreed to spend 2.13 billion euros to close 26 unprofitable mines. The funds were intended to cover compensation for enterprise losses, payments to dismissed employees and social contributions, as well as to finance safety measures, reclamation and the liquidation of the assets themselves.
Germany spent 4.35 billion euros compensating operators of coal-fired power plants: 1.75 billion euros for LEAG and another 2.6 billion euros for RWE. Romania is expected to spend €790 million on social support for workers who have lost or will lose their jobs due to mine closures, as well as on remedying environmental damage and reclaiming land.
In Poland, the cost of closing mines over the next decade is estimated at 11.3 billion zloty (more than 2.6 billion euros). This includes, in particular, a package of social guarantees for employees who will be dismissed, including tax-free severance payments of 170 thousand zloty (40 thousand euros) each.
Ukraine already has some initial examples of this approach in the Lviv-Volyn coal basin. The hromadas of Sheptytskyi and Dobrotvir, with the support of international partners, have developed their own action plans for a just transition. Similar work has begun in the communities of Western Donbas. But a handful of pilot projects cannot replace a systemic approach. Therefore, if Ukraine expects to use EU cohesion policy instruments and other structural funds, it will need to develop the capacity to carry out territorial planning systematically.
Mine closure is often imagined as the solution to the problem, but in many cases it is only after production ceases that a new set of challenges emerges. Stopping mine drainage can affect groundwater and surface-water conditions. Closed mines can remain a source of methane emissions. Waste heaps and other industrial facilities can continue to pose risks to the environment and human health for many years.
That is why the requirements of EU law cover not only the closure process but also mine-water management and groundwater protection (Water Framework Directive), assessment of baseline conditions and reclamation planning (Directive 2010/75/EU on industrial emissions), accident prevention and management of high-risk facilities (Directive 2012/18/EU), and monitoring of methane emissions from closed and abandoned coal facilities (Regulation (EU) 2024/1787).
When considering the repurposing and use of mine assets after closure, it is worth paying attention to Directive (EU) 2018/2001 on renewable energy sources, which introduces the concept of priority development zones. Accordingly, renewable-energy facilities located on degraded former mining land should benefit from maximum facilitation and accelerated permitting procedures.
For many communities, the mine was not just an employer. It shaped the local economy, infrastructure, vocational education system and social life. That is why the Association Agreement with the EU and the recommendations of the International Labour Organisation (ILO) address the protection of workers' incomes, active employment policies, retraining, social dialogue and support for vulnerable groups. Creating new economic opportunities should be part of the transformation plan for each individual territory, while state-level support should take the form of dedicated rather than general programmes.
Closing a mine requires a plan
Ukraine is in a difficult situation. Some coal assets have been damaged or are located in the occupied territories. The war is changing the economic and security conditions for the transition, because the energy system needs every megawatt of flexible and reserve capacity and every tonne of coal stockpiled for power generation.
But the mines will close, whether because of the depletion of reserves, simple unprofitability, wartime destruction or technical problems. The difference is whether this process will be managed. Managed transition means making decisions in advance, properly assessing risks, and reserving the necessary funds or raising them from non-budgetary sources.
All parties involved in the process should participate in planning, and the hromada should have the opportunity to develop a new economic specialisation. Most importantly, people will have at least a minimum level of certainty, or at least an understanding of what their future may hold.
The just transition of coal regions is not something Ukraine can choose voluntarily or postpone until ‘better times’. It is part of the work that Ukraine must already be undertaking on its path towards membership of the European Union.
This opinion piece was originally published in Ukrainian on the website of Ekonomichna Pravda.