Ukraine is entering the critical phase of post-war reconstruction — and decisions about heating systems being made now will shape the country's energy dependence for decades.
The numbers are significant. Through the state eReconstruction program, over €1 billion in compensation has reached 145,000 families, backed by the World Bank, US, and UK. The European Investment Bank is directing €55 million toward social infrastructure and heating networks. The Ukraine FIRST Initiative — a joint program of the Ukrainian government, EIB, EBRD, and European Commission — is implementing €30 million in energy infrastructure projects. The US-Ukraine Reconstruction Investment Fund aims to reach $200 million by late 2026.
But here's the gap: Ukraine needs approximately €102 billion for a full decarbonization of its buildings and energy sector. The country's Decarbonisation Fund can currently offer a maximum loan of €2 million per project — catastrophically insufficient for the scale required.
Without a systemic approach, Ukraine risks rebuilding with the same gas-dependent infrastructure Russia has been destroying for almost 4 years. The heating systems installed now are expected to operate for 20-30 years.
Scotland faced a version of the same challenge and built a model worth studying.
One system, three problems solved
Rather than treating fuel poverty, energy security, and climate goals as competing priorities, Scotland created a layered support system addressing all three simultaneously.
For the most vulnerable households, the Warmer Homes Scotland program provides £10,000 or more per household for insulation and heating upgrades — free for those who qualify. Since 2015, over 46,000 households have received support, with recent installations focused on heat pumps and high-efficiency electric systems.
For middle-income homeowners, Home Energy Scotland offers grants up to £9,000 combined with interest-free loans. Households can combine funding to install heat pumps alongside insulation, cutting bills while improving the building’s energy ratings.
The key mechanism: energy companies are legally required to fund efficiency improvements for low-income customers through the Energy Company Obligation — over £4 billion since 2013. This shifts costs from taxpayers to companies profiting from energy sales.
Gas network operator SGN funds the Safe & Warm Community Scheme through a targeted tariff surcharge under the Vulnerability and Carbon Monoxide Allowance mechanism, created by British regulator Ofgem to support consumers in exceptional circumstances. This demonstrates how infrastructure operators can directly fund support for vulnerable customers.
The results: building emissions declining, heat pump installations rising, households that once faced fuel poverty now paying lower bills in warmer homes.
What Ukraine would need
Translating Scotland's approach would mean ensuring all reconstruction measures aim not simply at replacing existing equipment, but at achieving modern energy efficiency standards and using predominantly renewable energy sources.
This requires incorporating ambitious new targets into government regulations and creating targeted funding pools for gas and heat network operators.
These mechanisms should be combined with government grants through the State Agency for Energy Efficiency and a properly capitalized Decarbonization Fund — ideally funded through environmental taxes on CO₂ and dedicated borrowing for green projects.
It is impossible to accurately predict the required expenditures at this stage, given the ongoing large-scale destruction caused by Russia and the lack of data on the energy situation in the occupied territories of Donbas and Crimea.
Since all state priorities are currently focused on maintaining energy system stability during wartime, international support remains essential.
Programs like the Ukraine FIRST Initiative and Ukraine Facility Plan, involving the EIB, EBRD, and World Bank, provide critical pathways — as does access to EU climate funds through programs within the framework of the European Green Deal, for example the project Green Deal Ukraine. Future revenue from emissions trading could help, once Ukraine implements alignment with the EU's Carbon Border Adjustment Mechanism.
The policy direction already has support. The leadership of Ukraine's State Agency for Energy Efficiency and Decarbonization Fund, along with advocacy groups and NGOs such as Razom We Stand, are publicly calling for integration of decarbonization into reconstruction programs.
The will exists. The funding does not.
The obstacles
Scotland has UK government funding. Ukraine is rapidly implementing European legislation and practices but is not yet eligible for EU aid programs available to member states. All state funds go primarily toward fighting Russia's military aggression.
Two structural problems in Ukraine's energy market make the transition harder.
- First, gas prices for households have been frozen throughout the war to support the population — an understandable emergency measure that nonetheless discourages energy efficiency and creates enormous debts in the gas market. Without price signals, there's little incentive to insulate or switch to heat pumps. The lack of compensation mechanisms for gas operators and suppliers for the price difference also creates conditions for corruption.
- Second, Ukraine faces a severe shortage of skilled workers for installation and retrofitting. Many have been mobilized into the military.
The irony: Russian attacks are destroying outdated Soviet infrastructure, prompting accelerated efforts to renovate municipalities using modern technologies. Energy restrictions and blackouts have become factors accelerating the transition to efficient and renewable systems.
Europe's commitment to accelerating the energy transition since 2022 through the REPowerEU plan shows the same dynamic. Destruction, perversely, can enable modernization — if the replacement systems are chosen wisely.
The stakes
The heating infrastructure Ukraine installs during reconstruction will operate for 20-30 years. Choosing gas boilers now means decades of continued vulnerability to energy blackmail and price shocks. Choosing heat pumps, district heating, and efficient buildings means resilience and permanent energy independence.
Scotland's experience shows that democratic European countries can combine social protection, climate policy, and energy security in one coherent system. Supporting Ukraine in building the same is an investment in Europe's stability.
Editor's note. The opinions expressed in our Opinion section belong to their authors. Euromaidan Press' editorial team may or may not share them.
Submit an opinion to Euromaidan Press
