Why Cluster 5, the European Green Deal and the energy transition could accelerate the modernisation of Ukrainian greenhouse production
Ukraine’s protected cultivation sector has historically been regarded as one of the most vulnerable segments of agribusiness. Any fluctuation in energy prices could immediately push domestic greenhouse operations to the edge of profitability, leaving them unable to compete with imported produce, EastFruit notes.
Today, however, the sector faces a dual challenge that also represents a unique window of opportunity for technological transformation. Ukraine has officially entered the practical stage of preparing for accession to the European Union. During the expert discussion “EU Integration on the Line: Agriculture and Rural Development”, participants examined the key financial, environmental and institutional changes required to integrate Ukraine’s agricultural sector into the EU. The Government expects substantive discussions on agriculture to begin in the autumn. Cluster 5, “Resources, Agriculture and Cohesion”, is considered one of the most complex areas of the accession negotiations, as Ukraine must meet 16 indicators covering agriculture, food safety, veterinary and phytosanitary policy, and fisheries.
In parallel with this process, the Government approved Ukraine’s Long-Term Low-Carbon Development Strategy until 2050 in December 2025. The strategy sets a course towards climate neutrality and the large-scale modernisation of the national economy.
For the greenhouse sector, these two developments are creating an entirely new economic reality.
The first test: environmental modernisation and a new standard for plant protection
One of the first challenges on the path towards EU membership will be the harmonisation of plant protection product regulations with the requirements of the European Green Deal.
Compared with many other segments of agricultural production, Ukraine’s greenhouse sector has a significant advantage. The country has its own biological laboratories producing beneficial insects, a well-established professional school of biological crop protection, and leading greenhouse enterprises that have successfully used integrated plant protection systems for many years.
However, European integration will require this experience to be scaled across the entire sector. Biological crop protection, integrated pest management, or IPM, pest monitoring and the minimisation of pesticide residues will gradually become standard production requirements.
For some enterprises, this will mean additional investment in technologies and staff training. Producers that adapt first, however, will gain competitive advantages in both the domestic market and export sales channels.
The second test: the energy transition and production decarbonisation
The energy transition will be an equally important challenge.
Ukraine’s Long-Term Low-Carbon Development Strategy provides for the gradual reduction of fossil fuel use, the expansion of renewable energy, improvements in energy efficiency and the decentralisation of the energy system.
This issue is particularly important for greenhouse production, where energy has traditionally been one of the main components of production costs.
According to a 2025–2026 assessment of the needs of Ukraine’s greenhouse sector, conducted among industrial greenhouse enterprises and small-scale producers — Market Report on Needs Assessment: Protected Crop in Ukraine, commissioned by the Netherlands Enterprise Agency, RVO — energy was identified as one of the principal constraints on the sector’s development.
In winter tomato production, energy expenses may account for between 65% and 75% of total production costs. Among the industrial greenhouse enterprises surveyed, 64% use natural gas for heating, while 55% have already introduced or are using pellets and other alternative heat sources.
These figures demonstrate that the energy transition in the greenhouse sector has already begun. In many cases, it is being driven not only by climate policy, but also by economic necessity.
Traditional greenhouses designed in an era of inexpensive natural gas and limited energy-efficiency requirements are increasingly giving way to modern technological solutions.
At the same time, the war has already triggered a structural transformation of the sector. New investments are increasingly being directed towards the central and western regions of Ukraine, where enterprises can incorporate modern energy-efficient solutions from the outset and operate in line with future EU requirements.
Energy security: the Ukrainian dimension of decarbonisation
For Ukraine, decarbonisation has an additional dimension that is less pronounced in most EU countries.
In the European Union, the transition to low-carbon technologies is primarily associated with reducing greenhouse gas emissions. In Ukraine, it is also a matter of energy security and business resilience during wartime.
Local electricity generation, combined heat and power units, biomethane, biomass, energy storage systems and heat pumps can reduce dependence on centralised energy infrastructure and increase the stability of production.
This is why many technologies viewed primarily through the lens of climate policy in the EU are simultaneously instruments of energy independence for Ukrainian greenhouse enterprises.
Greenhouses as part of the circular economy
Modern industrial greenhouse complexes could become an important component of Ukraine’s future low-carbon economy.
CO₂ utilisation
CO₂ enrichment to stimulate photosynthesis has long been standard practice in most modern industrial greenhouses in Ukraine.
The next stage of development could involve wider use of purified CO₂ recovered from biogas plants, combined heat and power units or industrial facilities. This approach makes it possible to reuse carbon dioxide instead of releasing it directly into the atmosphere, while also reducing the need to produce additional industrial-grade CO₂.
Alternative heat sources
Solutions based on geothermal energy, industrial heat pumps, biomethane, biomass and the use of waste heat from industrial facilities and data centres are developing rapidly worldwide.
Combined heat and power, or CHP, systems will remain an important element during the transition period. These systems simultaneously generate electricity, heat and CO₂ for plant cultivation.
In the context of decarbonisation, natural gas-based CHP is generally regarded as a transitional technology. The use of biomethane, however, could make such systems part of the low-carbon energy infrastructure of the future.
LED modernisation
The transition from high-pressure sodium lamps to modern LED lighting systems can significantly reduce electricity consumption and improve production efficiency.
For many enterprises, the modernisation of supplemental lighting systems could become one of the most economically viable areas of decarbonisation.
The Dutch experience as a roadmap for modernisation
Most of the technologies currently being discussed in the context of decarbonising Ukraine’s greenhouse sector have already been used in the Netherlands for many years.
The Dutch greenhouse industry has become a global leader in biological crop protection, energy-saving screens, LED supplemental lighting, climate control, combined heat and power, and the use of alternative heat sources.
For Ukraine, this creates extensive opportunities for cooperation with Dutch companies, educational institutions and research organisations that have already completed much of the journey that the Ukrainian sector is only beginning. In this context, decarbonisation could become not only a challenge, but also a platform for a new stage of Ukrainian–Dutch cooperation in greenhouse production.
Funding in exchange for reforms: the CAP, the State Agrarian Register and new sources of finance
One of the most complex areas of future negotiations will be Ukraine’s integration into the mechanisms of the EU Common Agricultural Policy, or CAP.
To achieve this, Ukraine must establish a Paying Agency and develop a fully operational system for monitoring and administering agricultural support through the State Agrarian Register. This issue is particularly important for the greenhouse sector, as greenhouse projects require some of the highest levels of capital investment per hectare in agricultural production.
In the future, access to EU financial instruments will increasingly be linked to the principle of green conditionality. Support will primarily be directed towards projects that comply with sustainability, energy-efficiency and environmental safety requirements.
A just transition and new opportunities for the regions
The decarbonisation strategy also places particular emphasis on the just transition of regions whose economies have traditionally depended on fossil fuels.
In parts of Donetsk, Dnipropetrovsk and the Lviv–Volyn coal basin, the development of modern greenhouse complexes could become one of the ways to create new jobs and diversify local economies.
Projects that combine greenhouse production with local energy sources, biomass, biomethane or the use of industrial waste heat appear especially promising.
EU accession negotiations under Cluster 5 and Ukraine’s Long-Term Low-Carbon Development Strategy are two interconnected processes that will shape the future of the country’s greenhouse sector.
The next decade will mark a gradual transition from a model built on inexpensive energy to one in which energy efficiency, technology and compliance with European standards play a decisive role.
Biological crop protection, energy efficiency, alternative energy sources, digital monitoring and production transparency will gradually cease to be competitive advantages and become essential conditions for operating in the market.
The winners will be those companies that already view European integration and decarbonisation not as an additional burden, but as an opportunity to modernise, attract investment and reach a new level of competitiveness.
Research referenced in the article:
https://www.rvo.nl/onderwerpen/landen-en-gebieden/oekraine/sectoren/landbouw-en-voedingsmiddelen/bedekte-teelt
Kateryna Volianska, Independent Consultant for the Netherlands Enterprise Agency (RVO — Rijksdienst voor Ondernemend Nederland)
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