Law of Ukraine "On Coalbed Gas (Methane)"
Date of entry into force: June 19, 2009
The Law establishes legal, economic and organizational grounds for activity in the field of geological research of coalbed gas (methane), including research and industrial development, extraction and removal during degassing, and further use of it as a material and/or energy resource.
Article 1 of the Law defines the main terms used therein. Coalbed gas (methane) is a mixture of gases that accompanies coal beds and adjoining rock.
The Law applies to relations that arise in association to improvement of labor conditions and labor safety for miners; geological exploration of mineral resource reserves; further extraction of coalbed gas (methane) from coal deposits not developed industrially, regardless of their future use; extraction of coalbed gas (methane) during degassing of active mines, mines being prepared for exploitation and abandoned coal deposits; use of coalbed gas (methane) as a material and/or energy resource (Article 2 of the Law).
Article 6 of the Law establishes that the state policy in the field of geological exploration, extraction and use of coalbed gas (methane) is based on the grounds of: · state regulation of geological exploration, extraction and use of coalbed gas (methane); · increasing of safety and efficiency of coal mining sites and sites of geological exploration, extraction and use of coalbed gas (methane); · facilitating diversification of energy carrier sources; · providing for protection of rights and interests of all subjects of relations that arise in association to geological exploration of mineral resources in order to discover coalbed gas (methane) reserves, industrial development of coalbed gas (methane) reserves and processing of methane products, as well as rights and interests of consumers of coalbed gas (methane); · facilitating development of competitive relations in the field of geological exploration, extraction and use of coalbed gas (methane); · environmental protection; · ensuring rational use of mineral resources; · developing international cooperation and implementing innovative technologies in the respective field.
According to Article 8 of the Law, the right to extract coalbed gas (methane) during degassing of active mines is granted to a holder of a special permit for industrial development of a coal deposit within a respective mining lease, or to another entity by consent of the permit holder, according to a procedure established by the Law.
Article 10 of the Law establishes that state supervision and control over adherence to legislation in the field of geological exploration, extraction and use of coalbed gas (methane) is carried out by authorized central bodies of executive power in the issues of geological, mining and environmental supervision (control) and control over efficient use of energy resources.
According to Article 13 of the Law, extraction of coalbed gas (methane) within mining leases of active mining enterprises, as well as geological exploration, including research and industrial development, and industrial development of coal deposit for the purpose of gas (methane) extraction is carried out by a certain special permit issued by the central body of executive power in the issues of geological exploration and ensuring efficient use of mineral resources: · to a holder of a special permit for industrial development of a coal deposit (user of bowels) within a specific mining lease; · another applying business entity within the mining leases of active mines, only by written consent of the user of bowels.
Access to gas transporting networks for the purpose of transporting, supply and storage of coalbed gas (methane), as well as mixes with natural gas, is carried out according to the procedure for access to the Unified Gas Transport System of Ukraine as established by the legislation. The quality of coalbed gas (methane) must correspond to the requirements of the subject of economic activity of the respective gas transport system, with consideration of state standards (Article 15 of the Law).
According to Article 16 of the Law, in order to ensure environmental safety during extraction and use of coalbed gas (methane), business entities shall provide for: · mandatory insurance of the bowel user's property risks during research and industrial or industrial development and use of coalbed gas (methane) in case of environmental harm caused by accidents, fires or technical failures, according to the procedure established by the insurance legislation; · adherence to regulations, norms and standards in the field of mining and environmental protection.
It is prohibited to burn coalbed gas (methane) extracted during degassing, directly from the well in open-cut mining, without the use of special equipment with appropriate operational documentation.
Chapter V of the Law regulates liability for violation of the legislation in the field of coalbed gas (methane) extraction and use.
The Law also introduces amendments to the Law of Ukraine "On Enterprise Profit Tax". According to these amendments, the profit received by enterprises as a result of economic activity that was aimed at the extraction and use of coalbed gas (methane) and carried out according to the Law, is temporarily tax exempt, until January 1, 2020. The funds released due to the tax allowance shall be used by the taxpayer to increase production volumes, modernize the material and technical base, and implement innovative technologies in the field of coalbed gas (methane) extraction and use.
The final provisions of the Law establish that the provision of Article 12 of the Law, according to which exploitation of coal deposits with a high coalbed gas (methane) concentration is forbidden without the necessary ventilation and degassing that regulate the coalbed gas (methane) concentration to the specified levels, comes into effect starting January 1, 2011.