European Commission 2026 report outlines key steps for Ukraine's gas market liberalization

In its annual report on Ukraine for 2026, released on November 4 as part of the EU Enlargement Package, the European Commission identified priority areas for reforming the country's gas market. According to the document, lifting the natural gas export ban, phasing out Public Service Obligations (PSO), and ensuring proper unbundling of gas distribution system operators remain critical steps that Kyiv must take to align with the European energy market.

What Brussels expects from Kyiv

The report emphasizes that reforms in the energy sector must be accelerated. Specifically, it refers to three areas: ensuring proper unbundling of gas distribution network operators, the gradual phasing out of PSO, and lifting the ban on natural gas exports. Furthermore, the document highlights the need to speed up the liberalization of energy markets as a whole and to establish a mechanism for financing the needs of vulnerable consumer groups.

Initial progress recorded

The European Commission acknowledges minor but real progress in Ukraine's gas market. Specifically, the report notes that Public Service Obligations (PSO) have already been abolished for electricity producers using gas. In Brussels' view, this is a tangible first step toward liberalizing the sector; however, further efforts in other areas are required to achieve full compliance with EU requirements.

Controlled exports: The mechanism is now operational

Ukraine has previously taken the first practical step toward opening the gas market by allowing private gas-producing companies to carry out temporary controlled exports of a portion of their own gas. The mechanism provides for limited export volumes and retains the possibility of suspension should risks to the domestic market arise. According to data in the report, 29 private gas producers utilized this new export mechanism in October 2026, marking the practical launch of the tool.

Context: EU Enlargement Package

The annual report on Ukraine was presented within the EU Enlargement Package, which gives the document additional political weight. The European Commission's expectations regarding the gas market are directly linked to Ukraine's preparation for potential EU membership and the alignment of its energy legislation with the acquis communautaire. For Kyiv, fulfilling these requirements is becoming not only a technical necessity but also a political condition for further integration with European structures.