Ukraine’s State Forest Resources Agency has become a major point of contention between two newly created ministries. This follows the recent government reshuffle, in which the former Ministry of Economy, Environment and Agriculture was split in two. Environmental activists are fighting to keep the agency under the new Ministry of Economy and Environment, while the agricultural lobby wants it transferred to the restored Ministry of Agrarian Policy and Food. Below is a detailed explanation of the situation, along with deeper context and conclusions.
Changes in Ukraine’s government spark a fight over forest management
Ukraine’s largest environmental organisation has appealed to the new Minister of Economy and Environment, Oleksandr Kravchenko, asking him not to allow the State Forest Resources Agency to be placed under the restored Ministry of Agriculture, while an influential member of parliament is arguing for the opposite. One of Ukraine’s largest groups of green activists is fighting to prevent the State Forest Resources Agency being handed over to the restored Ministry of Agriculture. The situation escalated four days after the government reshuffle, which left the forestry sector without a clearly designated oversight body. In a letter published on Monday, the All-Ukrainian Ecological League called on the new Minister of Economy and Environment, Oleksandr Kravchenko, to keep the sector under his oversight. The League stresses that reforms carried out over the past five years have increased the sector’s annual profit from 200 million hryvnia to 6.9 billion hryvnia (around 135 million euro).
Activists worried about a possible threat to European requirements
Ukraine’s environmental activists (a strikingly familiar situation, if you picture Latvia...) warn that if the forestry sector falls under agrarian policy, forests will be turned into “a purely commercial tool for resource extraction”. The letter also states that such a transfer would halt the alignment of Ukraine’s forestry standards with EU legislation and could lead to the destruction of newly regrown natural forests in order to convert this land to agricultural use.
The conflict stems from the recent reorganisation of the government in Kyiv. On 16 July, the Verkhovna Rada confirmed the former head of Naftogaz, Serhiy Koretsky, as prime minister, and also split up the “mega-ministry” that had existed for a year. As a result, a Ministry of Economy and Environment headed by O. Kravchenko was created, and the Ministry of Agrarian Policy and Food, headed by Taras Vysotskyi, was restored. The statutes of both ministries have not yet been approved, so it remains unclear which minister will oversee the agency, its 10.4 million hectares of state forest land, and its 24,000 sector employees.
Political pressure from all sides
The wish to steer the sector towards agriculture has already been voiced publicly. The deputy chair of parliament’s Committee on Finance, Tax and Customs Policy, Oleksandr Kovalchuk, has called on the new government to place forestry, wood processing and furniture manufacturing under agrarian policy. “There’s no time to waste!” O. Kovalchuk stressed, noting that it was T. Vysotskyi who previously led the working groups driving the sector’s reforms. O. Kovalchuk argues that changing the structure during wartime would break working relationships and delay the implementation of decisions already taken. Ecologists and environmental activists have already won this fight once before. From the agency’s establishment in 2010 until 2019, it was under the agriculture minister, until Kyiv transferred forests to the environmental protection bloc. A similar attempt to change the reporting line in 2021 failed after nine green activist organisations signed a joint statement against the move.
Financial records and the stakes for European integration
Financial figures are an argument for both sides. In its annual report, agency head Viktor Smal states that the sector’s net profit reached 6.9 billion hryvnia in 2025, 2.76 times more than the year before. Timber sales reached 30.4 billion hryvnia (596 million euro), and a record 16.1 billion hryvnia (316 million euro) was paid in taxes. “Our reforms have proven their effectiveness,” V. Smal stressed in March this year, comparing these figures with 2020, when, before the reforms, the sector earned only 200 million hryvnia.
The stakes are also high for the European Union. Ukraine currently has low-risk status under the EU Deforestation Regulation (EUDR), thanks to the introduction of electronic logging permits and digital timber traceability reforms. Eco-activists warn that handing control to farmers could undermine European trust in Ukraine’s timber certification before the new rules take effect on 30 December. This could also jeopardise foreign aid earmarked for restoring and demining forests damaged by the war.
In addition, a Cabinet of Ministers resolution adopted in spring 2025 requires clear-cutting to be halted in the forests of the Carpathian Mountains from May 2027. The agency states that staff have been given three years to prepare for “close-to-nature forestry”, but environmental advocates once again “are very concerned” that these changes could be reversed under agricultural leadership.
The company Lisi Ukraini reported this month on new wartime complications – in border forests in Kharkiv region, Russian fibre-optic drones are attacking timber trucks. Nevertheless, the timber trade remains one of the few Ukrainian export sectors showing growth despite the war. The new minister, O. Kravchenko, has no public track record in green policy – he joined the government from the role of managing partner at the Kyiv office of McKinsey & Company, and his career to date has been in strategic consulting and financial-system restructuring.
At the heart of the dispute – a conceptual difference in approach
Ukraine’s government apparatus has regularly experimented with merging and splitting ministries in recent years. The agriculture and environment blocs have both been merged into “mega-ministries” and split apart again. This instability creates institutional uncertainty and a legal vacuum, since the new statutes have not been approved. At the heart of the dispute is a conceptual difference in approach. By its nature, agrarian policy is geared towards maximum yield, resource extraction and short-term profit, which in the eyes of ecologists is destructive to forest ecosystems. The Ministry of Environment’s priority, by contrast, is sustainability, biodiversity and climate regulation.
Since the digitalisation and centralisation of the forestry sector, it has become a highly lucrative state resource, with profit growing from 4 to 135 million euro. In wartime, when the state budget is chronically short of funds, control over such a profitable, tax-generating asset is an enormous instrument of political and economic influence.
The new Minister of Economy and Environment, Oleksandr Kravchenko, comes from the global consultancy giant McKinsey. His background is in crisis management and investment, not ecology. This is once again raising concern among environmental organisations that he could easily give in to commercial pressure.
Risks and problems
Since the new EU Deforestation Regulation rules take effect in December 2026, any uncertainty or institutional instability in forest management could directly jeopardise Ukraine’s timber exports to Europe. If European partners perceive risks in the timber control system, Ukraine will lose significant foreign revenue.
Forestry in Ukraine is currently being carried out literally under front-line and shelling conditions, such as drone attacks in the forests of Kharkiv region. Destabilising the sector’s management could increase safety risks for workers and delay urgent demining work. The state has committed to fully halting clear-cutting in the Carpathians by 2027. Environmental activists believe that if the agrarian lobby wins, there is a real risk that this shift to “close-to-nature forestry” could be frozen or even cancelled in favour of fast, aggressive timber extraction to support the wartime economy. Given the dramatic circumstances, though, that would be entirely logical, since Ukraine urgently needs its own resources to defend the country against the invaders. Doesn’t that concern environmental activists at all?
Prime Minister Serhiy Koretsky, meanwhile, will need to make an urgent decision on which ministry the agency reports to. A compromise will most likely require strong safeguards to be written into the new ministries’ statutes, so that, regardless of which ministry it falls under, the progress made on digitalisation and e-traceability is not undermined.