A biofuel exchange is being created in Ukraine

A biofuel exchange is being created in Ukraine, and for this the Government calls on business and farmers to increase the share of alternative types of fuel on the market. The memorandum on cooperation has already been signed by the State Agency for Energy Efficiency and Energy Saving and the Ukrainian Energy Exchange.

Currently, the priority is to create a transparent and competitive biofuel market. According to Kostyantyn Shevchuk, deputy general director of the Ukrainian Energy Exchange LLC, bioenergy is one of the strategic directions for replacing natural gas. However, for the development of the direction, it is necessary to create appropriate conditions on the market, which do not really exist today. Therefore, in his opinion, the transition to stock trading will significantly affect the price dynamics in the biofuel market, and the trading will come out of the shadows.

"Today, Ukraine imports 1/3 of gas. This can be avoided thanks to alternative types of fuel, which will save a lot of money in the budget," says the head of the State Agency for Energy Efficiency and Energy Saving, Hanna Zamazeyeva.

According to the State Energy Efficiency Agency, from the beginning of 2022 to October 2023, 360 MW of thermal energy production capacity using alternative fuels was introduced. This is approximately EUR 72 million of investments in the economy. At the same time, agricultural waste is one of the main sources for the production of liquid and solid biofuels. The State Energy Efficiency Agency has implemented several initiatives from 2021 to 2023 to reduce the tax on land for agricultural producers who will use it to grow energy plants, as well as establishing a zero rate of tax on CO2 emissions for producers working on biofuel. According to the published calculations, the installation and heating of a boiler room using biofuel on a plug, for example, allows significant savings — 1 Gkcal of gas costs UAH 4,800, 1 Gkcal of heat supply on a plug — 2,000 UAH. In the greenhouse of Bilotserkiv district in Kyiv region, the production of 1 Gcal from straw is UAH 1,000, which, compared to wood, is twice as cheap.

By the way, Japan plans to provide Ukraine with biofuel production technology to support the country's reconstruction efforts after the war with Russia. As Kyodo News reports with reference to informed sources in the Japanese government, the corresponding plan will be presented next month in Tokyo at a meeting of representatives of the public and private sectors of the two countries to discuss support for the recovery of Ukraine. Official Tokyo expects that biofuel production technology will create a new industry in Ukraine, rich in resources that can be used as fuel.

Japanese firms are expected to agree to provide renewable energy production technology and related equipment at the Japan-Ukraine Economic Reconstruction Promotion Conference on February 19. If the creation of a new industry is successful, it will provide promising export products for Ukraine and potentially help increase the country's foreign currency earnings.

By the way, earlier it was said that if Ukrainian agricultural producers are unable to export grain in the face of Russian aggression, they will begin to reduce its production and switch to other types of production, for example, biofuel. At one time, such an opinion was expressed by the president of the Ukrainian Grain Association, Mykola Gorbachev.

"If it will be expensive for our country to export this year, if producers suffer losses or, God forbid, go bankrupt, Ukraine simply will not produce such a large volume of grain. We do not need the 100 million tons of grain that were grown before the war, but we will fully provide for ourselves if we work four times less," he said.

As the president of UZA predicts, in such a case, Ukrainian agricultural producers can concentrate on something else, for example, on the production of biogas or some kind of biofuel.

To a clarifying question, whether producers are already considering the possibility of "jumping out" of grain, Mykola Gorbachev answered: "If it will be too expensive for them to export grain, then they can grow some alfalfa and make biogas from alfalfa. And at the same time, not knowing the problems with export."