The Ukrainian biogas sector has potential in terms of both the availability of raw materials and the demand for biogas. The total annual energy potential of biogas/biomethane production in Ukraine is estimated at 21.8 bcm СН4 (18.7 toe). The main production of biogas/biomethane can be achieved due to the use of agricultural crop residues, increasing the area under energy crops, as well as developing the practice of growing cover crops.
Currently, there is a great interest in the production of biomethane from large agricultural companies that have sufficient amount of their own raw materials. The first Ukrainian biomethane was generated by Gals-Agro company in March 2023. This happened on the basis of one of the company’s six biogas plants with total installed capacity 14.7 MW. The company has intention to sell biomethane to European traders and has already obtained ISCC certificate.
It is expected that by the end of 2023, up to 5 new biomethane plants with a total annual capacity up to 70 million m3 may be commissioned in Ukraine. So, the first Ukrainian biomethane plants were built even during the active phase of the war.
By 2025, biomethane production can be at least doubled compared to 2023, and in 2027 it can reach 250 million m3. Under certain conditions, the first of which is the cessation of military invasion on the territory of Ukraine, the production of one bcm of biomethane in 2030 can be considered as an ambitious but achievable goal.
Biogas/biomethane may be partly used as raw biogas for combined heat and electricity production. The biggest part of biogas could be upgraded to biomethane. It is expected that Ukrainian biomethane will be important as export product to European countries.
In August 2023, the Verkhovna Rada of Ukraine amended the law “On State Support of Investment Projects with Significant Investments in Ukraine”, including a provision on state support of businesses with significant investments. The law covers biogas and biomethane projects. These significant legislative changes will facilitate the construction of new biogas and biomethane plants by making them more attractive to potential investors due to:
- exemption from income tax for 5 years,
- exemption from VAT and import duty upon import of new equipment and components,
- exemption from payment of land tax.