Ukraine’s Promising Biomethane Potential Could Transform the European Energy Market

by Roman Cheplyk
Tuesday, April 23, 2024
Ukraine’s Promising Biomethane Potential Could Transform the European Energy Market

Oleksiy Chernyshov, head of Naftogaz Group, highlighted Ukraine’s substantial biomethane production potential during the first Ukrainian biomethane forum in Kyiv

According to Chernyshov, Ukraine could produce over 20 billion cubic meters of biomethane annually, positioning it as a significant player in the European energy market.

The forum, hosted on Naftogaz's website, revealed that Ukraine not only satisfies its natural gas requirements but also sees biomethane as a viable alternative energy source with considerable export potential. Chernyshov elaborated on Naftogaz's strategy to drive the biomethane sector's growth, including leveraging the company's gas transportation and storage systems to support this initiative.

"Naftogaz is prepared to buy the current biomethane production and use our infrastructure to facilitate its distribution," Chernyshov stated, underscoring the company's commitment to the emerging sector.

Regions like Kyiv, Vinnytsia, Poltava, and Cherkasy are identified as especially promising for biogas development, according to Naftogaz. This development is crucial as it aligns with global movements towards decentralized, eco-friendly energy solutions.

At the forum, Geoffrey Payette, the G7+ group coordinator for energy sector support in Ukraine, stressed the strategic importance of diversifying energy sources, especially in the context of Russia's use of energy as a geopolitical weapon. The move towards a decentralized and clean energy model is pivotal for enhancing Ukraine’s energy system's flexibility and reliability.

European Commission officials, including Vice President Marosh Šefčovych and Energy Commissioner Kadri Simson, expressed the EU’s interest in collaborating with Ukraine in the biogas sector, acknowledging the progress in regulatory alignment that facilitates market integration.

Deputy Minister of Energy of Ukraine, Mykola Kolisnyk, noted that legislative amendments have been enacted to enable the customs clearance and export of Ukrainian biomethane to the EU, along with adapting the gas distribution network for biomethane transportation.

Despite these optimistic developments, the current economic viability of biomethane production in Ukraine remains challenging. Production costs range between €800–€900 per 1,000 cubic meters, significantly higher than natural gas prices, which are about €350 per 1,000 cubic meters. This cost disparity has led some agricultural holdings to cease biomethane production.

Nevertheless, the diverse applications of biomethane—from replacing natural gas to fueling transport and providing raw materials for the chemical industry—highlight its potential to contribute to energy diversification, the transition to clean energy sources, and attract significant investments.

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