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Ukraine has a biomethane plan. Report Wsj

Ukraine has a biomethane plan. Report Wsj

Ukraine wants to exploit its large agricultural industry to transform itself into a biomethane producer. The Wall Street Journal's in-depth analysis

In the middle of a Ukrainian wheat field, a company is making energy from something the country has in abundance: agricultural waste. At a site north of Kiev, local agricultural company Gals Agro captures gas from the decomposition of animal manure, straw and corn husk to produce a type of bioenergy called biomethane. The fuel is then pumped directly into Ukraine's gas network, replacing natural gas in tens of thousands of homes.

The project is at the forefront of Ukraine's ambition to capitalize on waste from its giant agricultural industry to generate green energy that will help Ukraine secure energy supplies away from Russia, foster closer ties with Europe and diversify its war-ravaged economy.


Earlier this year, Ukraine agreed on a strategic partnership with the European Union to promote the production and use of biomethane. According to the Ukrainian Bioenergy Association, energy generated from the country's agricultural waste could provide a third of pre-war domestic gas consumption and become a major supplier to the EU by 2040 – writes the WSJ .

“The potential of biogas in this country is unlimited,” said Serhii Kravchuk, co-founder and CEO of Gals Agro. “This war shows that Ukraine needs more plants if it wants to diversify its energy supply and economy.”

However, Ukraine's bioenergy ambitions face obstacles. The companies say investors have been reluctant to fund projects during the war that saw Russia attack the country's energy infrastructure.

But Ukraine's efforts could serve as a test bed for the rapid and widespread adoption of biogas, which has gained the world's attention in the search for greener fuels. Energy giants such as BP and Shell have recently made acquisitions in the sector, while the United States and other countries have offered subsidies for bioenergy.


According to the Ukrainian Bioenergy Association, at least 10 Ukrainian companies are building or planning new biomethane plants, encouraged by the government and the possibility of creating a new source of income.

Gals Agro began working on its biomethane project before the war, in anticipation of greater demand for clean energy. It continued building even when Russian forces were just over 6 miles from the site and began pumping gas into the Ukrainian grid in April.

On any given day, trucks dumped cow dung and shredded corn cobs into a vast underground vat of bubbling agricultural waste that feeds five large tanks called digesters.

Each digester contains 20,000 cubic meters of brown slurry which is churned by the equivalent of a giant metal spoon. Each year the plant could use up to 5,600 tonnes of grass-rich cow manure, 2,400 tonnes of sunflower sludge and 1,000 tonnes of pig slurry, among other agricultural waste.

When bacteria decompose biological waste, they release a gas that can be used as fuel, just like the gas extracted from the soil. Many bioenergy plants burn so-called biogas to generate electricity. At the Gals Agro plant, carbon dioxide is removed from part of the biogas to leave methane, which burns more efficiently on its own. This biomethane is then pumped into the gas network.

Biomethane's similarity to natural gas makes it compatible with existing gas network infrastructure and can be used as a replacement fuel. This feature will help spur future demand, said Andrew Welfle, a senior climate change researcher at the University of Manchester in England.

Biomethane is considered environmentally friendly because it is produced from renewable organic matter such as plants and is essentially the product of exploiting methane that would otherwise be released into the air when plant waste rots. Plants absorb carbon and can be replanted.

Beyond home heating, the transportation sector could also boost demand for biomethane, said Adam Forsyth, an analyst at investment bank Longspur Capital Markets, particularly for use in cargo ships, where batteries can't store enough energy for long journeys.

The fact that Ukraine is the world's largest exporter of sunflower oil and one of the largest producers of corn and wheat means it has plenty of agricultural waste from which to make bioenergy. Ukraine is also motivated to find new energy sources.


Ukraine previously received much of its gas from Russia, but stopped using it after Moscow's annexation of Crimea in 2014.

The government wants to further consolidate the country's energy independence and supply biomethane to the EU, as part of a broader effort to move closer to the bloc, which is also abandoning Russian energy, said Taras Vysotskyi, first deputy minister of the Ministry Ukrainian for Agrarian Policy and Food.

Overall, the government said Ukraine could produce up to 21.8 billion cubic meters per year of biomethane, without giving a timeline. Before the war, Ukraine consumed about 30 billion cubic meters of natural gas per year.

The EU has set a target of supplying 35 billion cubic meters of biomethane per year by 2030. European production is far below this level, which has opened the door to external suppliers such as Ukraine. Kiev says it can potentially supply up to 20%.

The potential of biomethane as a green and versatile fuel has attracted investment in both Europe and the United States. Shell last year agreed to pay nearly $2 billion for a Danish company that produces gas from agricultural, industrial and household waste. Meanwhile, President Biden has included support for biofuels in the Inflation Reduction Act.


Ukrainian companies, however, have so far found financing more difficult.

Vitagro, an agricultural group based in western Ukraine, used its own funds to finance its biomethane plant. It started the project last summer and expects to send the first gas to the grid in November.

The Gals Agro biomethane plant, along with five other similar facilities that use biogas to produce electricity, cost a total of around $38 million. The company financed the work with a $12 million bank loan and money from Kravchuk and other company owners.

Potential investors say: “Guys, this project is great, but let's talk about it after the war,” Kravchuk said.

(Extract from the eprcomunicazione press review)

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/ucraina-biometano/ on Sat, 16 Sep 2023 05:56:55 +0000.