Long ago, industrialized nations started to develop the production of bioethanol and biodiesel as part of natural gas substitution, while Ukraine lags far behind in this industry due to excessive fiscal pressure on producers and overregulation of the sector. This was discussed at a roundtable talk entitled “Condition and Prospects of the Development of Production of Bioethanol, Biodiesel and Mixed Motor Fuel in Ukraine,” organized by the Ukrainian League of Industrialists and Entrepreneurs (ULIE) and the State Agency on Energy Efficiency and Energy Saving of Ukraine. Ukraine has significant potential in developing the production of biofuel. Demand for bioethanol in 2020 is expected at 500,000 tonnes – exactly the same figure as stipulated in the national action plan for renewable energy by 2020.
“These are extremely important subjects for Ukraine, as it can help to solve two problems simultaneously. On the one hand, if we together develop powerful bioethanol production, our independence from fuel suppliers will grow. On the other hand, we can start building and reviving the engineering complex – and these are new jobs and capacities to create production facilities to produce means of production, which will be built in keeping with brand new, modern standards that will immediately improve the quality of production, boost the competitiveness of the Ukrainian product, and ensure better positions for Ukrainian exports,” UUIE First Vice President Serhiy Prokhorov said.
According to Prokhorov, it is important that equipment for biodiesel production is manufactured in Ukraine, as it considerably increases the competitiveness of Ukrainian products and their repair capability, and in particular, safeguards manufacturers against forex fluctuations and external suppliers.
Its turn, Chairman of the State Agency on Energy Efficiency and Energy Saving of Ukraine Serhiy Savchuk said that the question of production of liquid fuel for Ukraine is very urgent because “we are as dependent on imported crude oil, petrol and diesel fuel as on gas.”
“Only one of the six oil refineries is in operation now. Therefore the situation needs to be changed dramatically; we need to adopt the experience of Europe and the United States (the agricultural states of Ohio and Minnesota). What is more, that industry there is not subsidized but it has been developing in the United States at a huge pace. There are examples of setting up new generation bioethanol plants able to process cellulose and bulrush,” Savchuk said.
Participants in the roundtable talk agreed with reasons in favor of the development of the biofuel industry and listed the obstacles to why such a successful foreign industry has not developed in Ukraine. These are double taxation and excessive tax pressure, over-regulated licensing procedures and complicated export and import regulations. The following things will have to be cancelled for the dynamic development of bioethanol production: requirements for licensing of bioethanol, bills for its transportation, and excise on biodiesel. What is more, “bioethanol” should be defined as a separate compound chemical product rather than a type of ethyl alcohol.
The attendees will summarize their proposals regarding removing barriers to the development of the bioethanol industry and will send them to the Verkhovna Rada to amend the legislative base.
