Ukraine has the potential to increase bioethanol production to 1 million tonnes per year, which could generate around $1.5 billion for the economy. To realise this potential, industry associations are calling for an overhaul of state regulation of the sector and the removal of barriers that are holding back its development.
According to the Ministry of Economy, Environment and Agriculture, the ministry will support regulatory changes, as it considers the sector vital for attracting investment, boosting domestic processing of agricultural raw materials and aligning with the European ‘green’ agenda.
The role of bioethanol and its production
Bioethanol is already a component of motor fuel. However, its use is not limited to this. The substance is a key component in the development of deep processing, the production of biogenic CO₂, high-protein animal feed, industrial chemicals, and sustainable aviation fuel (SAF).
The state of the industry and forecasts in figures
Currently, 10 out of 17 licensed producers are operating in Ukraine. Nevertheless, even this has enabled production capacity to increase by 160 per cent over the course of a year. At present, Ukrainian bioethanol plants produce 180–200 thousand tonnes of bioethanol annually. However, if all existing capacity were brought online, these figures could well double.
The development of the bioethanol production sector has a direct impact on demand for agricultural raw materials. The Ministry of Economy cites data showing that a single plant with an annual capacity of 100,000 tonnes of bioethanol requires up to 350,000 tonnes of biomass, such as maize. Therefore, the greater the production capacity, the greater the incentives for the domestic agricultural sector.
Building a plant of this capacity requires $50–100 million. The sector’s total investment potential exceeds $300 million.
Another positive factor is the creation of new jobs. A single plant requires up to 150 specialists to operate. A further 1,000 or so workers will find employment in related sectors.
“The legislative changes proposed by relevant associations will reduce the administrative burden on business, promote the development of domestic processing, attract investment, and accelerate European integration. We support decisions that help producers operate more efficiently and create greater added value in Ukraine,” said Taras Vysotskyi, Deputy Minister of Economy, Environment, and Agriculture.
EcoPolitic reported that from July 1, Ukrainian filling stations were required to switch to the European E10 standard, which means a mandatory share of 10% bioethanol in gasoline. The relevant association states that this will help reduce emissions from motor vehicles and standardize daily use of biofuels.
