Ukraine could be Europe’s most competitive biomethane exporter, head of association

Aura Sabadus


LONDON (ICIS)–Ukraine could export as much as eight billion cubic metres of biomethane to Europe annually as the country is in the process of adopting critical legislation recognising its vast potential.

The volume could double if complemented by synthetic gas produced in combination with electrolysed hydrogen, Georgii Geletukha, chair of the Bioenergy Association of Ukraine told ICIS in an interview.

Thanks to its extensive landmass including one quarter of the world’s most fertile soil, Ukraine has unrivalled potential in Europe to scale up biomethane production using agricultural feedstock at minimal costs and export most of the output at a competitive price, he said.

The first step will be the adoption of the draft law on biomethane, registered in May 2021 and expected to have its first reading in parliament in September.

The proposed text should not raise any points of concern, such as the provision of a government subsidy scheme, that could hold up its adoption before the end of the year, Geletukha said.

The draft law merely defines the term, proposes the launch of a biomethane register, namely an electronic database tracking injections and withdrawals from the transmission or distribution system and creates a legal framework for the issuance of biomethane guarantees of origin.


Geletukha says production could start immediately after the law is adopted, noting there are already many high-profile Ukrainian firms, which have expressed an interest in ramping up production.

He said a biomethane plant with an annual production capacity of 10 million cubic metres was the equivalent of a biogas plant with an installed capacity of 4MW and would cost around €10m.

“To inject one billion cubic metres of biomethane into the network annually, we will need 100 plants of 10mcm/year at a total [investment] cost of €1bn,” he said.

This means Ukraine could start injecting its first billion cubic metre of biomethane into the transmission system before 2030 and most of it would be exported to Europe, Geletukha said.

Production could be scaled up to 3bcm/year by 2040 and brought up to a maximum 8bcm/year in 2050, which would amount to 25% of Ukraine’s current annual natural gas consumption.


He explained that in the absence of government subsidies, it would be difficult for biomethane producers to sell domestically, as the cost of biomethane would be around $600-$700.00/1000m3 (kscm) or €500-€600.00/kscm in Ukraine (€48.40-€56.50/MWh), some €20.00/MWh higher than current natural gas prices.

However, since many EU countries offer incentives for biomethane, it is commercially attractive for Ukrainian producers to export most of the generated volumes.

He said the cost of biomethane in European countries was also much higher than in Ukraine, ranging between €700-€1,000/kscm, which would give Ukrainian biomethane a competitive edge.

Geletukha said some production could also be snapped up by domestic metallurgical producers particularly if the EU introduces a high carbon border adjustment tax for industrial products imported from non-EU states such as Ukraine.


The carbon dioxide emitted into the atmosphere when producing biomethane would be abated because it is absorbed back when producing biomass – the raw material required for biogas and biomethane.

However, Geletukha explained the emitted carbon dioxide could be further combined with electrolysed hydrogen to produce synthetic gas. At its peak, the combined biomethane and resulting synthetic gas could help Ukraine produce as much as 16bcm/year.

“If we locate a biomethane plant near a hydrogen production electrolyser, we can create synthetic methane from hydrogen and carbon dioxide which would then be injected into the gas grid,” he said.

Ukraine is also in the process of developing its hydrogen industry and has been conducting numerous tests, injecting hydrogen at various grades into the distribution system.


Last week, the European Bank for Reconstruction and Development (EBRD) said it had signed an agreement with the Ukrainian gas transmission system operator GTSO for the development of hydrogen supply chains

However, unlike hydrogen, whose molecules are much lighter than those of natural gas and can be corrosive to steel pipelines, biomethane has the same calorific value and structure as natural gas.

Hydrogen is also likely to be more expensive to produce, with the cost of electrolysed hydrogen produced using renewable forms of generation such as wind and solar estimated at $6-$7.00/kg or around $2,100/kscm (€170.00/MWh), Geletukha said.

Even so, Ukraine is considering all its options, expecting to make use of its vast transmission and distribution system for natural gas, currently Europe’s largest, throughout the upcoming energy transition.

Speaking to ICIS, Oleg Nikonorov, CEO of the Regional Distribution Company (RGC), said RGC had been conducting laboratory tests in recent months, introducing various blends of hydrogen into the natural gas distribution system.

“We found out it’s definitely doable to inject hydrogen at a 20% blend into the gas distribution system,” he explained.

However, he pointed out that biomethane injections into the actual distribution grid may happen much faster than hydrogen.

He said RGC had been approached by the Bioenergy Association to discuss the possibility of biomethane injection in the distribution system.

“Biomethane injections will happen much faster than hydrogen because it’s basically the [same] methane molecule. We just need to make sure it [biomethane] fits the standards,” Nikonorov said, pointing out it was technically possible to connect any biomethane-producing plant to the distribution grid and ship it to end consumers.


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