The development of biomass and biogas combined heat and power plants (CHPPs) in Ukraine is hindered by the unprofitability of heat supply to household consumers, carbon dioxide tax for biomass boiler facilities, and the lack of an organized commodity market.
The relevant statement was made by Bioenergy Association of Ukraine Board Chairman Georgii Geletukha in a commentary to Ukrinform.
According to Geletukha, the total capacity of bio-CHPPs in Ukraine is currently about 310 megawatts.
“The construction was spurred by the ‘green tariff’, but there are serious delays with the payments,” Geletukha said.
In his opinion, heat sales from CHPPs can be commercial – traditionally, these are plants built by enterprises to meet their own needs. Such projects are cost effective. The situation is different when it comes to the supply of heat to household consumers.
“Both gas and heat are subsidized for household consumers. Thus, heating is sold at a fixed price, and there is no economy there. This does not add anything to profitability,” Geletukha explained.
Another barrier to the development of bio-CHPPs is the carbon tax imposed on biomass and biogas boiler facilities, which is not the case in other countries.
Additionally, as emphasized by the expert, Ukraine does not offer any organized commodity trading for bio-CHPPs.
“There are administrative problems: where and how to buy biomass, what are the guarantees of supply, what is its quality. Our market is unregulated, and this is also a serious barrier,” Geletukha added.
In his words, the Ukrainian Energy Exchange (UEEX) is showing interest in an organized biomass trading. But, first of all, it is necessary to make legislative amendments.
“A law is needed to create a biofuel stock exchange. Then, a tender will be held to select an exchange operator from among the existing platforms,” Geletukha noted.
According to him, it is reasonable to oblige forestry enterprises to supply half of their biomass waste to the exchange, which should guarantee the availability of such product.
A reminder that Ukraine’s first CHPP running on woodworking industry waste was built in Zhytomyr in 2024. The plant has a power capacity of up to 1.2 megawatts and a thermal energy capacity of 7.1 megawatts, and provides 73 apartment blocks with heat supply services.
Source: Expert outlines reasons for poor development of bio-CHPPs in Ukraine
