Ukraine’s Biogas Market

Ukraine’s Biogas Market

Ukraine acquires the bulk of its fossil fuel through importation. To minimize the cost of these imports and to create employment within its homeland, the government established renewable energy production plants. This also led to the production of biogas. Let us take a closer look at Ukraine's biogas industry.

Why Biogas?

The production of biogas is essential in any country. It helps to manage animal waste which, if unused, increases methane levels in the atmosphere. The industrial procedures of obtaining this energy source are eco-friendly. No harmful by-products are released into the environment. These and other reasons have made it easier for the Ukrainian government to endorse biogas production. Below are other advantages of biogas production.

✓ The by-products may be used to produce fertilizers
✓Job creation
✓Alleviation of the energy crisis


Currently, the production of electricity using biogas in Ukraine has not yet reached its full potential. At the beginning of 2017, around ten major biogas production plants existed in Ukraine. For a country with a population of just over 40 million people and over 600,000 km² of land, the number of plants may be referred to as low. The growth in this sector will depend on several factors. These vary from capital input by investors to increased agricultural activity. Detailed information on this factor will be given in the section below.

Currently, about 20 smaller biogas plants are built all-around Ukraine. Half of these plants generate electricity from animal waste and the other half from by-products of sewer plants. Altogether, the biogas plants generate about 3% of Ukraine’s electricity.

Ukraine’s Biogas production potential

As mentioned earlier, Ukraine has land over 600,000 km², with a quarter of it being very fertile. This presents Ukraine with an opportunity to become one of Europe’s leaders in agriculture. With a healthy population of 40 million people, the market and manpower for agriculture are abundant. With vast agricultural projects, plenty of renewable energy sources become available. These range from animal carcasses to waste vegetation. All these facts present a promising future for Ukraine’s biogas production plans.

Biogas production rationale

Ukraine had plenty of reasons to start biogas production. The first and probably most obvious was to secure an energy source for the present and future. Additionally, Ukraine had been importing gas from neighboring Russia. To save itself from the financial hassles associated with imports, Ukraine decided to produce its gas. Other reasons include satisfying the energy requirements and conserving the environment. The country also has different agendas to be addressed. Cutting down on imports and saving money in the process ensures that the government has ample resources to attend to these agendas.

Government incentives

To encourage electricity production using biogas, the Ukrainian government offered several incentives to organizations wishing to invest in biogas production. The government will exempt VAT from people acquiring machinery and materials used in the construction of biogas plants. In special cases, import duty is also exempted. The government will pay power plants good money in tariffs to promote electricity production using renewable resources.


We have spoken of the great potential that the production of biogas has in Ukraine. We have talked about how the development is still in its early stages. This all begs the question, is it a good idea to invest in biogas production in Ukraine? While a lot more research needs to be done to decide whether this is a worthwhile investment eventually, it generally looks promising. Many sectors, such as agriculture, need to boom a bit more to support renewable resource production. This, however, does not overshadow the fact that there is great potential in Ukraine.

The Ukrainian government has called for nearly 16 million Euros worth of foreign investments. This shows the amount of confidence they have in the potential their country has in biogas production. This industry's potential has sparked the interest to invest in sectors like construction, heavy machinery, and agriculture. This all works well for the Ukrainian population as they are set to gain from all this intervention.


Ukraine may very well be on its way to being called a formidable force when it comes to the production of biogas. A lot of work needs to be done. The first order of business is to increase the rate of the growing agricultural awareness in the country. The relationship between biogas production and agriculture cannot be ignored. Fortunately for the country, the government has sought out investors and even offered incentives supporting the growing industry. This will prove to be a very worthwhile investment in the long run, as financial returns will inevitably manifest in the future.


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