Ukrainian agrarians can enter a new niche — suppliers of gas to the European market. This refers to biomethane — not just ‘green’ fuel, but a real export product for which payment is received in hard currency. Ukraine has already taken a step forward: the first biomethane production installations are already in operation, and their number is expected to increase each year. Interesting.

Ukrainian farmers can enter a new niche — suppliers of gas to the European market. It’s going about biomethane – not just a “green” fuel, but a real export product, which is paid for in hard currency. Ukraine has already taken a step forward: the first installations for the production of biomethane have already been installed are working, and every year there should be more of them. It is interesting that even Poland, which is a member of the EU, does not yet have a single such enterprise.

However, it is important for farmers to take into account not only agrotechnical conditions, but also infrastructure. As prompts Georgy Heletyukha from the Bioenergy Association, it is more profitable to start production near main gas pipelines. This will make biomethane transportation cheaper and export more profitable.

There are already five Ukrainian companies working in this field — and all of them are focused specifically on the foreign market. For Ukraine, this is a new energy game with great economic potential, in which farmers can play not the last role.

Ukrainian biomethane: an agricultural weapon against energy dependence

Ukraine, known for decades as the granary of Europe, today has a chance to become its energy donor. And not thanks to coal or oil, but thanks to biomethane – gas born from manure, silage and food waste.​

Ukrainian farmers are already active use animal husbandry, crop and food industry waste for biomethane production. This not only allows reducing the amount of waste, but also creates new sources of income for farmers.

Biogas, what is formed as a result of anaerobic fermentation of organic waste, contains about 50-70% methane. To obtain biomethane, this gas is purified from impurities – carbon dioxide, hydrogen sulfide and water vapor, increasing the concentration of methane to more than 95%. This allows the use of biomethane as a full substitute for natural gas in existing gas networks.​

Ukraine in 2023 confirmed state standard DSTU EN 16723-1:2023, which meets European requirements for the quality of biomethane. This opens a window of opportunity for the export of Ukrainian biomethane to the countries of the Eurozone and integration into the European energy market.

According to experts, Ukraine has the potential to produce up to 20 billion m³ of biomethane annually, which can cover a significant part of domestic gas consumption and ensure export to Europe. This will contribute to the energy independence of the country and strengthen its position on the international energy market.​

How much does it cost to start a biomethane plant and who invests

When talking about strategic security, farmers are rarely mentioned. But today they supply not only grain and milk, but also gas. And not the one that comes from the north, but the one that is born on Ukrainian farms from manure, pulp and silage. It is biomethane today turns into on the powerful weapon of energy independence, and it is farmers who enter the game, which until recently seemed to be the business of monopolists and state giants.

The construction of a full-fledged biomethane plant in Ukraine costs about 15-16 million euros, if you start from scratch and create production with a capacity of 10 million cubic meters per year. If the already existing biogas plants are modernized, then we are talking about much smaller amounts – up to 5 million euros. These are not cheap projects, but also not fantastic money in energy, which has a chance to become completely independent from Russia.

Serious institutional players are joining this game. The EBRD is already financing Ukrainian biomethane projects, starting with loans of three million euros. There is the Decarbonization Fund of Ukraine, which gives grants to those who want to replace imported gas with their own biomethane.

However, this is not ecology, but the economy of war. Because every cube of Ukrainian biomethane is minus a cube of Russian gas. And this is already a tactical game. You cannot put a biomethane plant “where you want”: the price of connecting to a gas pipe can reach 2.5 million hryvnias for one kilometer. Now the new geography is not where the soil is more fertile, but where the pipe is closer. This is no longer just an agrarian strategy — it is an infrastructural war.

The market at the same time is working according to strict but attractive rules: the price of biomethane in Europe is 900 euros per 1,000 cubic meters, profitability is up to 30%, payback is up to four years. Gals Agro already supplies biomethane into the gas transport system. These are not startups, but large agricultural producers with resources, strategy and vision.

It is Gals Agro that shows what this new energy looks like. The company modernized two biogas stations in Chernihiv and Kyiv regions and now annually produces 6 million cubic meters of biomethane from silage, pulp, chicken droppings and starch production waste. Investments amounted to 4 million euros. And the selling price is €1,500 per thousand cubes, thanks to the contract with the Dutch company STX.

Another example is the Yuzefo-Mykolaiv sugar factory in Vinnytsia. Here is the company “YUM LIQUID GAS” unfolded production of liquefied biomethane — BioLNG — with a capacity of 11 million cubic meters. Raw materials – beet pulp, chicken droppings, tops, roots. This is the first such enterprise in Ukraine, which is already negotiating with potential customers from Germany, Denmark and the Netherlands.

But the biggest player on this list is Theofipol Energy Company LLC. Plant in Khmelnytskyi region will have capacity of 56 million cubic meters of biomethane per year. It’s not easy transition on the new model is a strategic connection to the high-pressure HTS. This is the largest volume of biomethane production in Ukraine. And next to it is another Khmelnytsky player, the VITAGRO group of companies, which invested 6 million euros for the production of biomethane and 80,000 tons of organic fertilizers that can replace mineral fertilizers on an area of ​​more than 1,500 hectares.

Currently, there are three biomethane plants operating in Ukraine, and by the end of the year there will be at least seven of them. And the total volume of production will reach 111 million cubic meters. Ukraine does not just build factories — it seizes the initiative. When biomethane appears in the Ukrainian gas transmission system, it is already an energy counterattack in response to Russian gas blackmail.

This year, in February, the company Vitagro carried out what a year ago seemed like a political fantasy: exported biomethane to the EU, to Germany, through the Ukrainian gas network, with documents, customs and… real money. The scheme passed all stages: internal certification, register of origin, customs clearance, transportation to the EU GTS.

This is not just fuel, but a Ukrainian footprint in Europe’s pipeline. Transfer of biomethane is happening through the Ukrainian GTS: through interconnectors with Poland and Slovakia. After biomethane production hits into the system, from there either to gas storage facilities, or directly to the EU.

And what’s important: you don’t need to connect to the trunk for exporting. The installation can work through the local gas distribution network, and from there it can rise to the export level.

Last year, the Ministry of Finance published Order No. 380, which actually unblocked the customs clearance of biomethane. That is, farmers now have the right not just to produce gas, but to sell it to Europe, get money and pay taxes here. The question is who will take the initiative: the agrarian or the state?

Ukraine has more than 100 billion cubic meters of theoretical biomethane production potential. This is twice as much as the annual domestic consumption. That is, we can become a net exporter, but so far only the first pilot contracts.

State policy in this area

Biomethane is not just a new product on the agricultural market. This is a test of the state’s ability to see energy as a weapon, not just a tariff. In a country that pays for freedom in blood every day, any decision about energy independence is not only about the economy, but also about the front. And that is why it is necessary to realize that does  and what the state is not doing in the biomethane sector.

In 2021, the Verkhovna Rada adopted Law No. 1820-IX on the development of biomethane production. Law provides launch of the biomethane register, mechanism of guarantees of origin, simplification of exports. This is the basis for certificates, which in Europe allow to prove that the gas is really “green”.

In 2022, the Cabinet of Ministers confirmed the order of operation of this register: now Ukrainian-produced biomethane can be entered into the database, a certificate issued, and… theoretically sold to Europe. That sounds like a breakthrough. But no farmer lives by the declaration. He lives by the market. And here the risk zone begins.

At the level of infrastructure, the state took another important step: the NCRECP in August 2022 contributed changes to the GTS codes and gas distribution networks. This made it possible to connect biomethane to the national gas network.

In particular, there was increased permissible oxygen content in the gas, which technically made biomethane suitable for supply.

This is not just bureaucracy, this is a game changer. Biomethane from the farm can now go into the gas grid, meaning a new type of economy is emerging.

Currently, there are no special tax incentives or subsidies for biomethane producers there is no. And this is the key problem. Business says: “We are ready to invest. But give us at least some predictability.” However, there are steps forward. In 2024 approved Law No. 3613-IX, which regulated customs control and rules for the export of biomethane. Simply put, it’s easier now export gas abroad, and not sell only on the domestic market.

Even a year ago, all biomethane production projects in Ukraine were initiated by private businesses. Not by state CHP, not by Naftogaz, but by farmers. Farmers who install a plant for 15 million euros and look for a pipe, a certificate, a buyer, a forwarder themselves. And most importantly, all of them are export-oriented. Because in Ukraine, the state has not created a system that would allow profitable sale of biomethane on the domestic market.

Biomethane is an energy that can be completely Ukrainian. This is a replacement for Russian gas, coal, it is a replacement for powerlessness. But this requires not only a resolution, but a policy. Financial incentives are necessary (in particular, a “green tariff” type initiative), a state co-financing program for connection to the GTS, as well as a national biomethane export strategy agreed with the EU.

Because if this is not done, the farmers themselves will become exporters, and we will remain importers. So far, biomethane comes from only 5 enterprises. If there are 50 of them, it will become a threat to Russian Gazprom. The question is whether our state will understand this before Putin does.

…Next time we will consider whether the Ukrainian HTS is ready to transport biomethane, and what is needed for this. Yes, technically capable. But the required cleaning, compression and quality control is expensive and must be close to the pipeline. The closer the farm to the pipe, the lower the costs. The connection is made by the GTS Operator, all costs are borne by the manufacturer.

Biomethane reduces methane and CO₂ emissions because it processes waste. It can partially replace gas and coal in the agricultural sector — for heating, drying, and energy.

Leftovers go to fertilizers, heat, and electricity. The role of farmer cooperatives is growing, new jobs are appearing in the villages.

Poltava region, Vinnytsia region, Lviv region are already among the leaders. Ukraine has the potential to build hundreds of biomethane plants and become a technological leader — provided the internal market is created and connections are simplified.

Tetyana Viktorova