“Biomethane trade should become a part of German-Ukrainian cooper­ation for the green transition”

On June 15^th, LibMod organized a Round Table on the prospects of a German-Ukrainian biomethane cooper­ation where the repre­sen­ta­tives from politics and business as well as experts from both countries discussed the potential of biomethane production in Ukraine, its role in facil­i­tating a green transition, and economic and legislative challenges for the trade development.

Deputy minister of energy of Ukraine, Mykola Kolisnyk, Members of the Energy Committee of the Ukrainian Parliament, repre­sen­ta­tives of the German-Ukrainian Energy Partnership, repre­sen­ta­tives of industry and energy experts from both countries, as well as a repre­sen­tative of the EU delegation to Ukraine took part in a discussion that opened a whole range of complex questions concerning the potential of biomethane and the hurdles standing in a way of the bilateral trade.

Why is biomethane important for a green transition?

Biomethane is a renewable equiv­alent of natural gas and is virtually CO₂ neutral: During combustion, it releases only as much CO₂ as the processed plants sequestered during their growth. Since it is chemi­cally identical to natural gas, biomethane can be used to produce thermal and electrical energy, for cooking, and as fuel for vehicles the same as natural gas. It can also be used as a raw material for the chemical industry.

By converting domestic waste and agricul­tural by-products into energy, while ensuring the recycling of nutrients to agricul­tural land, biomethane production showcases as an excellent example for a circular economy and as a renewable source of flexi­bility, biomethane can effec­tively support the expansion of wind and solar power.

Replacing natural gas with biomethane can be one of the potential paths on the way to phasing out fossil fuels and would contribute to enhancing energy security.

Ukraine’s potential for biomethane production

With the largest area of agricul­tural land in Europe, Ukraine boasts signif­icant potential for biomethane production and can supply the cheapest raw materials for it. Ukraine’s biogas (that can be refined to biomethane) is produced from animal waste, harvest residues of agricul­tural crops, solid household waste, sewage sludge, corn silage, cover crops and other materials.

According to REPowerEU, the European Commission’s plan to produce clean energy and diversify energy suppliers, the EU needs 35 billion m³/​year of biomethane in 2030. Ukraine can poten­tially provide up to 20% of this need.

There are 77 biogas plants in Ukraine, and the first biomethane plant was opened in Chernihiv region, which was liberated from the Russian invaders last spring. The plant started operation in April 2023 on the base of the existing biogas plant. There is no need for building new infra­structure, as biomethane is effec­tively injected into the existing natural gas grid.

More biomethane plants are planned to open already this year. However, these plans might be frozen if the import to the EU is not possible, which is currently the case. Although there is no formal ban on biomethane import unlike natural gas (due to the war), there are still several restric­tions on the customs part, which make import virtually impossible.

Despite the ongoing war, Ukraine estab­lished its biomethane register in January 2023 for documenting the volume of biomethane submitted to the gas trans­mission or gas distri­b­ution system, forming guarantees, and providing certifi­cates of origin of biomethane.

Obstacles to the import

While there is a big demand and willingness in Germany to import Ukrainian biomethane, it is currently impos­sible to start cooper­ation in this area. Though most obstacles are of economical nature and not regulatory, some hurdles (like customs challenges, the prohi­bition of importing biogas through a pipeline, etc.) make biomethane import from Ukraine impos­sible. Also, to make it a relevant business case, Ukrainian biomethane must be certified under German regula­tions to fit in the subsidy scheme.

A case of the German-Danish bilateral agreement can be a good prototype for cooper­ation in the field of biomethane. Dena, which operates the German Biogas Register, and Energinet, which operates a biogas register for Denmark, have a mutual acknowl­edgment of biomethane certi­fi­ca­tions from both countries. For customers of both registers, this facil­i­tates the cross-border transfer of biomethane.

At the same time, an EU-wide solution to remove existing trade barriers for importing green gas from Ukraine is also being sought.

The huge potential that Ukraine, as Europe’s biggest agricul­tural land, has for bioenergy should be developed as a part of a sustainable recon­struction and moderni­sation. Ukrainian business is ready to invest and expand the production as of now, even in regions close to the border with Russia or Belarus. Germany and the EU can play an important role in this process by fostering trade relations and carrying out the green transition together with Ukraine. To enable this, political will from both sides is needed to tackle the legislative challenges that impede the devel­opment of biomethane trade.

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