“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.