Ukrainian producers encounter several challenges typical of emerging markets. This is due to the unsettled legislation, the fear of officials to take responsibility for the necessary decisions, the lack of regulated procedures and the absence of answers to arising practical questions.
In addition, there is a ban on the export of natural gas during the war in Ukraine. After construction work, installing equipment and spending a lot of money, potential biomethane producers are faced with the fact that they can not export their product. In conditions of low natural gas prices and lack of incentives for biomethane consumption on the domestic market, it is impossible to sell biomethane profitably in Ukraine. Therefore, the only option for project developers is to supply their biomethane to the European market.
The second issue faced by the first Ukrainian producers of biomethane is the sceptical attitude of the natural gas system operators towards biomethane. The result is a long process of signing technical agreements that regulate the relationship between biomethane producers and gas system operators. Despite the fact that the standard agreement is written in the code of gas distribution and gas transportation systems, often biomethane producers have to wait over 4 months to finalise agreements with gas system operators.
Nonetheless, despite such difficult conditions, a new branch of Ukrainian biogas industry is rising.
