Pellet market in Ukraine has "overheated"
The problems in the energy sector of Poland, which began to appear at the beginning of the year, have finally affected the production and use of solid biofuels in the country. Due to the budget constraints the Polish government stopped subsidizing companies operating on the mixed fuel. As a result, in 2013 the volume of pellet purchasing by Polish heat generating stations was reduced by half. For many years Ukraine has imported to Poland the biggest part of the produced biofuels. Now Ukrainian pellet manufacturers and suppliers have to search for the new sales markets frantically so as to avoid bankruptcy.
Polish power plants use more and more traditional energy resources, some of them have already changed over coal solely. Along with that the volumes of Ukrainian pellet purchases reduce, moreover the production companies try to cut down the prices as much as possible. For the time being, not having government subsidies, Polish heat generating companies will pay for biofuels just the sums equal to the amount of heat evolving by burning. For comparison: last year the Ukrainians could sell pellets to Polish firms at the price of 120-125 euro per ton, this year this price has fallen to 92-105 euro per ton.
As a result, Ukraine is losing the main importer of biofuels of wood and agricultural wastes. Only a few Polish power plants continue to acquire Ukrainian pellets and briquettes, consequently an overabundance of such products has formed on the domestic market. According to the info from the leading marketing specialist of Ukrainian Biofuel Portal Sergei Kozlov, only within the spring of 2013 the sales of Ukrainian pellets in Poland fell by more than 20% (compared to the spring of 2012).
The current situation forces Ukrainian pellet sellers to find new customers and increase sales geography without any delay. Primarily the attention of producers and suppliers of solid biofuels has switched over to other EU countries, where the consumption of such products is growing by 30-40% annually.
Today the Ukrainian exporters of solid biofuels already managed to increase their sales in Germany (almost twice) and Italy (2.7 times more). However, these results are not enough yet for keeping the volume of production and sales at least on the same level. According to the experts opinion, the main problem is that the quality of Ukrainian fuel pellets and briquettes still can hardly compete with the quality of the European ones.
