The perspectives of Ukrainian biofuel branch

The biofuel branch today is a promising segment in the energy sector of Ukraine. Performance in terms of consumption of biofuel resources suggests that the demand for biofuel is growing.

As the analysts of Ukrainian Biofuel Portal say, the growth in production of biofuel in 2012 will amount to 5-6%. It is planned to obtain more than 1.2 billion kilowatt hours of energy from the alternative sources. Last year the capacities allowed to produce 360 ​​million kilowatt hours.

Ukraine has a good chance to become a promising exporter of biofuels, mainly in Europe.
The most promising segments in the energy sector are solar energy and hydroelectricity, which will increase power rates at least twice.

The production of solid biofuel will comprise the greatest share of total biofuel production (about 650,000 tons).

The major constraints of the biofuel industry are:

• outdated energy system, focused on nuclear and thermal power plants;
• ambiguity of the state in the taxation policy on products of "green" enterprises;
• the state releases companies from the VAT on raw materials, but they will still have to pay tax share for the final biofuel product.

Another interesting point is the emergence of law in the Tax Code of Ukraine, which obliges companies to use 15% of domestic raw materials and human resources in 2012, 30% - in 2013 and 50% - in 2014.  The experts say that at the beginning this form of support for Ukrainian share in the biofuel production will be realized easily. But in the future new technologies should be applied in order to increase the pace of development of alternative energy.

According to Ukrainian Biofuel Portal, the attention should be paid to the waste management of the agricultural sector and wood industry to improve the energy efficiency of municipal services and the agricultural sector.