The state of Ukrainian solid biofuel market in 2010

In Ukraine the solid biofuel production is the most developed. More than 200 domestic producers who make solid granules (pellets) and briquettes from different kinds of raw materials (wood chips, straw, sunflower, and rice husks) are working nowadays. In future fuel pellets and briquettes are able to become a better alternative to coal, firewood, and natural gas due to the signing of the Kyoto Protocol.

However, notice that home consumption of this production is actually absent as solid fuel boilers are high-priced so that both of industrial and utility enterprises replace old gas-fired plants with the solid fuel ones unwillingly. Nevertheless, only several projects have been materialized, for example, mini boiler-room working on solid biofuel was installed in the boarding school in the Odessa Region. Experimental plant heats 1500 sq m in sum and, by estimate, saves more than 100 UAH per day.

Still, according to the specialists, there are almost no problems with the export because of high external demand which is in large excess over even theoretical Ukrainian production of solid biofuel. According to available data, some of the foreign companies are ready to buy up to 100 ths. t of wood pellets in Ukraine every month, whereas in 2009 the prime manufacturers of pellets and briquettes exported 350 ths. t of finished commodity altogether (about 10% of the country’s potential output). In addition to that, more than 95% of pellets and briquettes are consigned to EC due to the long-term contracts, that’s why today’s average prices remain practically fixed at preceding year’s level.

In future rising costs of natural gas and public services will be more intensive stimulus for the domestic market of solid biofuel. For example, public service workers run risks in gaining mass household debts of service payment, and the only right thing to do will be a systematic replacement of the gas-fired boilers by the solid fuel ones so as to enable containing prime cost.