The Ministry of Energy of Ukraine has published a draft law “On the amendment of certain laws of Ukraine on the development of production and consumption of biomethane”.
Adoption of the draft law will help create a transparent biomethane market in Ukraine, increase biomethane production, reduce natural gas imports, use the Ukrainian gas transportation system to export biomethane to EU countries, increase the economic attractiveness of bioenergy projects for potential investors, including foreign ones.
Adoption of the law will allow:
- to create a transparent market for biomethane in Ukraine, as purified biogas is called in European practice,
- increase biomethane production,
- replace the consumption of natural gas in the production of heat and electricity,
- reduce natural gas imports,
- use the Ukrainian gas transportation system to export biomethane to EU countries,
- increase the economic attractiveness of bioenergy projects for potential investors, including foreign ones,
- reduce greenhouse gas emissions.
In addition, it will contribute to the achievement of the goals of the Energy Strategy of Ukraine until 2035 and the fulfillment of Ukraine’s commitments to reduce greenhouse gas emissions under the Paris Agreement.
The current situation
At the beginning of 2021, there are 53 plants in Ukraine that produce energy from biogas and operate at a “green” tariff. The total electric capacity of these plants is 103.4 MW.
The total gross production of biogas in 2019 is estimated at about 100 million nm3 / year, and only 34% of the energy potential of this biogas is converted into useful electricity (156 GWh) and heat (128 TJ).
Thus, today the pace of development of the electricity generation sector from biogas can be considered insufficient
Thus, today it is technically possible to supply biogas to the gas transmission or gas distribution system, and the producer of purified biogas will be considered as an independent producer of natural gas in the unregulated segment.
However, in the current legislation of Ukraine there is no mechanism for verification of biomethane to ensure its further supply to the gas transmission system and there is no definition of biomethane.
Adoption of the draft Law will provide an opportunity to verify purified biogas (biomethane), the physical and technical characteristics of which meet natural gas standards, and provide guarantees of origin for a certain amount of biomethane supplied to the gas transmission system, and then generate heat and electricity at cogeneration plants.
In this case, the manufacturer will be able to use gas from the gas transmission system in the amount stated in the guarantee of origin of biomethane.
The proposed mechanism for the development of the biomethane market and electricity production from biomethane will expand the opportunities of biomethane producers to sell electricity and heat directly to the consumer, as well as increase energy efficiency of biogas utilization and increase the economic attractiveness of biogas projects for potential investors.
In addition, the adoption of the draft law will launch the biomethane market by providing guarantees of origin to producers of electricity/heat when purchasing/selling biomethane.
The draft law also provides for the introduction of a procedure for the functioning of the biomethane register and the identification of the central executive body that will maintain the relevant register.
To achieve the outlined goals, the draft law envisages making appropriate amendments to the laws of Ukraine “On Alternative Fuels” and “On the Natural Gas Market”.