Transnational Workshop: Trade of Biomass in Central Europe 5 October 2010, Vienna Biomass trade flows from Ukraine to Central European countries Tetiana Zheliezna SEC Biomass, Kiev
Contents q Potential of biomass in Ukraine q Pellets and briquettes: production and sale q Domestic biomass market q Production and sale of rapeseed q Future opportunities for export: - Biogas - Energy crops - Bioethanol q Conclusions
Energy potential of biomass in Ukraine (2008/2009) Energy potential, Mtce Types of biomass Theoretical Technical Economic Straw of grain crops 20,30 10,17 3,31 2,43* Straw of rape 2,94 2,06 2,06 1,34* Residues of production of corn for grain 8,79 6,15 4,31 3,94* Residues of sunflower production 6,68 4,48 4,48 4,36* Secondary agricultural residues 1,13 0,91 0,63 0,65* Wood biomass 2,53 2,07 1,63 Biodiesel 1,38 1,38 0,69 0,45* Bioethanol 3,47 3,47 1,22 1,09* Biogas from manure 3,10 2,32 0,35 Landfill gas 0,77 0,46 0,26 Sewage gas 0,21 0,13 0,09 Energy crops - poplar, miscanthus, acacia, alder, willow - rape (straw) - rape (biodiesel) - corn (biogas) 12,10 1,94 0,92 1,47 10,28 1,36 0,92 1,03 Peat (only renewable part) 0,77 0,46 0,4 10,28 1,36 0,92 1,03 TOTAL 68,50 47,65 33,02 30,58* * Preliminary data for 2009 3
Structure of agricultural lands in Ukraine Lands, th. ha 2004 2006 2007 2008 Arable land 32482 32446 32434 32473 Total sawn area 26752 25928 26060 27133 including: grain crops 15433 14515 15115 15636 industrial crops 4971 6105 5920 6778 potatoes, vegetables and cucurbits crops 2105 2031 1997 1967 fodder crops 4243 3277 3028 2752 Fallow 2330 1866 1625 1413 Unused arable land* 3400 4652 4749 3927 * Difference between the area of arable land and sawn area including the fallow area
State of the art: Pellets and Briquettes market Pellets and briquettes market arose rapidly in 2004-2006 About 90% of the production volume is exported to Europe The market is in the making Mostly spontaneous development. Main drivers: urgent need to utilize agricultural and wood residues; growing price of the fossil fuels Briquette form (% of the production volume): Wood Agr. res. Square 75% 80% (hole) 50 8% 5% 80 7% 10% Rectangular 6% - (press) Octagonal 4% 5% (hole) At present there are about 50 producers of pellets and 155 producers of briquettes (in 2009 many of them were idle because of unfavourable market conditions) No Ukrainian standards. Production is according to the elaborated Technical Specifications
Feedstock available for pellets/ briquettes production Type of feedstock Potential, mill t/yr Price 2009, EUR/t Straw of cereals and straw of rapeseed 7.37* 10-30 Sunflower production residues 8.52 no data Maize for grain production residues 7.69 no data Felling residues, wood processing residues 1.02** 5-10 Sunflower husks 0.34*** 10-25 Peat 0.868 no data * Of the total potential, <1% is currently used in boilers ** Total potential is 1.43 mill t of which 0.41 mill t is currently used in boilers *** Total potential is 0.84 mill t of which 0.5 mill t is currently used in boilers
Production volume of pellets and briquettes in Ukraine Wood pellets FuelAlternative s data Actual production in 2009, th.t: pellets 260, incl. 192 of sunflower husks (74%; +18% to 2008), 44 of wood (17%; -7,1% to 2008), 0.714 of straw (0.3%; no production in 2008). briquettes 90, incl. 30 of wood (33%; -5.2% to l 2008), 22 of sunflower husks (24%; +3.6% to 2008), 1.3 of straw (1.4%; no production in 2008). Forecast for 2010: pellets and briquettes - 450-500 th.t l by D&P Consult Forecast for 2010: pellets and briquettes - 500-520 th.t (Research center Ukrbioenergy )
Pellets and briquettes: International trade Structure of exports of wood pellets, 2009 Poland Slovakia Romania Austria Latvia Poland 67% Lithuania Czech Rep. Germany 8% Italy Belgium Hungary Belize Estonia Denmark In 2009 the exports of wood pellets was 37 th.t (-8.2% to 2008) 84% of the production volume Denmark Slovakia Lithuania In 2009 the exports of wood briquettes was 27 th.t (-4.9% to 2008) 90% of the production volume Source: Germany Structure of exports of wood briquettes, 2009 Romania Poland 17% Czech Rep. Hungary Germany 50% Belgium
Pellets and briquettes: International trade (2) Structure of exports of sunflower husk pellets, 2009 Poland Poland Germany Poland 40% Latvia Lithuania Denmark Czech Rep. Structure of exports of sunflower husk briquettes, 2009 Germany Poland Exports in 2009: husk pellets: 174 th.t (+17.4% to 2008) 90% of the production volume husk briquettes: 21 th.t (+2.7% to 2008) Germany 92% of the production volume straw pellets: 647 t 91% of the production volume straw briquettes: 1261 t 100% of the production volume (Poland) Structure of exports of straw pellets, 2009 Germany Austria Poland Source:
Pellets and briquettes: International trade (3) Major exporters and importers of pellets, 2009 Producers-exporters, region Importer Production / export volume, t Average price, EUR/t Wood pellets Energo Trade Ukraine (Kiev obl.) Italy 2593 / 2334 105 Ekobioprom (Chernigov obl.) Denmark, Germany 4389 / 3990 143 Barlinek Invest (Vinnitsa obl.) Poland 27467 / 25720 96 Sunflower husk pellets Ekodrev (Odessa obl.) Czech Republic 4990 / n.d. 76 Satellite (AR Crimea) Poland 5267 / n.d. 64 Luteks (Lutsk obl.) Poland 6481 / 5833 100 BUNGE Ukraine (Odessa obl.) Germany 41468 / n.d. 47 Transbalkterminal (Odessa obl.) Germany n.d. / 37321 47 Complex Kargil (Donetsk obl.) Poland, Lithuania 49321 / 44389 120 Straw pellets Grinevskaya pellets plant (Sumy obl.) Poland, Austria, Germany 714 / 647 131 Source:
Pellets and briquettes: International trade (4) Major exporters and importers of briquettes, 2009 Producers-exporters, region Importer Production / export volume, t Average price, EUR/t Wood briquettes Trade house Business Format Germany 1943 / n.d. 158 Wood (Khmelnitsk obl.) Germany 1958 / n.d. 108 Furniture plant VESTA Germany 2179 / 1961 133 Kreativ MBN (Vinnitsa obl.) Czech Republic 2228 / 2005 118 Layen (Vinnitsa obl.) Germany 3354 / 3019 127 Sunflower husk briquettes Trade house Aurora Poland 1121 / n.d. 96 Monfort-Ukraine (Kharkov obl.) Poland 2145 / 1930 62 SP Bud (Lvov obl.) Poland 2548 / 2293 69 Company Avangard Torg Poland 4347 / 3912 89 Straw briquettes SUPP Energy ( Ternopol obl.) Poland 1261 / 1261 80 Source:
Denmark Estonia Belize Hungary Belgium Italy Germany Czech Rep. Lithuania Poland Latvia Austria Romania Slovakia Pellets and briquettes: International trade (5) 1 EUR = 10 UAH Average price of wood briquettes (FCA), 2009 Source: Average price of wood pellets (FCA), UAH/t, 2009 Belgium Germany Hungary Czech Rep. Poland Romania Lithuania Slovakia Denmark
UAH/t Pellets and briquettes: International trade (6) wood briquettes Average price of solid biofuels (FCA) during 2009 wood pellets 1 EUR = 10 UAH 01 02 03 04 05 06 07 08 09 10 11 12 UAH/t husk pellets husk briquettes Source: 01 02 03 04 05 06 07 08 09 10 11 12
Poland and Germany market conditions Цены Польше, евро/т Priceнаofпеллеты pelletsвin Poland, EUR/t Price of пеллеты pellets in Germany, EUR/t Цены на в Германии, евро/т 106 250 180 ав г.0 се н. 09 ап р. 09 м ай.0 9 ию н. 09 ию л. 09 ав г.0 9 де к. но я ок т ав г.0 ию 8 150 08 ян в. 09 ф ев.0 9 м ар.0 9 88.0 8 160.0 8 90 8 се н. 08 170 л. 08 92 191,39 188,68 180,17 191,02 9 190 Margin of Polish traders who buy pellets in Ukraine is 25-30 EUR/t. When Ukrainian pellets are re-sold to Germany the margin may come to 70-80 EUR/t 195,78 се н. 09 95,35 ар.0 9 95,1 94,86 94 198,89 204,86 ев.0 9 94,16 94 95,68 08 95,68 08 96 206,68 200,28 200 но я. 08 97,23 ап р. 09 м ай.0 9 ию н. 09 ию л. 09 210 де к. 98,87 98 218,68 217,59 ав г.0 220 99,59 100 ф 101,68 101,17 234,68 229,87 230 ян в. 09 102,78 ок т. 102 236,23 240 103,28 се н. 08 104 м 103,68
Pellets and briquettes: Problems of international trade A lot of plants face the feedstock supply irregularity (lack of feedstock) Outdated / low quality equipment Competition with Russian producers 30-40% decrease in exports It is difficult to conclude long-term export contracts because of low production capacities of the producers Decrease in electricity consumption in many European countries reduction of fuel consumption by thermal power plants In 2010 new standards were introduced: ENplus for domestic pellets and EN-B for industrial pellets a part of Ukrainian pellets is below the standards. Some logistics problems (reasonable price vehicles are not always available) Some Experts admit possibility of re-orientation from external to internal market that may take not less than 5 years Nevertheless the exports of pellets/briquettes in the 1st half-year 2010 increased as compared with 2009 and came to 440 th.t (2009: 270 th.t)
Pellets and briquettes: Ukraine s internal market Domestic consumers Average price, EUR/t Communal boiler installations; population of the regions without natural gas supply 50-65 Distribution network 110-160 Refuelling stations 110-160 Owners of private houses and cottages equipped with modern boilers for solid biofuels 65-95 Production price in Ukraine: pellets 40-50 EUR/t, briquettes 35-45 EUR/t < 20% of the produced pellets and briquettes come to the internal market
Pellets and briquettes: Main problems for the development of Ukraine s internal market Lack / poor dissemination of information on the advantages of pellets/briquettes based heating systems Absence of: - specialized companies dealing with installation and after-sales service of the heating equipment - companies-suppliers of the solid biofuels to final consumers - respective infrastructure High cost of the heating equipment operating on pellets/briquettes. At present, coal and gas boilers are cheaper than boiler for pellets No state support / incentives
Production and consumption of rapeseed in Ukraine About 90% of the produced rapeseed is exported: 2008 94%, 2009 92%. Main importer is European Union (80% of the exports). Price 400-700 $/t 3 500 3 000 2873 2645 2 500 thsd. tonnes 2 000 1 500 1 000 1053 990 1897 1750 500 0 285 187 57 44 2003/04 2005/06 2007/08 2008/09 2009/10F Gross production Exports Source: presentation of Association "Ukroliyaprom, magazine Oil-fat complex
Production and consumption of rapeseed in Ukraine: prospects In the near future export of rapeseed will keep prevailing over domestic consumption. There is no industrial production of biodiesel in Ukraine. No industrial plants are under construction. There are about 20 small-scale producers which utilize their own feedstock and use the produced biodiesel for their own needs (tractors). As a rule the product is of low quality. Under present conditions, production of biodiesel from purchased feedstock is not feasible in Ukraine
FUTURE OPPORTUNITIES FOR EXPORT v Biogas v Energy crops (pellets/briquettes) v Bioethanol
Biogas in Ukraine: production and utilization 3 large biogas plants in operation. 12 under designing/construction Payback period: min 4 years taking into account GT Green Tariff on power from biogas: current status and problems The law on Green Tariff (01.04.2009) GT Factor for biomass 2.3 What GT Factor must be for biogas 2.3, 3.0 or more? License on biogas production/trade The Law on Biofuels (21.05.2009) Incentive or obstacle for biogas production and trade? Draft law on licensing submitted by the President (09.07.2010) passed 1st reading Possible export to Central Europe: challenges - Upgrading to NG quality - Certification, sustainability - Transportation by existing NG pipelines (high pressure) - Stimuli (green certificates)? Biogas plant in Elenovka village, Ukraine 21
Energy crops in Ukraine Ukraine s oblasts* Unused agricultural land, th.ha Land under energy crops, ha Energy crop Planned use of biomass Volynska 90 25 willow No information Iv.-Frankivska 19 500 miscanthus Co-combustion of pellets with coal on local CHPPs Export of pellets to Poland Lvivska 73 500 miscanthus Co-combustion of pellets with coal on local CHPPs Export of pellets to Poland 100 willow No information 1000 willow Co-combustion of pellets with coal on local CHPPs Poltavska 7 20 switch grass Utilization of pellets in Ukraine and export abroad Ternopilska 46 4 willow Utilization of pellets and briquettes in Ukraine Kharkivska 91 10 miscanthus Co-combustion of pellets with coal on local CHPPs * All Ukraine s oblasts have unused agricultural lands. Here are included only those which have energy crops plantations
A number of distilleries are doing preparatory activity to start bioethanol production in 2010 Total production capacity 114 th. t Total investments (2009-2010) 160 mill UAH SE SE SE Korostyshev distillery SE SE Zhovtnevy distillery SE Ivashkivsky distillery SE SE Trypilsky distillery SE Naumivsky distillery SE Khorostkisvsky distillery SE state enterprise SE SE Annual production capacity, th.t Investments, mill UAH Source: Ministry of Agricultural Policy of Ukraine
Conclusions v Existing international biomass trade: Biofuels: pellets, briquettes Feedstock: rapeseed Main importers: the EU countries (Poland, Germany ) v Opportunities for future international biomass trade: Biogas, energy crops, bioethanol v National biomass trade: Wood residues, firewood, sunflower husks, straw v Domestic biomass market in in the process of formation and development
Thank you for your attention! Contact information: Tetiana Zheliezna Tel./fax: +380 44 456 94 62 E-mail: zhelyezna@biomass.kiev.ua web-site: www.biomass.kiev.ua