Biotec Group – one of the largest producers of solid biofuels in Ukraine. Let’s talk about how the company started its work, how the domestic market was born and what the future of it.
Biotec: The Beginning
We started to work with biofuels somewhere in 2010. It was extremely perspective in Ukraine, this business had great potential, so we chose it as an area of activity. Unlike our country, in Europe the market was already formed, and it needed new raw materials and new suppliers. And we started to make briquettes from a tree first, and then, moreover, pellets, firewood, coal, etc.
I think, that the real push for the development of Ukrainian biofuels production was given by Poland. At that time, there was introduced a law that provided subsidies for solid biofuel power plants. We’ ve taken advantage of this, sent to Poland a large number of low quality pellets: from straw or from sunflower seeds. Lots of factories were founded in Ukraine especially for this, and large amount of them had to be closed when the Polish law finally abolished.
Biotec also started to work with Poland and the Baltic, but later we reoriented to Central Europe: Italy, Germany, Belgium. In addition, exports of low-quality biofuels were unprofitable, and we concentrated on the highest categories.
Objective growth
The European biofuels market is stable now, but here in Ukraine we can see rapid growth. Significantly increased demand within the country, as well as requirements for quality have changed. It’s impossible to compare what we are producing today with the product we had five years ago.
As for me, the most profitable use of biofuels today can be in remote regions of the country, where it is expensive to supply gas, but where there are forests, many fallen trees or other biomass. It can all be used, for example, to heat certain local objects: schools, hospitals, some municipal institutions, enterprises. Finally, biofuels can also be used as a source of electricity. So, I think that at the local level for some time it will be a profitable and promising activity.
Export of biofuels, as any other product, should be considered in two respects: whether there is demand, and whether the price suits. For example, it’s not profitable to sale sunflower scale to Europe: an extremely high shipping price compared to the price of the product itself. The same applies to other biomass with increased ash content (the content of substances remaining after full combustion of fuels). But high-quality high value added pellets are still profitable.
Shadow environment
Interesting that despite the fact biofuels are quite environmental, its production can’t be called so. After all, in order to extract raw materials and deliver them to the plant, it is necessary to use, for example, diesel engines that are not ecologically clean at all. To cut – we use chainsaws. To dry pellets we use ovens. So, considering biofuels only as environmental benefits is not worth it. It is useful in the complex, which adds a low cost of production and the ability not to depend entirely on natural resources.
What to expect?
In my opinion, the biofuel market in Ukraine will be developing for the next 10 years. 3-4 years ago in Ukraine there was an extremely low consumption, but last year the domestic market took almost all biomass, leaving very little for export.
There is hope that the active development of technologies will lead us to new modern technoligies of heating and electricity generation that completely eliminate the burning of wood or coal. Will see how our industry and our science can react to these demands of time. I hope that the replacement will take place somewhere in 10 years. Maybe a little later, but it will happen.