Revealing the reason why Ukraine is 'heartless' towards Russia, determined to talk privately with the EU about gas

Ukraine could launch a “campaign” of biogas exports to Europe in November, after building up sufficient storage facilities, training personnel and amending laws to pave the way for exports. The first trial transactions are expected to take place this September.

Revealing the reason why Ukraine is 'heartless' towards Russia, determined to talk privately with the EU about gas. (Source: Getty Images)

The above statement was informed by the Chairman of the Board of Directors of the Ukrainian Bioenergy Association Georgii Geletukha in an analysis sent to the Ukrainian media.

Clearing the way for the "new campaign"

Ukraine has opened its gas network to domestic biogas producers to allow exports to Europe, but has kept in place a ban on exporting domestically produced natural gas.

The Ukrainian government has formalized the export procedures for biogas, according to the State Gas Transmission Operator of Ukraine (GTSOU). However, it maintains a ban on exporting domestically produced natural gas, which was introduced shortly after Russia launched its military campaign in Ukraine, although independent producers say the ban is discouraging new investments in the energy sector.

Biogas — also known as biomethane — is created when bacteria break down organic matter into methane, carbon dioxide, and other gases.

European analysts believe that Ukraine, with some 33 million hectares of agricultural land, could become a major fuel supplier to Germany and other European Union (EU) countries, replacing Russian natural gas imports via pipelines that the EU has pledged to phase out by 2027.

According to DW , the gas and hydrogen industry lobby group Zukunft Gas estimates that Ukraine could produce 22 billion cubic meters of biogas per year from corn silage, an organic by-product of corn harvesting.

Ukraine currently has seven biogas plants, which are expected to be operational by the end of 2024, said Georgii Geletukha, chairman of the board of directors of the Ukrainian Bioenergy Association. Two of them produce liquefied biogas and do not require connection to the gas transmission system. Meanwhile, five plants will be connected to the gas network: one - to GTSOU and four - to the distribution network.

“Two of the plants that will be connected to the distribution network are the best prepared, and these enterprises have already signed connection contracts,” Geletukha added. In addition, the biogas export law stipulates that gas must be pumped into storage facilities one month in advance. For this reason, Ukrainian biogas producers must learn how to work with the GTSOU platform, as well as study the gas market mechanisms for their own exports.

“I think it will take some time. Then biogas producers will pump gas for a month. By November, some of the plants will have accumulated the necessary biogas and will be ready for export,” Geletukha, chairman of the board of directors of the Ukrainian Bioenergy Association, expects.

According to Georgii Geletukh’s estimates, when all seven biogas plants are expected to be fully operational, Ukraine will be able to produce 111 million cubic meters of gas per year. The two plants that are set to be operational soonest will be able to produce a total of 6 million cubic meters of biogas per year.

However, the expert said it is still too early to make predictions for 2025 about the development of Ukraine's biogas production industry, as potential investors will have to wait for the results of these first export operations.

Previously, Ukraine's research group DiXi Group said that the country could produce about 21.8 billion m3 of biogas and/or biogas per year.

To officially "pave the way" for biogas exports, in March, the Ukrainian Parliament passed draft law No. 9456 on "Customs control and clearance of biogas transported by pipeline across the border of Ukraine".

Ready to remove Moscow from the network

Most recently, on September 9, the Ministry of Finance of Ukraine officially published Decree 380 dated August 1, 2024, which introduced significant changes to the regulations on the procedures for clearance of biogas through pipelines. The ban on biogas exports has been completely lifted, from now on, Ukrainian biogas producers will be able to export biogas to the EU through the Ukrainian gas transmission system, through federal connection points with 4 EU countries.

In addition, Ukrainian biogas producers will not have to worry about direct connection of their biogas plants to the transmission system, but can connect directly to distribution networks.

According to the adopted amendments, the terms and tariffs for connection, transportation and export of the gas transmission system of Ukraine for biogas producers are the same as for natural gas producers.

According to analysts at the global legal information platform Lexology, pure biogas is similar to natural gas in its properties and can be used in the same areas as heating, power generation and transport fuel. Importantly, it can be integrated into existing gas infrastructure without the additional costs of new networks, making this resource not only profitable but also widely available.

According to Lexology experts, Ukraine’s ability to export biogas to the EU has several advantages. Firstly, with its abundant agricultural resources, Ukraine is well positioned to meet a significant part of Europe’s renewable energy needs through biogas production.

The second advantage is the Ukraine-EU Strategic Partnership established in February 2023, which will strengthen cooperation in the renewable gas sector, contributing to Ukraine’s deeper integration into the EU energy market. It will also contribute to sustainable economic development in Ukraine’s vast rural areas by creating sustainable income opportunities.

In addition, biogas can replace natural gas, strengthening the energy independence of Ukraine and the EU by reducing dependence on imports from Russia.

Before Russia's military campaign in Ukraine, every year, nearly 150 billion cubic meters of Moscow's natural gas traveled through thousands of kilometers of Soviet-built underground pipelines in Ukraine to Europe.

Since the Russia-Ukraine conflict broke out in February 2022, EU countries have gradually reduced their dependence on Russian fossil fuels. So far, natural gas imports from Russia to Europe have fallen by more than 90%.

The five-year gas transit agreement between Ukraine and Russia, signed in 2019, expires at the end of this year. It is the only remaining commercial and political agreement between Moscow and Kiev. Russia is estimated to lose $6.5 billion a year at current prices, which is a strong incentive for Russian gas exporters to negotiate an extension.

However, when Russian gas exporters were ready to extend the transit agreement, Kiev firmly declared that it was ready to remove Moscow from its gas transit network, determined not to extend the agreement to cut off the flow of money to the Kremlin.

Of course, the loss of revenue for Russia is not small, especially in the context of the country's economy continuously facing difficulties due to sanctions from the West. But for Kiev, not renewing the agreement not only affects its position as a reliable gas pipeline, but also costs the country about 800 million USD/year in transportation fees, while its revenue is limited due to the prolonged military conflict.

Margarita Balmaceda, professor of international relations at Seton Hall University (USA), said that the Ukrainian economy could suffer the most damage. Kiev could lose the source of money to maintain its energy infrastructure and its position as a channel for affordable energy for Western allies. But it seems that Kiev has made new calculations, ready to face the damage first, to implement a longer-term plan.

Source: https://baoquocte.vn/he-lo-ly-do-ukraine-tuyet-tinh-nga-quyet-noi-chuyen-rieng-voi-eu-ve-khi-dot-287037.html