The Ukraine Report: Could 2023 be the year to buy ethanol in the country?

The Russian Ukrainian war has spurred the development of bioethanol in the country.

Ukraine’s harvest is making progress, but war is still ongoing within the country. We are getting a better idea of how the country plans to utilize its bioethanol industry this year, and the problems it could face.

Latifundist Media has partnered with us to provide boots-on-the-ground coverage:

2023 may be the year to buy ethanol in Ukraine. Considering that the country is currently at war, why all the optimism?

Mr. Peter Tsyganknov, the Director of Agri-Technology explains how exactly the war spurred the development of bioethanol.

“Farmers were faced with the fact that ports for grain export were closed or their capacity has dropped sharply. Farmers understood that the processing of products should be organized near the fields where it grows. Farmers gave up to $50 on logistics for 40 bushels of grain. Later, they will receive additional income,” said Tsyganknov.

Besides, the price of grain on the domestic market has almost halved. Therefore, its processing has become even more attractive. After all, grain accounts for about 70% of the cost of the structure of ethanol. Any raw material is suitable for the production of bioethanol. In Ukraine, corn and sugarbeets are used most often.

“Any grain, even that which is unsuitable for export, can be used for the production of bioethanol just as long as it contains starch,” Tsyganknov said.

Another reason for the development of the bioethanol industry is surprisingly low-quality corn. In previous stories, we told that due to the high cost of grain drying and unfavorable weather for harvesting, plenty of corn will remain in the fields for the winter.

“This spring, we will have for certain between 2 and 3 million tons of corn, which is suitable only for production of bioethanol. There is no processing capacity to do that. The reason for the large tonnage available for bioethanol is roughly 6 to 7 million tons of corn is still standing in the fields, in the middle of winter,” said Bohdan Kostetskyi, Operating Partner of the Trading and Analytical Company, Barva Invest.

The U.S. is the world leader in the production of bioethanol, so Ukraine has someone to look up to. There are plans to build at least 4 bioethanol plants in Ukraine in 2023. Where will all of this production go? This is where the problem lies as Ukraine does not have a regulation regarding the mandatory blending of bioethanol with traditional fuels. Therefore, most of it may be exported.

“Together, with some experts from the market, we have calculated that if Ukraine is matching the corn process for bioethanol to the capacity of the Ukrainian market, we will be able to utilize, in such a way, a maximum of 400,000 tons of corn.”

The idea is to boost the development of the alternative energy market in Ukraine with the support of the EU and gain access to the EU market.

“If there are investments made somewhere close to the border of Ukraine, we can utilize up to 2 maybe even 3 million tons of corn, turning it into bioethanol, which can then be blended into sales of gasoline on the EU market and on the Ukraine market.”

This will help Ukrainian agricultural producers stay in business in challenging times, and at the same time, it will help the country’s economy.

That report was powered by Latifundist Media, with USAID support provided through Agriculture Growing Rural Opportunities (AGRO) Activity implemented in Ukraine by Chemonics International. For more information, visit their website or follow them on social media.