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Ukraine has significant biomass potential in the shape of unused grain straw, wood residues and sun flower husk that can be used as inputs for biomass pellets production. As each input has different requirements in terms of costs and availability, transport and market value of pellets, we will review three categories separately here in the profitability analysis.
Straw pellets production in Ukraine
As of 2011, there were about 40 straw pellet traders in Ukraine but only four large pellet producing plants which specialize only on straw pellets. Two more large straw pelleting plants are with a joint capacity of 80 thousand t/year in Kirovograd region and one in Odessa with the capacity of up to 9 thousand t/month are expected to start operation in 2012. They will be among the largest Ukraine straw pellet production plants. Straw pellets are mainly exported to Austria, Germany, Poland and Czech Republic. Lesser amounts are also sold on the domestic market. Straw pellets have a high sulphur content that sometimes decreases their competitiveness in comparison with wood and sunflower husk pellets. Besides, alternative competing use for straw means that straw price scan already achieve up to 600 UAH (around EUR 60) per bale. If purchased as loose straw from the field, the cost can be as low as 50 UAH per tonne.
Wood pellets production in Ukraine
During the period from 2008 to 2010 the number of wood pellet traders in Ukraine increased from 34 to 103. There were 38 wood pellet producers in Ukraine in 2010: Kharkov, Kyiv, Zhytomyr, Poltava and Zakarpattia were the leaders in wood pellets production in 2010.In 2011 demand for Ukrainian wood pellets came from Poland, Italy, Greece, Germany, Denmark, UK, Czech Republic, Latvia, US, Lithuania, France and Russia. In total, wood pellets have been exported to 22 European countries in 2010.
Sunflower husk pellets production in Ukraine
In the sunflower husk pellets market a growth rate of 27% in the number of pellet traders and of 50% in pellet producers has been observed in the first half of 2011 compared to 2010. Whether this growth tendency was kept until the end of 2011 is difficult to state since sunflower husk pellets production is subject to seasonality. Sunflower husk feedstock is naturally cheaper during the oil extracting period (cold season of the year with the peak of sunflower oil production lasting from October to December). In summer, most of the oil extracting factories do not work. In 2010 until the first half of 2011 there were 102 sunflower husk pellets traders and 32 producers operating in the market. Among the regions, the largest number of traders came from Zaporizhia, Kyiv, Kherson and Donetsk regions.