The structure of the Ukrainianbiomass-to-energy market is taking shape. The supply side ofthe market is represented by the forestry and woodprocessing companies and crop and animal farms that aresources of biomass. Pellet producers process available wasteinto pellets. Boilers for burning biomass are available inthe market from either local producers or importers.Biomass-to-energy facilities produce electricity and/or heatfor a variety of users (industrial, commercial, andresidential). In some cases, users generate electricityand/or heat for their own use. In others, (private ormunicipal) electricity/heat producers sell to end-usersdirectly or through the power grid. Biomass-to-energyfacilities may use biomass only or in combination (co-fired)with other fuels (oil, gas, or coal). Demand forbiomass-to-energy initiatives has been growing in Ukraine,being driven by the motivation of cost savings and increasedefficiency. In the short term, the share of heat suppliersusing biomass boilers could grow up to 63 of all thesurveyed players. Despite the expanding share of municipalheat suppliers using biomass boilers in the total number ofcompanies, the share of biomass in the overall volume offuel consumed by the surveyed entities remains low (14percent). The most common fuel is natural gas, with a shareof 80 percent in the total volume of fuel used by municipalheat suppliers. Additionally, the shortage of biomass ofrequired quality is considered the main risk when it comesto implementing biomass-to-energy projects. The shortage ofbiomass and the growing demand for it pushes prices up,which increases the cost of a project and the uncertaintyregarding the investment payback period.
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