Problems and prospects of biofuel market formation and development in Ukraine

Economic Annals-ХХI: Volume 146, Issue 11-12, Pages: 45-48

Citation information:
Bozhydarnik, T., Tkachuk, V., & Rechun, O. (2014). Problems and prospects of biofuel market formation and development in Ukraine. Economic Annals-XXI, 11-12, 45-48. https://ea21journal.world/index.php/ea-v146-11/

Taras Bozhydarnik
D.Sc. (Economics),
Professor,
Dean of Business Faculty,
Lutsk National Technical University
75 Lvivska Str., Lutsk, 43000, Ukraine
bozhydarnik@rambler.ru

Valentyna Tkachuk
PhD (Technical Sciences),
Associate Professor,
Lutsk National Technical University
75 Lvivska Str., Lutsk, 43000, Ukraine
val.tkachuk@rambler.ru

Oksana Rechun
PhD (Economics),
Associate Professor,
Lutsk National Technical University
75 Lvivska Str., Lutsk, 43000, Ukraine
rechun@bigmir.net

Problems and prospects of biofuel market formation and development in Ukraine

Abstract. Introduction. Biofuel market in Ukraine is just beginning to be formed. There are several reasons for its slow development. First of all, weak environmental consciousness of consumers, absences of governmental support, as far as worldwide production of biofuels is usually subsidized at state level. Also, a huge problem is that the greater half of the raw materials, which could produce biomass fuels, which aims to export to Europe for their own needs.

Purpose of the article: analyze the current state of the formation of domestic biofuel market and suggest approaches to further development.

Result. Production and use of biofuels in Ukraine’s agriculture would create more jobs, especially increase employment of rural population. The undeniable value of biodiesel is in its environmental friendliness and capabilities obtained from renewable raw materials. Other benefits of it are non-problem sales, steadily higher prices, and stable demand from foreign buyers. Now the theme of biodiesel powerfully heard in Western European countries.

Now in Ukraine there isn’t a plant which may be characterized by the European level of the biofuels production. Aborted foundation of raw materials and absence of guarantees for a stable supply of raw materials obviously block the development of such plants construction projects, in particular, the participation of foreign corporations.

Another perspective direction of biofuels using is production and sale of bioethanol fuel. It is planned that by 2020 the share of biofuels using will be 20% of total fuel consumption in Ukraine. Taking into account very slow and declarative development of domestic biofuels market, these plans are, unfortunately, not feasible.

Development of the biofuels market in Ukraine is possible under the following conditions: harmonization of Ukraine’s legislation on biofuels with EU legislation; strategy of developed biofuels market in Ukraine implementation; the optimal variant for manufacture biofuels based on territorial and commodity factor determining; introduction programs and promote using biofuels in transport; software exports of biofuels; the introduction of financial incentives, investment and innovation supports in the biofuels production; production of biodiesel for own usage in agriculture; the tax incentives introduction in the biofuels production for own usage; consumption of biofuels, produced in Ukraine, stimulation.

Conclusions. Thus, at this stage, most relevant tasks for the market development of biofuels in Ukraine are seen as follows: an increase in rape crops, development of technologies for its cultivation, agro-technical modernization, the maximum power output, development and implementation of the regulatory framework, harmonized with the EU legislation. At the same time, there is a need to conduct economic researches and calculations concerning the industry’s development in future. In any case, we must strive that increasing economic efficiency of business becomes the result of change and transformation in the fuels market.

Keywords: Biofuels Market; Biodiesel; Bioethanol Fuel; Rape; Diesel; Assortment

JEL Classіfіcatіon: Q20; Q42

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Received 19.10.2014