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IEEC and Smart Holding create Ukraine's first major biofuel plant

Article - January 19, 2012
A new plant in Vinnytsia will convert agricultural waste into biomass fuel pellets that will provide energy for local state-run enterprises and households and create jobs

The first large-scale project in Ukraine to produce biofuel is on track to be piloted in June. The joint venture is the brainchild of the Institute of Environmental and Energy Conservation (IEEC), which has partnered with Smart Holding as the main investor to help turn it into reality. 

More than 90 per cent of the factory’s construction is already complete. The initial technology for processing the raw material – waste straw, which will come mainly from the rice, rapeseed, soy and sunflower industries – is being provided in February by two German companies: Claas and Amandus Kahl. 

Owned by leading Ukrainian businessman Vadim Novinsky, Smart Holding was chosen as the perfect investment partner for the pilot project. It is one of the largest groups of companies in the country and has investments in a wide range of industries, including metals, mining, and non-metallic and construction materials.

The IEEC provides professional consultancy services in energy and environmental audit and management, project development, and the implementation of state-of-the-art energy-efficient technologies. It is also involved in reduction of fuel consumption and pollution of the atmosphere, including greenhouse gas emissions.

Co-owner of the IEEC Sergey Fedorovich Yermilov provides an overview of the landmark scheme.

How do you see the biomass project developing?

If the pilot project is successful, in future we will produce one million tonnes of biofuel; and Ukraine will be able to reduce imports of natural gas from the Russian Federation by 500 million cubic metres annually.

We are already pretty sure that it will be profitable – this we can infer from the business plan, but only time will show how attractive it is for other enterprises and whether all the regions of the country will be interested in cooperating.

Taking into consideration the fact that our government expects stable growth in grain crops harvests, amounts of agricultural waste will also grow larger. To date, this waste has not been made use of. We either ploughed it back into the soil or it was simply burnt.

A few years ago Ukraine harvested nearly 30 million tonnes of grain crops per year. Last year we improved the result up to 40 million tonnes; this year it is around 45 million tonnes already. The planned production of grain crops in the coming years is 80 million tonnes. This means that we will have huge volumes of excessive agricultural waste that needs to be recycled. We feel that the best way to recycle it is to produce sustainable biofuel.

Parallel to this, machine building industry will be developed: we plan to produce special equipment, such as boilers, because Ukraine has an acute need to modernise 30,000 heating stations. Thousands of jobs can be created.

If the pilot goes well, will you be looking for additional investors and partners?

At present we have the funds to complete this first pilot project. But if we decide to expand, it is evident that we will need more investments and new connections. That is why our goal at this moment is to inform the Western community that such an initiative has been launched in Ukraine and to evoke interest among potential partners.

Reaching one million tonnes of biofuel production will be our second target, and if we are successful at this stage, we will expand the project further: up to five or 10 million tonnes. According to the calculations carried out by the Academy of Science of Ukraine, the potential of biomass in our country amounts to 27 million tonnes. You see that the potential is huge.

What else is the IEEC developing?

We are working on a set of programs aimed to solve the environmental problems and improve the energy efficiency of enterprises. We are also elaborating special projects for metallurgical industries owned by SCM, Metinvest and Smart Holding. We have also developed a number of large-scale projects for the Industrial Union of Donbass and some other companies. To sum it all up, I would like to say that our experience in the development of energy efficient and environmentally attractive projects has given good us connections and an oportunity to create new ways of widening the Ukrainian market of energy efficient technologies.

It is very difficult to explain everything about our company in such a short article. You will find more information on the activity of the IEEC at our company’s website: