Створення умов для стійкого розвитку ринку рідкого біопалива в Україні

Abstract

In light of the growing importance of biofuels in the world and Ukraine’s potential of its production, the current research focuses on analyzing the future development of liquid biofuel market and production possibilities in Ukraine. Ukraine has a great competitive advantage in the production of biofuels as availability of the feedstock, fertile soils and supports through investments and know-how from abroad. Whereas the country disadvantageously exports feedstock to Europe for cheaper price and purchase expensive gas and oil instead. Thus, national interest should be shifted from the export of raw material to processing them into final biofuel products. This research aims at analyzing the current status and future projections of the liquid biofuel market in Ukraine until 2030 using the AGMEMOD model - an econometric, dynamic, partial equilibrium, the multi-commodity model. This is a new market for the Ukrainian AGMEMOD model, and it was implemented in the model for the first time. In recent years, Ukraine has worked on the fulfillment of European standards in the sector of biofuels. Ukraine has built a legislative base, which aims to support industry development and offer a large scale of benefits. However, due to high excise duty, low oil prices and no penalties for not achieving established indicators, the biofuel industry currently remains non-operating. The current paper offers the introduction of state aid in form of direct support and tax preferences for liquid biofuels producers to meet the needs of the domestic market in biofuels and to achieve the indicative target of 10% consumption biofuels in the total consumption of motor fuel by transport sector by 2020. The research suggested conditions for the creation of sustainable development of the liquid biofuel market in Ukraine for the long term period. Due to modeling results, it is expected that in the Baseline scenario biofuel production will not face major changes, because the use of raw materials for food and feed consumption, as well as their export, shall remain a more profitable option for Ukrainian producers. However, it is expected to motivate biofuel production by the introduction of a minimum of 10 % biofuel use for the transport sector. In particular, the increase of demand for biofuel by at least 10% shall positively affect the respective domestic market price and, consequently, positively influence on the use of commodities for biofuel production. Therefore, it might be the case that correctly specified domestic policy will trigger the development of biofuel production in Ukraine. This research proposes to introduce the obligatory admixture with traditional gasoline and diesel and return non-excise production of alternative fuel and biodiesel fuel for a certain period (up to 10 years) to achieve the indicative target of 10% biofuels consumption by the transport sector, and then promote the excise duty at an economically justified level of 10-20% of the excise tax rate on traditional gasoline and diesel. All the above measures, such as direct support for liquid biofuels producers, tax incentives for producers and the introduction of a mandatory mixing rate, will contribute to achieving the indicative target of 10 % consumption biofuels by the transport sector.