SAF Ukraine: The analysis of public procurement of pellets and briquettes
We are happy to share with you the analytical material of the UABIO expert Yevhen Oliinyk for the SAF platform.
In general, in the period 2020-2023(February), contracts for the supply of about 50,000 tons of fuel pellets and briquettes from biomass, which is equivalent to 70,000 GJ of energy, were concluded only through the public procurement system.
Pellets and briquettes produced from biomass are a high-quality fuel successfully used in heating boilers for the budgetary and communal spheres or the facilities of state-owned institutions and organizations. Wood pellets, sunflower husk pellets, and various types of briquettes are in the most significant demand. Biomass pellets have a sufficiently high heating value that is 14-17.5 MJ/kg. Other advantages are a convenience for transportation and storage and the automatic process of supplying fuel to the boiler, which reduces the amount of manual labour and staff.
About 250 supply contracts from 1 to 10,000 tons are concluded annually. In recent years, there has been a significant increase in the volume of fuel purchases and the number of signed contracts. In particular, purchases increased from 12 thousand tons in 2020 to 16 thousand tons in 2022, and the corresponding volume of contracts increased from UAH 33 million/year to UAH 117 million/year.
Over 300 unique suppliers won auctions for the supply of pellets and briquettes during the specified period.
In the period from 2020 to 2023(February), the average price of biofuel in Ukraine increased by 2.8 times:
2021 – 4,488 UAH/t (+52%);
2022 – 8,371 UAH/t (+87%);
2023 – 9,114 UAH/t (+6%).
The highest prices in 2022 (10-13.8 thousand UAH/t) were recorded in Chernihiv, Chernivtsi, Khmelnytskyi, Kyiv, and Zakarpattia regions. The lowest price level of up to UAH 7,000/t was maintained in Ternopil, Kirovohrad, and Mykolaiv regions. In general, in 2022, contracts were concluded for the supply of 560 tons of pellets at a price of UAH 15,000-20,000/t, which is about 34% of the total annual volume.
Informative diagrams are available at the link (in Ukrainian).
Source: The article “Analysis of public procurement of pellets and briquettes” on the SAF platform.
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