European investments in Ukrainian bioenergy: what’s new in 2025

Ukraine is gradually becoming one of the leading players in the European bioenergy market. In 2025, the industry will experience a turning point — from the first successful exports of biomethane to the launch of dozens of new production projects. European partners see this not only as an environmental opportunity but also as a strategic one, namely to diversify energy sources and attract billions of euros in European investment into Ukraine’s bioenergy sector.

Why Europe is investing in Ukrainian bioenergy

According to forecasts by the Bioenergy Association of Ukraine, the European Union has set an ambitious goal to increase biomethane production to 35 billion m³ by 2030. Currently, annual biomethane production in the EU is around 5–6 billion m³, while market demand is growing several times over, so the shortage of this resource remains significant. Ukraine’s potential allows it to cover up to 20% of the EU’s target, as it has one of the largest agricultural raw material potentials in Europe.

In addition, Ukraine’s biomethane production potential is 21.8 billion m³ per year, and the total investment potential for biomethane in Ukraine is estimated at €40 billion. For the EU, this is an opportunity to replace Russian gas, and for Ukraine, it is a path to energy independence and high value-added exports.

Companies specializing in biogas and biomethane plants are already converting agricultural waste into clean energy, creating a new “green” economy for Ukrainian agriculture.

Investment prerequisites — first biomethane export in February 2025

In February 2025, Ukraine exported biomethane to the EU for the first time. The first batch — 67,000 m³ — was sent by Vitagro via Slovakia to Germany. A few days later, MHP (Oril-Leader) exported another 27,400 m³ of biomethane via Poland, with Vitol Group as the buyer.

Prices for biomethane in the EU are usually higher than natural gas due to an additional financial surcharge — a “green” premium. In 2024–2025, prices fluctuated in the high range depending on the contract model — €900 per 1,000 m³, which is almost twice as high as the price of natural gas. This makes the production of biomethane from waste not only environmentally friendly but also a highly profitable business.

According to the forecast of the Bioenergy Association of Ukraine, the capacity of domestic producers will reach 111 million m³ of biomethane per year by the end of 2025. The market leaders include Vitagro, MHP, Gals Agro, Teofipol Energy Company, and YM Liquid Gas.

Ukraine Investment Framework: €9.3 billion for development

The key driver for foreign investors was the Ukraine Investment Framework programme, part of the Ukraine Facility initiative, with a total budget of €50 billion. This year alone, €9.3 billion in financing is planned, of which €7.8 billion is in loan guarantees and €1.5 billion is in grants and blended finance.

The mechanism operates through international financial institutions — IFC, EIB, KfW, BGK — and Ukrainian banks. Small and medium-sized businesses can receive grants of up to 30% of the project cost, in particular for financing biogas projects and modernising energy systems.

This opens up new opportunities for supporting bioenergy in Ukraine — from development to the launch of production facilities that meet EU standards.

Support programmes for bioenergy projects

National incentives are also in place. The Ministry of Agricultural Policy has stated that the state has created a comprehensive framework for the development of the industry: a biomethane register, a system of guarantees of origin, tax incentives and grants for biogas plants.

In addition, the Law on Support for Investment Projects provides assistance for initiatives with a capital of €12 million or more. This mechanism enables agricultural enterprises to launch bioenergy projects with the support of the state and international banks.

Key market players and new production facilities

2025 has been a record year in terms of the number of planned biomethane facilities. In addition to Vitagro, MHP and Gals Agro, new investors are entering the industry. This year alone, there are plans to build 4–7 new plants, each with a capacity of around 5 million m³.

According to Vitalii Koval, Minister of Agrarian Policy and Food of Ukraine, Ukraine’s potential is 22 billion cubic metres of biomethane per year, which makes us the future centre of European “green” energy.

Most facilities are built on the basis of biomethane production from agricultural waste — manure, pulp, droppings. Importantly, the process produces digestate — an organic fertiliser that is returned to the soil, creating a closed ecological cycle.

Economics of biomethane for agricultural businesses

For agricultural companies, switching to biomethane means not only energy independence but also a new level of profitability. The average return on investment for such projects is 25–30%, and a biogas plant typically pays off within 3–4 years, especially if the enterprise is located near the gas transmission system. Optimised feedstock preparation for a biogas plant makes it possible to increase biogas yield by 15–20%.

In addition to selling biomethane and electricity, producers receive additional income from using or selling organic fertilisers, as well as from reducing costs related to the processing or disposal of by-products and waste.

Prospects and Challenges

According to analysts from Green Deal Ukraine, by 2030, Ukraine may export up to 1 billion m³ of biomethane to the EU annually. However, this requires full regulatory alignment for exports and synchronization of quality standards with the EU.

In the domestic market, cogeneration units are developing in parallel, allowing efficient use of biogas for the production of electricity and heat. This is an alternative for enterprises focused on self-sufficiency in energy.

While Europe is prioritizing exports and decarbonization, for Ukrainian agricultural companies, bioenergy is a way to increase efficiency, avoid waste disposal costs, and stabilize cash flow.

Conclusion

The European energy sector is undergoing a “green” transformation, and Ukraine is already an active participant in this process. Growing demand, stable biomethane prices in Europe, and large-scale European investments in Ukraine’s bioenergy sector make 2025 a turning point for the industry.

Now is the best time to invest in bioenergy. European financing, government support, and technical expertise make it possible to implement projects quickly and with high efficiency.

The Ukrainian market has already successfully implemented bioenergy projects that demonstrate the effectiveness of “green” technologies even in challenging economic conditions. The Pro-Energy team supports such initiatives throughout the entire cycle — from feasibility studies and feedstock preparation to design, installation, and commissioning. This proves that bioenergy in Ukraine is already a real tool for growing agricultural businesses, diversifying income, and strengthening the country’s energy independence.

Learn more about biogas plants and book a consultation right now — let’s build an energy-independent future for Ukraine together.