Azarov government is trying to introduce new rules in the oil products market that would improve the country’s trade balance by reducing the cost of imported crude oil and oil products as well as increasing export opportunities. Recently, the Minister of Energy and Coal Industry of Ukraine Yurii Boiko revealed to a TV station a bill requiring the refiners to produce gasoline blends with at least 5 percent bioethanol content starting on January 1, 2013, rising to at least 7 percent from January 1, 2014.
“We are bringing this bill to the next cabinet meeting and I hope it will be approved by the government before April 14, 2012,” Boiko said. “This is a European practice which will allow us, on the one hand, to reduce the oil imports bill, and on the other hand, provide a new market for our farmers. We have discussed the bill with all the market participants and believe it will have definitely positive effects.”
The Day’s reporters asked both farmers and refiners what they thought about it all.
Vitalii LVOV, vice-president, Association of Farming Servicing Cooperatives of Ukraine; CEO, Muravsky Shliakh farm:
“A lot of blending-grade bioethanol can be produced from industrial oilseed crops, mainly rapeseed, but also high-yielding genetically modified corn, in Ukraine. Its content in gasoline and diesel fuel can be as high as 10 percent without any adverse effects for the products’ quality and their environmental impact. We have previously seen similar programs enacted, but they did not have much support in Verkhovna Rada, and even less so among the oil traders who stood to lose from this novelty.
“We are, in general, supportive of the government’s intentions, as the program in question will allow the country to provide itself with additional energy resources, including those for agricultural use. Some scientists, though, are opposed to it. They say that, for example, rapeseed is very nutrient-hungry and damages the soils, and sunflower brings the same troubles. Processing grain into ethanol looks like a sacrilege at the first glance, even if it comes from coarse grains that would go otherwise to farm feedlots, and not to the people’s tables. But if you think about the economic component, it is worth it. For example, if a 1,000 hectares farm allocates to oilseeds 5 to 10 percent of its land, it can provide for all of its fuel needs on itself. Our agricultural science luminaries happen to err sometimes when still advocating the need for seven-field or even ten-field crop rotations. These do not matter much anymore. The success in farming depends exclusively on whether you use gifts of modern science and technology. The world’s farmers are widely using now not just chemical fertilizers, but biological ones, too, which mobilize nitrogen and transform phosphorus into the plant-digestible form.
“So, Ukrainian farmers are not afraid of ethanol. I know many farmers who have turned to it five or eight years ago and have succeeded through investment.”
Leonid KOSIANCHUK, president, Association of Ukraine’s Oil Products Market Operators:
“For the oil products market, mandatory bioethanol use is not a big threat, while the distillers will get guaranteed sales. The problem is that blending may turn a normal gasoline into a very dangerous fuel. Bioethanol is known to be very hygroscopic. For example, you have filled in the tank with what seemed to be a normal gasoline, but under damp weather conditions, your tank may get some uncalled-for water in it after less than a week of driving the car. There are two solutions of the problem, and the ‘lobbyist’ solution addresses the distillers’ pressing question of what to do with low-quality alcohol that went through the rectification column just twice. Far wiser solution would be to blend gasoline with ethyl tert-butyl ether which is made from alcohol, and not with dehydrated alcohol. The resulting blend is not hygroscopic. However, this process requires additive, a special hydrocarbon fraction that is produced when refining the oil. It is common knowledge, that Ukrainian refiners are in a bad state currently... Although, in principle, they can do it, and Lysychansk refinery had produced this additive before. Any blend without it would be a blend of gasoline and unfinished alcohol.”