The state-owned Ukrainian chemical company Zarya has begun construction
of $59 million ethanol facility in the Luhansk region bordering Russia, the
regional council's press service said Friday.
The facility, which is expected to begin operation in 2015, will have
capacity to produce 30,000 metric tons of ethanol annually.
Zarya will use wheat, corn, rye and other grains as raw material, the
press service said in a statement.
"There are not such facilities yet in Ukraine," Dmytro Drozhzhin, the
head of the industry and energy department at the Luhansk regional
administration, said in a statement. "About 70% of equipment will be supplied
by leading European producers."
The development underscores efforts by the government to increase
production of ethanol after recent report from the Agriculture Ministry
suggested Ukraine had been facing shortage of the fuel.
The shortage, among other things, will probably force the government to
postpone by six months a requirement that ethanol must be mixed with gasoline
to the level of at least 5% starting this month, according to Energy and Coal
Industry Minister Eduard Stavytskiy.
The law, put in effect in July 2013, requires a 5% ethanol mix in 2014
and 2015, and increases the level to 7% in 2016.
Ukraine will expected to be able to produce 133,000 mt of ethanol in
2014, short of 225,000 mt that are needed for oil traders to comply with the
law, according to the Agriculture Ministry.
Demand for ethanol is expected to further increase to 315,000 mt in 2016,
according to the ministry.
Ukraine increased ethanol output to 50,600 mt in 2012 from 2,700 mt in
2010, according to the ministry.
The ministry has been working on a program that would encourage alcohol
producers to retool for producing ethanol to be used in automobile engines.
Zarya is one of the largest producers of a wide range of industrial
explosives, emulsion explosives and special grades of TNT in Ukraine.
--Alexander Bor, firstname.lastname@example.org
--Edited by Derek Sands, email@example.com