Two Ukrainian agricultural companies have announced plans to build four new biomethane plants. The joint investment amounts to over 43,7 million euros. It is one of the larger private investments in the Ukrainian biomethane sector since the country first exported biomethane to the European Union in 2025.
The majority of the funding comes from Vitagro Energy. The company plans to build three plants in the western regions of Ternopil, Chmelnytsky, and Rivne, accounting for a combined production capacity of approximately 3 million cubic meters of biomethane per year. The three projects together cost around 30,8 million euros, of which Vitagro Energy itself is contributing more than 15,2 million euros. The remainder is financed through equity and project financing. As a raw material, the company uses manure from its own livestock farms within the broader Vitagro Group. The plants are also expected to produce around 66.000 tonnes of liquid and solid organic fertilizer per year and generate a combined 0,4 megawatts of electricity for their own operations. Construction of each plant is estimated to take about two years; once fully operational, each plant is expected to generate between 3,2 and 4,3 million euros in annual revenue.
A second, smaller project comes from KG Group, which plans to build a biomethane plant in the Poltava region with a budget of approximately 13,4 million euros. KG Group is financing about 6,1 million euros from its own resources and is seeking external investors for the remainder. This plant also uses agricultural residues from local companies as raw materials.
Growing export market towards the EU
The biomethane from both projects is largely destined for the European market. According to the International Energy Agency (IEA), Ukraine exported biomethane to the EU for the first time in 2025, a development the country views as a stepping stone to a larger role as a supplier of renewable gas. The IEA points out that Ukraine possesses 33 million hectares of agricultural land and thus has an estimated biogas and biomethane potential of over 11,6 billion cubic meters equivalent per year, the highest in Europe in terms of available residual streams.
According to the IEA, operational biomethane capacity in Ukraine stood at 111 million cubic meters per year in March 2026, distributed across seven plants. This corresponds to approximately 0,5 percent of total Ukrainian gas consumption. Another five new plants are expected before 2026, with a combined capacity of 20 million cubic meters per year. Export is attractive for Ukrainian producers: the IEA cites European sales prices of up to 1.000 euros per thousand cubic meters, compared to production costs of approximately 650 euros.
Part of national biomethane program
The investments by Vitagro Energy and KG Group fit within the broader biomethane development program adopted by the Ukrainian government in April 2026. That program aims to increase annual biomethane production to 1 billion cubic meters in 2030 and 2,1 billion cubic meters in 2035. It builds upon previous production targets from Ukraine's national energy and climate plan.
The IEA also identifies the barriers that continue to inhibit the sector's growth, such as the low Ukrainian carbon tax, competition with a heavily subsidized natural gas market for households, and war-related risks that make investors cautious. According to the IEA, access to the European export market is considered a key factor for attracting investment and further developing the sector.
Source: bioenergy-news.com
Photo: Diana Vyshniakova / Unsplash
