Restoration of Ukrainian industry according to European standards. First successes

So far, thanks to the project “Best Available Technologies and Management Methods (BAT) for Ukraine”, carried out by GIZ on behalf of the German government, which allocated grants for modernization to our industrialists. Projects from businesses, which had to comply with the principles of Directive 2010/75/EU, were selected through a competition; Ukrainian businesses submitted 25 applications, from which the six best were selected.

The winning enterprises will receive non-refundable assistance of up to 2 million euros. The grant program also provides for attracting credit resources from Ukrainian banks and using the enterprise’s own funds to co-finance these projects worth up to 10 million euros. We'll tell you what exactly they will spend this money on.

ZN.UA information: Last year, the Verkhovna Rada adopted as a basis the draft Law No. 6004-d “On ensuring the constitutional rights of citizens to an environment safe for life and health.” This document provides for the introduction of a mechanism for integrated prevention of industrial pollution in accordance with Directive 2010/75/EU and extensive modernization of enterprises. We are talking about reducing energy intensity and emissions in the most polluting sectors: energy, oil refining, metallurgy, chemical, mineral and food industries.

Substitution of fossil fuels and transition to alternative energy sources

Of course, it is easiest to calculate the payback period when production switches to alternative energy sources, in particular to biofuel. The first Ukrainian enterprise received a grant from LVN LIMITED LLC for the production of ethanol for the installation of a biogas plant for anaerobic digestion. The installation will produce biogas, which can replace 6.8 million cubic meters of natural gas. By replacing natural gas with biogas, carbon emissions are reduced by 5.5 tons per year. At the same time, the biogas plant will produce about 190 thousand tons of digestate, which is used as fertilizer to improve the soil. This will reduce methyl mercaptan emissions by 4.2 t/year and reduce nitrogen oxide emissions by 4.6 t/year. The duration of the project is 18 months, and the payback period is only two years.

The management of the enterprise notes that in Ukraine not a single commercial biogas project has yet been implemented in such companies (when this is common practice in the EU), while alcohol is used in the production of products with high added value: medicines, fuels, solvents, other chemicals, alcohol products and the like.

Also, one of the sugar factories in another submitted project application notes that converting boilers to biofuel reduces emissions of sulfur oxide by 160 tons/year, and carbon monoxide by 250 tons/year. This transition prevents the formation of solid waste from coal combustion in the amount of 1000 tons/year and reduces greenhouse gas emissions by 18.8 thousand tons of CO2 per year. The company determined the project duration to be six months, and the payback period to be only 1.9 years. And this was during the war.

Increasing energy efficiency

Another enterprise that stores and processes harvested crops won with a project for heat recovery when drying grain. Grain processing is associated with significant energy consumption, which leads to the release of pollutants into the air from both grain and burned fuel. A modern grain dryer with a heat recovery system makes it possible to save up to 30% of fuel and reduce carbon emissions by up to 50%. Since such an insulated grain dryer allows you to make the most efficient use of heated air and increase operating efficiency by up to 85%. And the pollutant capture system prevents 90% of dust emissions. Solid waste is disposed of by burning in a grain dryer oven.

In absolute figures, the company expects a reduction in dust emissions by 25 tons/year and carbon monoxide emissions by 270 tons/year. Greenhouse gas emissions are reduced by 765 tons of CO2 per year. Waste disposal by incineration is 210 t/year, with expected energy savings of 317 GJ/year. The potential for expanding the technology is significant, as the company notes, because the total number of grain elevators (silos) in Ukraine is estimated at 700 objects, and about 230 of them belong to trading companies. The duration of the project is 11 months, and the payback period is up to three years.

Preventing water pollution from pollutant emissions

The dairy plant, in the process of expansion, proposed installing a wastewater treatment plant, which would allow the water to be reused and, as stated in the application, save 48 thousand cubic meters of water per year. Treatment facilities reduce the amount of not only organic pollutants, but also ammonium. The company notes that as a result of increased production, the amount of wastewater has increased over the past three years from 150 to 320-340 cubic meters per day and is expected to double again. This overloads existing filtration fields and creates environmental and social threats. The implementation period is 12 months, and the payback period is ten years.

One poultry slaughtering shop also submitted a project to install wastewater treatment facilities. It provides for a reduction in organic pollutants by 25 tons/year, as well as water savings of about 7 thousand cubic meters per year.

The main problem of the enterprise is also water pollution, which is increasing due to increased production. And it is this problem that the owner wants to solve through participation in the financial mechanism and the implementation of BAT in production.

Reducing harmful emissions in the metallurgical sector

The steel mill also submitted its proposal to co-finance a baghouse gas cleaning system for an electric arc furnace used for melting and casting metals.

The company expects to reduce dust emissions by 67 tons/year and carbon monoxide emissions by 270 tons/year thanks to the replacement of equipment and the introduction of a continuous monitoring system for air emissions, which is a mandatory condition for the implementation of Directive 2010/75/EU. Reducing dust emissions is particularly important in this sector as it can contain large amounts of toxic substances, especially heavy metals and persistent organic pollutants such as highly toxic and carcinogenic dioxins.

The implementation of this project will make it possible to comply with the maximum permissible dust concentration of up to 20 mg/nm3 and 250 mg/nm3 for carbon monoxide, and this is important for reducing the risk of paying fines for overtime emissions, as well as reducing the amount of environmental tax. After all, it is the rates of taxes and other payments, which are quite high in Europe, that stimulate enterprises to modernize, and for Ukraine it is also very important to implement environmental and climate finance reform.

Reducing emissions for coal-fired power plants

The energy sector is not standing aside either - one of the Ukrainian thermal power plants has submitted a project for the construction of flue gas desulfurization at the power unit. The application was selected, but due to late approval of further documents, it was rejected. The project would reduce emissions of sulfur oxides by 15.7 thousand tons/year, approximately the same amount of nitrogen oxides and dust by 1.2 thousand tons/year, which would help improve air quality and reduce acid rain in the region. This installation can become a pilot for the entire Ukrainian energy sector, which includes dozens of power units with their extremely high emissions of sulfur and dust. The project was started earlier but suspended.

It is worth noting that the Cabinet of Ministers back in 2017 approved the National Plan for the Reduction of Emissions from Large Combustion Plants in fulfillment of the requirements of the Energy Community Treaty to implement Directive 2010/75/EU on industrial emissions. Operators of large combustion plants switched on before 2033 must ensure that emissions of dust, sulfur dioxide and nitrogen oxides are reduced tenfold. Unfortunately, Ukraine has made no progress in meeting these demands. Pre-war data indicate that coal-fired thermal power plants in Ukraine were the biggest air polluters in Europe.

Due to emissions from Ukrainian coal-fired power plants, 1,315 people died in the EU in 2019, and twice as many in Ukraine. The estimated cost of social costs to Ukrainians associated with related health care, decreased economic productivity and decreased levels of well-being amounted to 3.2 billion euros in the year studied. Due to Russian shelling, a significant part of the coal generation is damaged, so it needs to be restored using low-carbon fuels, applying the principles of decentralization to be less vulnerable to enemy shelling, and according to European standards.

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So, as we see, in practice the thesis from industrial giants that the implementation of measures to green an enterprise in accordance with Directive 2010/75/EU is not confirmed is the murder of the economy. The implementation of European standards means energy savings and circular use of resources, improving the quality of life of Ukrainians and faster accession to the EU. As the director of the project “Best Available Technologies and Management Methods (BAT) for Ukraine” Gabriel Sauer told us, this is the first step in creating a financial mechanism in Ukraine for scaling such projects, the experience of which they will transfer to the Ministry of Natural Resources for further implementation.

Ukrainian business knows and studies the latest technologies in its field in order to comply with European standards and preserve European markets for export. He is ready to change for the better.

Therefore, the Verkhovna Rada must adopt draft law No. 6004-d, as amended, which implements Directive 2010/75/EU, as quickly as possible, predictably - this year, so that the post-war restoration of industry is rapid, with the attraction of foreign capital, and also brings Ukraine closer to membership weight

As noted by the coordinator of the project “Best Available Technologies and Management Methods (BAT) for Ukraine” Andrey Gunko, within the framework of the new law, Ukraine will be able to develop and scale financial mechanisms with the attraction of enterprise funds, international grant assistance and loans from Ukrainian and foreign banks in order to reduce the cost of modernization for business. International businesses need clear rules for making investments. From his point of view, this is a great chance to attract finance for modernization through high-quality grant projects.