Development of Ukraine's bioenergy sector in the context of the EU guidelines

The European bioenergy policy is changing dynamically, following the trend of sustainable development. Ukraine, having the significant agricultural potential and following the European vector of development, strongly depends on the European tendencies. Changing the structure and level of demand for bioenergy resources has an important effect on the development of the national bioenergy market and the production policy of agriproducers. The purpose of this study is to summarize the impact of recent institutional and legislative initiatives of the EU on the development of the bioenergy market in Ukraine and analyze possible challenges in the field of land use in this regard. The paper highlights the instability of the development of Ukraine's domestic biofuels market. Stagnation in the market for liquid biofuels is mainly a result of regulatory shortcomings. At the same time, Ukraine's exports to the EU markets, due to the scarce and technologically outdated processing capacity, remains limited to bioenergy raw materials. Analysis of the trends in the production and exports of rapeseeds in Ukraine indicates a high dependence on the EU market. A similar situation also persisted in the market of solid biofuels. The main factor of change here was the increase in domestic prices for traditional energy resources in 2015-2016, which caused subsequent changes in the tariff policy. The analysis conducted made it possible to identify key trends and measures to encourage the development of Ukraine's biomass market. The growing demand for biofuels gradually leads to changes in the structure of land use in Ukraine. However, due to the high level of cultivation in Ukraine, the scale of these changes in quantitative terms is negligible. During 2004-2016, the area of arable land only increased by 0.3%. At the same time, the threats to sustain-able development are not so much related to the general changes in land use, as to structural changes in the field of plant growing. Modeling results indicate a possible increase in the pressure on land resources in the future as a result of the implementation of European bioenergy policy. In the meantime, a milder effect could be achieved by implementing a scenario of limiting the use of the first generation biofuels, which include rapeseed oil: in this scenario, the additional need for arable land might be by one third lower than in the baseline scenario. Analysis gives grounds for concluding that it is only the types of raw materials used for biofuel production that will change in the future, while both political and market conditions will contribute to the cultivation of new types of raw materials growth for exporting to the EU and for meeting Ukraine's domestic needs in biofuels in accordance with the international obligations incurred. The market policy of Ukrainian producers (mainly of those export-oriented ones) in such conditions can carry certain risks to sustainable development of rural areas. This requires improvement of regulatory policy in the field of land use and development of appropriate mechanisms to prevent the critical use of biomass as the only source of maintaining the natural fertility of soils.