Russia-Ukraine war is causing troubles across nations as many commodities prices have peaked high, while shipment delays from both Russia and Ukraine are also causing bottlenecks in the supply chain. There are commodities that countries import from both Russia and Ukraine, such as wheat, for which both countries account for 29% of global exports. On the other hand, for the exports of corn, both countries account for around 19% of the global exports.
The shortage of commodities is evident in many countries, especially the EU, which accounts for 30-40% of Russian crude oil exports. A big proportion of the market in the EU imports Russian oil to fuel its factories and power plants, fulfilling the energy demand in the region. However, even before Russia’s invasion of Ukraine, a valuable metal was discovered in Ukraine’s underground that captured the attention of international companies to acquire it, and thereafter, Ukraine clean energy market potential was recognised by many.
A Mystery Discovery
In the eastern region of Ukraine, about 500 thousand tons of lithium oxide is in the deep ruins of Ukraine, as per Ukrainian researchers. Lithium oxide, which is a close source of lithium, can prove to be Ukraine’s lithium reserve, the largest lithium reserve in the world. This will power many electric vehicles that will be launched in the market in the near time. A company named “European Lithium” announced to acquire the two lithium reserves in Ukraine.
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Ukraine has long utilised mainstream energy sectors and commodities which have shaped its economy into what it is now with legacy sectors such as coal, iron, and titanium. While the exports of coal are lower than crude oil, which is higher in value, the other products have a significant value of exports to other countries for Ukraine in 2021 as shown below. The exports for Ukraine’s electrical energy are also shown, as will be highlighted further.
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EU Efforts For Clean Energy
Ukraine effectively is shifting to a “fossil-fuel-free” economy to install thermal power plants and hydroelectric energy generators. According to the International Trade Administration, Ukraine has a goal to source 25% of its total energy from renewable sources by 2035. Biomass gasification through a thermal power plant under the project name ‘Chernihiv’ (after the name of a district) was used to produce energy from the waste of the woodworking industry of Ukraine.
This project claimed that the lower heat cost of generating energy from biomass (wood chips) was 25% lower than the energy generated from natural gas. As per a piece of recent news, the EU is putting efforts to lower the dependency on Russia’s natural gas imports by implementing the plan of Renewable Energy Sources Act (EEG). Under the act, the EU will promote the use of renewable energy, specifically the installation of new solar panels through Germany.
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Germany is one of the top 10 countries that produces its own solar panels to produce electricity. Even though China tops the chart for the top producing countries of solar energy, Germany is no lesser behind in this. Renewable power share generated by Germany accounted for almost 46% in 2020, as per Clean Energy Wire. Solar power in Germany accounted for approximate 8.2% of its gross-electricity production in 2019.
Ukraine might still be behind in the generation of solar power energy as compared to Germany. The electricity generation in Ukraine is mostly done through nonrenewable sources. Ukraine’s electrical energy exports count as a high worth in the global trade.
Ukraine’s energy generation comes from the sources such as fossil fuels and nuclear energy. In 2021, more than half of Ukraine’s electricity generation was possible through nuclear energy. Lithium reserves in Ukraine can prove to be a big resource for Ukraine and the whole EU’s self-dependence on electricity generation. Industry analysts suggest that Ukraine clean energy is a rich market in Lithium if dig deep, and would prove to be a big opportunity for both Ukraine and the EU, keeping aside the Russian invasion of Ukraine as it is still in Ukraine’s authority. It can be a good investment for uplifting Ukraine clean energy market as it has potential so far.
Trade and Environment: Hand-In-Hand For A Sustainable Future