Modern Theoretical Foundations of International Trade of Biomass and its Implications for Ukraine

Abstract

The energy dependence of Ukraine necessitates finding alternative energy sources, which primarily should take into account the resources available, the possibility of prospective studies and cost-effectiveness of such developments. One of considered alternative sources is the potential of biomass used for processing of different types of fuel. Analysis of international experience of energy use of biomass shows that this fuel cannot compete with conventional (fossil types). In other countries, development of the energy sector takes place with state support in the form of subsidies, grants and tax benefits. In Ukraine now there is no real economic support of bioenergy. But Ukraine has significant potential of biomass in the form of agricultural residues and waste wood processing, which can be used to produce heat and electricity. It should be noted that lack of public funding of these programs can be compensated by attracting foreign investors to increase their interest, and could become the country's competitive advantage in international markets. Given the above, it is reasonable to study the potential competitive advantages that are possible on the basis of international biomass trade between countries. Article objective is to present modern theoretical foundations of international trade with relation to biomass and to deliberate the potential economic benefits from Ukrainian economy.