Ukraine is preparing a €2 billion hydrogen project to supply fuel to the EU
Serhiy Yevtushenko, the owner of UDP Renewables, spoke about this in an interview with Delo.ua.
Ukrainian company UDP Renewables is in talks with a European investor regarding a major hydrogen project in Ukraine.
The project involves the production of green hydrogen worth around €2 billion.
The project envisages a full cycle – from electricity generation to hydrogen production and its delivery to the European Union.
According to UDP Renewables owner Serhiy Yevtushenko, the parties are close to signing an agreement.
He has not yet named the potential partner.
At the same time, this partner could become not only an investor but also a buyer of the product.
“This will be an agreement with a company that will purchase hydrogen. It must become an investor in this plant, produce in Ukraine and supply itself,” explained Yevtushenko.
The project is designed to produce around 50,000 tonnes of hydrogen per year.
At the same time, according to the businessman, potential demand in Europe is significantly higher.
“Under their hydrogen strategy, they want to buy 10 million tonnes from Ukraine. With an investment of €2 billion in this project, we will produce 50,000 tonnes,” noted the owner of UDPR.
Why Europe is looking at hydrogen again
Yevtushenko noted that many hydrogen projects around the world have recently been put on hold.
The reason is the complex economics of such projects and the high cost of production.
However, he said, the situation has begun to change due to new security circumstances.
“Many projects were put on hold because they are expensive and the economics of these projects will not be ideal. But look at how the security landscape has changed over the last quarter,” he said.
Yevtushenko emphasised that the energy sector is increasingly dependent on security of supply.
“We can see just how fragile the situation is when you don’t have the product yourself, when you depend on someone else and have to transport it thousands of kilometres,” he noted.
That is precisely why Europe is stepping up work on hydrogen projects again and seeking supply sources closer to its borders.
Where do they plan to produce hydrogen?
The project is planned to be implemented in the Volyn region.
According to Yevtushenko, a base for hydrogen production is being established in this region.
This is primarily linked to the development of wind energy.
Many new wind farms are being built in the Volyn region, which should provide cheap green electricity.
Separately, Yevtushenko emphasised the importance of access to water.
“Our site will be right on the Bug River,” he noted.
The company also plans to utilise existing infrastructure for hydrogen transport.
A gas pipeline runs alongside the site, which was previously used to transport Russian gas to the European Union.
“There’s practically no gas flowing through it now, but the pipeline is there,” said Yevtushenko.
Why logistics could be an advantage for Ukraine
According to the owner of UDP Renewables, it is the transport itself that could determine the competitiveness of Ukrainian hydrogen.
In many countries, logistics is the main challenge for such projects.
For example, in Australia, the cost of transporting hydrogen can be higher than the product itself.
The Ukrainian project is banking on the use of the pipeline.
“If we modernise the pipeline, transport will cost around €0.50 per kilogramme of hydrogen. And we will become highly competitive,” explained Yevtushenko.
According to him, Ukraine has an extensive network of gas pipelines that previously transported Russian gas to Europe.
Many of these pipelines are currently unused.
To launch the hydrogen project, approximately 1,250 km of infrastructure needs to be modernised.
Yevtushenko explained that a single pipeline could be converted into a hydrogen pipeline.
He also noted that five European countries are already working on the hydrogen project.
These include Germany and Austria.
Who is competing with Ukraine
Yevtushenko names Morocco as Ukraine’s main competitor in the European market.
At the same time, he believes that markets may be divided geographically.
“Morocco will supply Portugal, Spain, and at most France. Beyond that, transport becomes very expensive. And we will supply the central part of Europe,” the businessman explained.
According to Yevtushenko, countries with better natural conditions have an advantage in production.
However, they may be at a disadvantage in terms of logistics.
Ukraine lags behind its competitors in terms of generation efficiency.
“We’re not the sunniest country; I’d say we’re last. As for wind, we’re slightly better,” he noted.
This affects the cost of hydrogen production.
In Ukraine, it can amount to 6–7 euros per kilogram.
Another constraint is the cost of financing.
“The cost of capital in Germany and Ukraine differs. And that works against us,” said Yevtushenko.
War and the lack of insurance against such risks remain a key risk for investors.
What stage is the project at?
According to Yevtushenko, the project is at the stage of preparing a feasibility study.
At the same time, the company is in talks with an investor.
“If you want to develop an industrial facility, it takes about five years, and that’s if you’re very lucky,” he noted.
Thus, Ukraine is entering the green hydrogen market with worse production conditions than some of its competitors.
At the same time, these shortcomings can be offset by logistics, existing gas pipelines and proximity to the European Union.
As reported by ThePublic, Ukraine will receive €6 billion from the EU for drones in the second quarter of 2026.
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