Yefanov, head of the Ukrainian arm of German technology group Schenck, insists a European-style market in waste products of all shapes and sizes will emerge in this country that used to be an industrial power-house of the Soviet Union. "We won't sit on our hands, even though there isn't a civilized market for waste products," said Yefanov, who is targeting the cement industry with products for burning alternative fuels. Such ideas are far from being widely accepted in Ukraine, where President Viktor Yushchenko has faced a political crisis over a deal with Russia's Gazprom struck on January 4. The deal represented a compromise after Gazprom cut supplies to Ukraine on January 1, disrupting supplies to several European countries that receive gas via Ukraine. Kiev will now have to pay 95 dollars (79 euros) per 1,000 cubic meters (35,316 cubic feet) for a mix of Russian and Central Asian gas -- nearly double the previous rate but still much lower than mainstream European prices. Many saw Russia's move as punishment for the "orange revolution" in late 2004, in which Yushchenko set a new course towards hoped-for membership of the European Union and the North Atlantic Treaty Organization (NATO). But the World Bank has said that phased gas price increases would actually help Ukraine become more energy efficient, by encouraging a focus on truly competitive sectors and more rapid introduction of high technology. Energy waste is so great in Ukraine that overall energy consumption is 71 percent higher than the amount consumed by end users, the bank says. Some heavy industries look well placed to adapt, particularly metal producers that have access to rich coal and iron ore reserves. But analysts say more gas price rises are likely as the current deal only lasts for six months, and warn of grim prospects for some major firms. Hardest hit will be the energy-intensive chemical sector, as well as defense production -- a sector long closed to foreigners on security grounds. "Gas is 75 percent of the cost of our business," said Yevgeny Stepanov, spokesman for IBE Trade Corp, the US investor in major ammonia producer Azot. "At 90 dollars the price is still tolerable, but if it reaches 120 dollars it will be a crushing blow," he said, warning of dire consequences for the town of Severodonetsk, where the firm employs one in three working age people. Opposition parties pressed home such arguments this week, hoping to gain at parliamentary elections on March 26. They won a vote to sack Yushchenko's cabinet, but the president rejected the move, arguing it was unconstitutional. Analysts say the standoff may not be resolved until after the elections. Such instability has dampened hopes of a rush of foreign investment in Ukraine following its "orange" revolution, the head of the American Chamber of Commerce, Jorge Zukoski, said. The politicians currently challenging Yushchenko could prove ill-suited to handling such delicate problems as the gas crisis, analysts say. An attempt last year to introduce price controls on meat, sugar and petrol by Yulia Tymoshenko, a fellow revolutionary leader who served as prime minister before splitting from Yushchenko after he fired her in September, led to shortages of those products, Zukoski notes. Economic growth slumped to an estimated three percent last year from about 12 percent in 2004. Ukraine is gradually attracting foreign investors, particularly as labor costs rise in ex-communist countries that joined the EU in 2004, Zukoski says. But the path to a more agile, Western-style economy will be a long slog. "Those who thought it was going to be rosy overnight – their expectations were not met," Zukoski said. PIN/AFP