What is the Italian biomethane decree?
The Italian Biomethane decree signed on March 2, 2018 is aimed at promoting the production of biomethane to increase the share of green fuels in the transportation sector in Italy. With this decree Italy aims at achieving its overall 10% RES target fixed at the EU-level by 2020 together with its biofuel target of 9% by the same year.
The decree allocates €4.7 billion of funds for installations, new and existing ones, that introduce systems for the upgrading of biogas to biomethane becoming operational within the year 2022. The fund covers a maximum amount of 1,1 billion Nm3 yearly production and will be incentivized through the instrument of Green Certificates. Within this scheme, the gas retailers are obliged to include such biofuels in their offer and privilege the biofuels produced in the national territory.
To producers instead, is assured a minimum income for production (CIC Certificati di Immissione in Consumo di biocarburanti) and is allowed to rather resell the biomethane directly in the market or to have it withdrawn by the system operator for a fixed amount guaranteed for 10 years (375 euro every 10 Gcal of biomethane and every 5 Gcal of advanced biomethane). Advanced biomethane, has in this decree privileged regime since is produced from agricultural and urban biological waste.
How can you benefit from the Italian biomethane decree?
Producing biomethane in Italy becomes interesting in this framework because once an installation has entered into service and has been qualified by the GSE, the CIC allocation period is not subject to time limits and is available until the compulsory quota is operational. With a long term support for production and a wide vehicles market to satisfy, producing biomethane in Italy not only makes economic sense, but will help increase considerably the sustainability of transport.
Furthermore, existing biogas plants that want to reconvert their production to biomethane can benefit from a double incentive during the reconversion period that preserves the one on electricity generation up to 70% of production. If no connection to the grid is available or desired, as a producer you can also opt for the compression or liquefaction of biomethane, which infrastructural cost will be supported through a 20% supplement on the certificate.