EU Clears Major Italian Biogas Subsidy
The European Commission said March 1 it has approved under EU State aid rules an Italian biofuels support scheme worth €4.7bn, saying it will help meet EU climate change targets.
The approved Italian support scheme covers the production and distribution of advanced biofuels, including advanced biomethane – known as second and third-generation biofuels – for use in the transport sector and will run from 2018 until 2022. It will be financed by transport fuel retailers who are obliged by law to include a certain percentage of advanced biofuels and biomethane in their fuel blends. Similar arrangements are in place in other EU countries.
Inclusion of biomethane (or biogas) in the Italian transport scheme reflects the fact that Italy has 1mn natural gas vehicles, the largest fleet of such NGVs of any EU country, making up 2% of all vehicles on Italian roads. EU competition commissioner Margrethe Vestager said: "This is yet another step towards greater use of renewable energy in Europe and helping Italy's transition to more environmentally friendly fuel sources." The fuels in Italy's scheme are produced from feedstock that does not require farmland for their production, such as waste, agricultural residues, and algae.
Under its scheme, producers of advanced biomethane and biofuels receive a premium which allows them to compensate for these higher costs and compete with fossil fuels in the transport sector. The premium can go up if producers also distribute and liquefy advanced biomethane. The premium will be updated each year in relation to the costs to ensure that producers are not overpaid.