Market Handbook Biogas

EU Handbook Biogas Markets

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EU Handbook - Biogas Markets

Prepared by the Cross Border Bioenergy Working Group on Biogas technologies

October 2012

Project Coordinator

Project Partners

Consulting Partners

EuropEan Biomass association (aEBiom)Mr. Jean-Marc JossartEmail: [email protected]: +32 24 00 10 61Website: www.aebiom.org

Hungarian Biomass compEtEncE cEntEr (HBcc)Mr. Imre Németh; Email: obekk[at]invitel.huPhone: + 36 (0) 28 420-291Website: www.bioenergia-obekk.hu

slovak BioEnErgy association (skBiom)Mr. Josef ViglaskyEmail: [email protected]: +421 (0)45 5206 875Website: www.skbiom.sk

DanisH BioEnErgy association (Di BioEnErgi)Mrs. Kristine van het Erve GrunnetEmail: [email protected]: +45 (0)33 77 33 69Website: www.energi.di.dk

latvian BioEnErgy association (latBionrg)Mr. Didzis PalejsEmail: [email protected]: +371 (0) 675 22 399Website: www.latbionrg.lv

gErman BioEnErgy association (BBE)Mr. Thomas SiegmundEmail: [email protected]: +49 (0) 228 81 00 223Website: www.bioenergie.de

italian agroforEstry EnErgy association (aiEl)Mrs. Annalisa Paniz; Email: [email protected]: +39 (0) 49 88 30 722Website: www.aiel.cia.it

swEDisH BioEnErgy association (svEBio)Mrs. Lena DahlmanEmail: [email protected]: +46 (0) 8 441 70 83Website: www.aebiom.org

EclarEon consultantsMr. Christian GrundnerEmail: [email protected]: +49 (0)30 246 286 93Website: www.aebiom.org

impErial collEgE for sciEncE, mEDicinE anD tEcHnology (icEpt)Mr. Arturo Castillo-Castillo; Email: [email protected],Phone: +44 (0)20 7594 7312 Website: www3.imperial.ac.uk

BioEnErgy association of finlanD (finBio)Mrs. Mia SavolainenEmail: [email protected]: +358 40 7182026Website: www.finbio.fi

austrian Biomass association (aBa)Mr. Christoph RosenbergerEmail: [email protected]: +43 (0) 1533 07 97 25Website: www.biomasseverband.at

Table of ContentGlossary 4

1. Introduction to the Market 5

1.1. Aim and Methodology of the Cross Border Market Handbook . . 5

1.2. Introduction to Biogas . . . . . . . . . . . . . . . . . . . 6

2. Comparison of European Countries 8

2.1. Cross Border Scores of EU countries . . . . . . . . . . . . . 8

2.2. Basic Country Data . . . . . . . . . . . . . . . . . . . . . 10

2.3. Energy Policy . . . . . . . . . . . . . . . . . . . . . . . . 12

2.4. Feedstock Potential . . . . . . . . . . . . . . . . . . . . . 16

2.5. Business Cases . . . . . . . . . . . . . . . . . . . . . . . 19

2.6. Market Environment . . . . . . . . . . . . . . . . . . . . 24

2.7. Regulation . . . . . . . . . . . . . . . . . . . . . . . . . 28

2.8. Project Financing . . . . . . . . . . . . . . . . . . . . . . 30

2.9. Readiness for Uptake . . . . . . . . . . . . . . . . . . . . 31

3. Country Attractiveness - In Depth Analyses 33

3.1. Austria . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

3.2. Germany . . . . . . . . . . . . . . . . . . . . . . . . . . 46

3.3. Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

3.4. Hungary . . . . . . . . . . . . . . . . . . . . . . . . . . 83

3.5. Denmark . . . . . . . . . . . . . . . . . . . . . . . . . . 97

3.6. Sweden . . . . . . . . . . . . . . . . . . . . . . . . . 108

3.7. Latvia . . . . . . . . . . . . . . . . . . . . . . . . . . 119

3.8. Finland. . . . . . . . . . . . . . . . . . . . . . . . . . 129

4. Annex 139

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Glossary

BDEW- Bundesverband der Energie- und WasserwirtschaftBM - BiomethaneCDM – Clean Development Mechanism CHP – Combined Heat and PowerCNG - Compressed Natural GasDBFZ - Deutsches BiomasseforschungszentrumDC - Direct CurrentDEA - Danish Energy Agencydena - Deuscthe Energie AgenturDERA - Danish Energy Regulatory AgencyDIA - ‘Declaration of Activity Start’ in Italian biogas plant approval processesDKK - Danish currency: KroneEEG - Erneuerbare Energien GesetzEIB – European Investment BankEMU - European Monetary Union GC - Green CertificatesGHG - Greenhouse GasHBA - Hungarian Biotechnology AssociationIFC -International Finance CorporationKÁT system - current Hungarian support program for energy from RSLBA - Latvian Biogas Association LIAA - Investment and Development Agency of LatviaMETÁR system- Hungarian support program for energy from RS, which is supposed to replace the current KÁt

system in January 2013NEFCO - Nordic Environment Finance CorporationnREAP - National Renewable Energy Action PlanÖNACE - Austrian classification of economic activities of companiesPAN - National Action Plan for Renewable EnergiesPJ - PetajoulePSO - Public Service Obligation Redubar - EU project of Intelligent EnergyRES - Renewable Energy SourcesRS - Renewable SourcesSaeima - Parliament of LatviaSEK - Swedish Currency: KronaTPES - Total Primary Energy SupplyVVM - Evaluation procedure of how a project affects the environment

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upcoming events.To achieve these goals, the consortium of the Cross Border Bioenergy project undertook a detailed study of the five different bioenergy markets in Europe. Under participation and contribution of many international bioenergy companies and stakeholders, the consortium identified about 50 relevant criteria and summarized them in 8 main categories. The 8 categories cover the important factors influencing the bioenergy sectors, namely:• Basic country data• Energy policy• Feedstocks• Business case• Market environment• Regulation• Project financing• Readiness for uptakeThe identified criteria have been concretized by more than 300 indicators, which are weighted according to their respective importance. By doing so, scores for each indicator, criterion and category as well as an overall sector score were generated. To ensure scientific reliability the Imperial College London was obliged with working out a sound methodology defining the scoring and weighting mechanisms. A method was worked out to process these criteria and find appropriate indicators, and a comprehensive template was produced.The results that are presented in this

1. IntroductIon to the Market

1.1. aIM and MethodoloGy of the cross Border Market handBook

The general objective of the Cross Border Bioenergy project is to help SMEs to evaluate bioenergy markets in Europe with regards to cross-border investments, thereby making SMEs less dependent on fluctuating domestic market conditions and strengthening the whole bioenergy industry. Five different bioenergy market sectors are considered: biogas, small scale heating, district heating, CHP and biofuels for transportation. The project will contribute to member states’ efforts to reach their targets set in the RES directive, to benchmark national RES action plans, and possibly to implement flexibility projects as mentioned in the RES directive. With this project bioenergy companies will get a ‘navigator’ on potential markets in Europe, and get necessary tools to develop a market entry strategy. The GIS-Tool helps bioenergy companies in comparing European markets and, based on this comparison, in defining possible target markets. Following this first step, the market handbooks offer more detailed information about single countries and regions in Europe and furthermore, describe and explain the situation in the different bioenergy markets in Europe. The B2B-plattform supports direct action by facilitating contacts and networking between bioenergy stakeholders and companies. In this section of the website, concrete offers and inquiries can be posted and a calendar informs about interesting

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1.2. IntroductIon to BIoGas

Biogas is seen to be one of the key technologies both to reach EU member states targets for renewable energies in 2020 and to meet their requirements within the European organic waste management directive. Regulatory restrictions on waste management and the introduction of dedicated support schemes for renewable energies made the biogas sector a booming market in many European countries. Governments have set up incentive systems for paying for electricity (feed-in tariffs, green certificates, tenders). In a number of countries, the biogas market is stimulated by additional payments for the use of energy crops. They aim to promote the increase in renewable energy production, while the policy also enables farm holdings to reduce their energy dependency and diversify their incomes in the event of falling cereal, milk or meat prices. Other countries question the environmental soundness of using energy crops such as maize for methanisation, preferring to convert already existing waste feedstock.1

1 EurObserv’ER, http://www.eurobserv-er.org/pdf/baro200b.pdf

handbook and on the website are based on official statistics, national action plans, support schemes and on direct information gathered from bioenergy experts from the single countries in interviews and enquiries undertaken especially for this project. As many different reliable sources have been included in the research process, the results offer a comprehensive picture of the bioenergy markets in Europe.The full list of categories, criteria and indicators chosen for the biogas sector is available in the biogas sector handbook, provided for download at www.crossborderbioenergy.eu under the rubric ‘publications’. The annex furthermore provides a table containing the leading questions on the basis of which the market handbook was built up on.

http://www.crossborderbioenergy.eu

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2. coMparIson of european countrIes

Top Ten Country Scores - Biogas (November 2011)

The Top Ten Country Score gives an overview of the ten most attractive countries in the biogas sector. All indicators are included in this overall score, which can be a first indicator of attractiveness.

2.1. cross Border scores of eu countrIes

Top Ten Country Scores - Biomethane (November 2011)

The Top Ten Country Score gives an overview of the ten most attractive countries in the biomethane sector. All indicators are included in this overall score, which can be a first indicator of attractiveness.

Source: all tables and figures that are not cited otherwise are based on datat from the CBB project: http://www.crossborderbioenergy.eu (November 2011)

http://www.crossborderbioenergy.eu

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‚Overall attractiveness of European Countries for biogas‘

The map displays the overall attractiveness of the EU 27-member states‘ biogas markets. The darker the green, the higher the attrac-tiveness.

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Biogas is a renewable energy source (RES) that is technically fully established, producing heat, steam, electricity and vehicle fuel. The main utilisation of biogas is governed by national frameworks, such as the tax system or feed-in tariffs. Worldwide, biogas is mainly used for electricity production. A growing portion of biogas is used for vehicle fuel. There is no doubt that the role of biogas in the European energy mix is steadily growing. Biogas facilities can be ramped up and down at the touch of a button. As renewables increasingly make up a greater share in energy supply, this function becomes more important allowing the coverage of peak demands and the balancing off down periods of other renewables.

2.2. BasIc country data

The analysis of the countries‘ basic data is based on the analysis of the geographical and climatic conditions, demography and logistical infrastructure. The figure below shows the CBB basic data score for all European Countries.

All EU countries have a biogas sector that produces energy, but just ten countries provide 85% of the total biogas production in Europe. The level of biogas production does not always correlate with the size of the country (see Figure ‘Main European Producers’).Biogas in Europe is produced in large scale digesters found preliminary in industrial countries for sewage sludge treatment and stabilisation purposes, as well as in small scale digesters on individual farms. Biogas is also produced during anaerobic degradation in landfills which is then referred to as landfill gas.Many of the larger scale digesters are using the newest technologies. Biogas is a real success in Germany where the number of biogas plants

‚Scoring of the basic data of EU countries with regards to biogas projects‘

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Netherlands experience very positive market developments which encourage other countries to follow the example.

Figure ‘Main European Producers’: Biogas production in the most important European producer countries in ktoe in 2009

Source: European Biogas Association – EBA

‚Scoring of the density of gas transmission and distribution networks (km/km2)‘

reached more than 7200 in 2011. Other best practice countries like Austria, Denmark, Sweden, Switzerland and the

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In Germany the share of RES in the electricity market reached 20.1 % in 2011. Biogas already provides more than 5% of the total electricity demand. If the development of the recent years continues, an increased share of RES in the entire electricity market up to 35% is possible by 2020. The German government aims at reaching a share of RES on final energy consumption of approximately 20% in 2020, thereof 35% in the electricity sector and rising to 80% in 2050. Due to its characteristics of storable feedstock and a flexible energy supply, bioenergy will play a key role in this strategy. Amongst the different bioenergy technologies, the amount of electricity produced by biogas plants (including sewage and landfill gas) is planned to be increased from 13.9 TWh in 2010 to 23.4 TWh in 2020, requiring an increase of capacity from 2.5 GW to

2.3. enerGy polIcy

The European Policy category analyzes how ambitious the NREAPs, the appropriate measures proposed by country and the political will to develop the RES-sector are. On the basis of these results, the Cross Border Bioenergy consortium scores the EU countries as depictede in the graph below.

There is a significant potential for the development of RES in the EU, and the use of biogas to produce renewable electricity and heat can substantially contribute to the increase of the share of RES in the EU energy mix. RES used for electricity production received relatively more attention in Europe to those used for heating and cooling purposes. This is surprising since the demand for heat consumes the largest share of the primary energy supply.The EU has set the following objectives for its member states until the year 2020: to reduce greenhouse gases (GHG) by 20 % compared to the year 2005, to increase the share of renewable energy by 20 % and to increase the efficiency by 20 %. These targets are binding but divided individually among the member states.

‚Scoring of the energy policies in the biogas sector‘

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‚Country scoring NREAP biogas‘

certificates. As an alternative, small systems and expensive technologies like photovoltaic generation may participate in various kinds of price schemes, which may be more cost-efficient than the participation in the certificate system. The Italian nREAP is denominated ‘Piano di azione nazionale per le energie rinnovabili dell’Italia’ (PAN, National Action Plan for Renewable Energies). For 2020, the target for biogas set by nREAP is 0,51 Mtoe (see more below – Chapter ‘Biogas in Italy’).Hungary is subject to a binding target of supplying 13 % of its total energy demand from RES by 2020. According to the Renewable Energy Strategy for 2007-2020 with which the target is supposed to be reached, the use of RES must be increased from 55 PJ in 2006 to 186.4 PJ by 2020. However, in Hungary’s National

3.8 GW in the same period.1

Due to these requirements Austria is bound to reduce its GHG emissions in the sectors covered by the ETS, by at least 21 % and in those sectors not covered by the ETS by at least 16 %. Furthermore, it has to increase the share of RES of its total energy consumption to 34 % – the share in the transport sector should be at least 10%.In Italy, electricity generated from RES is mainly promoted through a quota system (certificati verdi). The quota system obliges all producers and importers of electricity to generate a certain quota of electricity from RS or purchase a certain amount of green

1 Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, http://www.bmu.de/files/pdfs/allgemein/application/pdf/nationaler_aktionsplan_ee.pdf

‚Country scoring NREAP biomethane‘

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‚Targets for biogas for heat and electricity‘

‚Proposed measures for CHP electricity in the NREAP‘ (Score between 0 and 10 beased on expert interviews)

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Energy Efficiency Action Plan, approved in December 2010, the government has set an even more ambitious target of 14.65 %. The 2010 target of 3.6 % was actually achieved in 2007, mainly due to the increase of biomass utilisation. By 2020, the potential biogas production is expected to reach 32 MW, which would reflect 5 % of the total renewable energy generated in Hungary.In the UK the biomass sector plays a strategic role: Electricity production from RES in the UK is regulated with a combination of feed-in tariff and volume control. The volume control is a kind of quota obligation with a trade of certificates.2

The Swedish government aims at reaching a share of RES in final energy consumption of approximately 50% in 2020, and a balance of zero net CO2 emissions by 2050. With the introduction of the carbon tax in 1991, Sweden installed a strong policy instrument that has led to a large market gain for cheaper domestic bioenergy. The Kingdom of Sweden promotes renewable energy through various incentives, the most important of them being the quota system, which is based on a certificate trading system. Furthermore, tax regulation mechanisms and a grant scheme have been introduced. The biogas sector, however, is not supported in an adequate way compared to other RES.

2 www.res-legal.de

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2.4. feedstock potentIal

This category analyzes the biomass potential for the development of biogas projects. The graph below shows the scores for all EU countries.

The overall potential of biomass for energy in Europe is much bigger than its present use, but this potential still has to be developed at the local, regional, national and international level. Biogas is produced during an anaerobic digestion of organic substrates. It can be produced from most types of organic raw material, except for lignin, which is not anaerobically degradable. The most common substrates for biogas production in Europe are agricultural products (energy crops) and by-products, such as manure, followed by various kinds of biowaste, including sewage sludge, source separated municipal waste, and organic fractions of household and industrial waste. Trends show that the use of raw materials for the production of biogas will change more and more from

‚Scoring of the municipal and commercial bio-waste potential‘ (Tons/year)

‚Feedstock potential for the production of biomethane‘

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Figure ‘Outlook Bioenergy’: Outlook for bioenergy sources in Mtoe

Source: AEBIOM

agricultural biomass to waste materials (see Figure ‘Outlook Bioenergy’).The theoretical potential of the primary energy production from biogas in 2020 is 166 million toe.3 As can be seen from the Table ‘Biogas Production’, biogas sources vary distinctively among the members of the EU. Germany, Austria and Denmark produce the largest share of their biogas in agricultural plants using energy crops, agricultural by-products and manure, whereas the UK, Italy, France and Spain predominantly use landfill gas. This source might not increase further in the medium and longer term as the EU directive on landfill waste foresees a gradual reduction of the land filling of biodegradable municipal waste (by 2016 to 35% of the level in 1995).3 Source: AEBIOM

‚Feedstock potential for the production of biogas‘

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Table ‘Biogas Production’: Primary biogas production in the EU 2006 and 2007 in ktoe.

Source: AEBIOM/EurObserver ER 2008

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2.5. BusIness cases

The business case analyzes the price levels, subsidy guarantees and support schemes that affect the viability of bioenergy technology applications. In the Figure ‘Business Case’, the scores of all EU countries in this category are shown.

‚The scoring of the business case with regards to biogas‘

‚The scoring of the business case for biomethane projects‘

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gas, coal, fossil oil and nuclear energy although prices for fossil based energy have increased significantly within the last decade. Prices for biogas electricity vary significantly due to different plant sizes, feedstock used, and technologies applied. In general, feed-in tariffs of the EEG reflect total production costs, from which spot market prices for conventional electricity has to be subtracted to get the extra costs of biogas-electricity. Feed-in tariffs for biogas range between 6 ct/kWh to 25 ct/kWh in 2012. Average extra costs of all bio-based electricity (solid biomass + biogas) in 2011 was 12.79 ct/kWh according to BDEW while the spot market price for electricity ranged somewhere between 5 and 5.5 ct/kWh. To enable a profitable operation of bioenergy and biogas plants nonetheless, the German government

The future of the development of biomass depends to a large extent on the incentives created by the EU member states. The potential of bioenergy technologies to further penetrate the electricity and heat market depends on:• The sustainability of biomass sources• The competitiveness of energy or other products based on biomass• The rate of progress of biomass tech-nologyThe case of biogas generally shows that feed-in tariffs and other incentive schemes can be very effective to contribute to huge market growth in the biogas sector. In Germany, however, biogas and biomethane - depending in which markets biogas is used - still rely on support to be competitive with natural

‚Map of fossil fuel prices across EU countries‘ ‚Map of operations support‘

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In general, the Austrian feed-in law also offers excellent framework conditions by providing investment security with its 15 to 20-years payment period guaranteed for the tariffs, prioritized grid access and a purchase obligation of the grid operator. The feed-in tariffs for biogas in 2012 (compare Table ‘Support Schemes’) are the same as in the previous year. Appliances up to 250 kW receive 18.5 ct/kWh, appliances between 250 and 500 kW are paid 16.5 ct/kWh, and bigger biogas appliances get 13 ct/kWh. If heat is also used, additional 2 ct/kWh are paid. The usage of waste reduces the tariffs by 20 %. Appliances up to 250 kW

introduced the Renewable Energies Law EEG in 2000, which guarantees a fixed tariff for produced electricity fed into the electricity grid. The tariffs are differentiated by technology, capacity and feedstock used and paid for a 20-year period. From 2013 on, each year tariffs for new biogas plants are lowered by 2% to incite technology improvement and efficiency. Since 2012, biogas plants up to 150 kWel capacity are eligible to receive a tariff of 14.3 ct/kWh, 12.3 ct/kWh for a capacity of up to 500 kWel, 11 ct/kWh for a capacity of up to 5 MWel, and 6 ct/kWh for a capacity of up to 20 MWel.

Table ‘Support Schemes’: Support schemes for biogas in EU countries in 2012

Source: www.res-legal.de

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(feed-in-tariff = 0.28 €/kWhe lasting for 15 years) has induced many farmers to invest in CHP plants with biogas. With regards to the incentive schemes, the bottleneck is represented by the money to be paid for stimulating all RES. The overall budget for electricity production is based on the electric tariff which is paid by all Italian electricity consumers (private households, industries, public structures, etc.) to the electricity service company (ENEL). The economic crisis and the increasing demand for the subsidies in place for all RES (including photovoltaic, solar, wind, hydro, biomass, etc.) put the entire system under pressure pushing policy makers to decrease the level of subsidies and to find other systems for developing RES.

must use a minimum of 30 % manure. An utilisation ratio of at least 60 % is required to get a subsidised tariff. Under these conditions new appliances are only cost-effective when the raw material supply is excellent and the produced heat is used.The investment costs of biogas plants in Italy can range from 250 to 700 €/Nmc per anaerobic digester, or between 2500-7500 € per kWe installed. A typical investment will be amortized in about 4-8 years. The subsidies for the operation of biogas plants are based on a feed-in-tariff instrument for biogas plants with CHP units up to 0.999 MWe. The tariff has not been set by the PAN but it has been fixed by the national Italian Law no. 99/2009. The great incentives for electricity production from biogas

‚Legally guaranteed price for electricity from biogas plants of 500 kW capacity in 2010‘ (€cent/kWh)

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‚Legally guaranteed price for electricity from biogas plants of >500 kW capacity in 2010‘ (€cent/kWh)

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2.6. Market envIronMent

The chart below shows the EU countries scores based on the analysis of the energy market dimensions in these countries. Here, the consortium of the Cross Border Bioenergy project analyzed the energy market, transferable technologies, as well as logistics and access to the customer base through established networks.

sizes from a few kilowatts up to several megawatts. Modern engines have good electric efficiencies up to 48% at sizes of 250 kW or more. Micro-turbines in the range of 25kW to 150 kW have been successfully introduced in biogas applications. They have lower electric efficiencies (26% to 34%), however, they are marked by low maintenance cost and low emissions.The size of a biogas plant has to be adapted to the individual situation, especially to the availability of input material in close proximity to the facility. Units of agricultural biogas plants normally reach sizes of 100-150 kWel. Larger plants are economic if the input material is readily available in close range, for example cattle breeding, fields of dedicated

Biogas can be used in more or less all the applications that are developed for natural gas. For some of the applications it may have to be upgraded. Injection of biogas into the natural gas grid will result in an improved security of supply. This is important due to Europe’s increasing dependence on imported natural gas. Only two thirds of European gas consumption is covered by gas from the EU. The benefits of gas as fuel have resulted in increased use. Natural gas accounts for 23% of Europe s energy consumption in 2010. More than 90% of Europe s biogas plants operate CHP plants to produce heat and electricity. The most common technology for power generation is internal combustion. Engines are available in

‚Scoring of EU-countries‘ market environments for biogas‘

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Württemberg and Schleswig-Holstein. In 2011, 80 biogas plants fed biogas into the grid.4 More than 4.2 million households are provided with electricity produced from biogas. More than 3% of the whole German electricity consumption is produced with biogas.By the end of 2009, electricity generation systems based on solid biomass with a capacity of 313.4 MW, biogas plants with a capacity of 77 MW, systems based on liquid biomass with a capacity of 9.6 MW, and plants working with landfill- and sewage gas with a capacity of 21.2 MW were established in Austria. These plants generated 2,566 GWh in total. The electricity was fed into the grid and subsidised by the Renewable Energy Act. Additionally 1,100 GWh of electricity from black liquor and 600 GWh from sewage sludge, carcass meal and other renewable waste were generated without subsidisation. In total, 4,300 GWh of electricity were generated from biomass sources.The potential of biogas in Italy has been estimated at 20 TWh/year corresponding to the installed capacity of about 2.700 MWel. In May 2011, 521 biogas plants, of which 130 are under construction, were inventoried with a total power installation of around 350 MWel. These plants are mainly located in northern Italy.In Hungary natural gas, of which 80% are being imported, has the biggest share in the energy consumption mix (44%). Hence, the substitution of natural gas by domestically produced biogas has become a particularly pressing 4 German Biogas Association: www.biogas.org

biogas crops or waste water treatment facilities. Especially economies of scale play an important role for upgrading the raw biogas to natural gas standards.The generation of biogas is growing as never before – new strong markets emerge especially in Eastern Europe. More and more countries create the necessary general frameworks for a fast growth of the national biogas industries. The prototype for this restructuring is the German EEG. The system of fixed feed-in tariffs for electricity from renewable energies is gradually establishing throughout Europe.In Germany there are more than 7800 installed biogas plants. They produce more than 3300 MWel. Most of the plants are located in rural areas or in regions with high agricultural potential like Bavaria, Lower Saxony, Baden-

‚Map of the energy sector in the EU‘

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issue. The Hungarian National Renewable Energy Strategy (nREAP), therefore , places special emphasis on promoting biogas production and use. Hungary is among those EU countries that have a considerable biogas potential. Biogas production and the utilization of this potential is still a task for the future. Before 2003 Hungary did not have a single agricultural biogas plant. Biogas production and its utilization for the production of electrical energy had mainly to do with sewage treatment plants until recently. During the last years, however, a strong increase in biogas production has been recorded.In Denmark in 2010, biogas contributed 4,278 TJ to the production of renewable energy, representing 3 % of the total

renewable energy production. So far, the production is spread out to 20 large common biogas plants and 50-60 farms operating biogas plants. The common biogas plants have the capacity to treat 100-600 tons of manure and other kinds of biomass per day. The biggest common biogas plant treats manure from 50-100 livestock herds in the area. Farms with biogas have capabilities within a range of 10-100 tons of manure per day.In Sweden Bioenergy is the country’s largest energy source and around 140 TWh thereof are used annually. Bioenergy surpassed oil as the major energy source in 2009, and bioenergy usage is bigger than that of hydro and nuclear power combined. The majority is used by industry, followed by domestic

‚Growth rate of biogas in the heat market over the last 4 years‘

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small-scale heating and district heating systems. In 2010, 229 biogas production units were installed in Sweden. Of these, 135 were sewage plants, 5 industrial plants, 18 combined fermentation plants (organic waste and manure) owned by municipalities, 57 collection sites for remnant gas from closed landfills, and 14 farm instalments. The largest plants are made up of industrial and sewage plants, whilst landfill and farm instalments constitute the smaller plants. The largest biogas production can be found in the large cities, indicating the large dependence on organic waste and sewage plants.

‚Overview of the expected additional gas demand until 2020‘

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The financial support for biogas and biomethane used in CHP is complemented with regulations for grid access, grid transmission and sharing of grid connection costs. For the electricity grid, rules are defined within the feed-in laws itself. Furthermore, there are different regulations in every country that engineers have to take into consideration. There are different limiting values for noise emissions, emissions into the air, and various public authorities on the local, regional and national level who pass certain instructions.In Germany there are the following laws which have to be followed: for instance GasNZV, GasNEV, ARegV, Strom NEV etc. In these regulations, grid operators

2.7. reGulatIon

This category refers to additional mandates, rules and authorisation procedures that impact the stability and practicality of operations in the bioenergy industry, such as efficiency standards or pollution limits. This category was only analyzed in those countries that participated in the Cross Border Bioenergy project consortium: Austria, Germany, Denmark, Hungary,Latvia, Finland, Italy, Sweden and Slovakia. Estonia, Lithuania, Slovenia and Romania were also analyzed but in less detail.

‚Scoring of the regulations in the biogas sector‘

‚Map displaying the adequateness of appro-val procedures‘

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are obliged to feed RES-electricity, respectively biomethane, into their grid, to extend their grid if required, and to transmit RES electricity with priority through the grid. Costs for the connection of the biogas plant to the nearest feasible connecting point have to be covered by the biogas plant operator.In Austria there are a variety of rules and laws for CHP-plants operating with biomass. Some of the most important regulations are declared in the ‘Green Electricity Law Austria 2012’, the ‘KWK-Gesetz’ (CHP law), and the ‘Emissionsschutzgesetz für Kesselanlagen – EG-K’ (emission law for boiler plants in Austria).

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2.8. project fInancInG

This category addresses elements of export feasibility, such as a good credit market in the country, good conditions as a target for export as reflected in the Euler-Hermes Rating for instance. The graph below shows the scores for all EU countries.

As the result of the financial crisis from mid 2008 onwards, multilateral banks, such as the EIB have filled a void on the project finance market and have increased their involvement in supporting RES projects significantly. As an example, the EIB’s loans to the RES sector reached over €4 billion in 2009.Capital availability in the renewable sector from the banks is influenced by a number of factors:1. Capacity of banks to lend long-term to the renewable energy sector;2. Ability of banks to recycle that loan capital through secondary loan markets to other long term institutional lenders, such as pension funds, insurance funds or other capital markets (through financial mechanisms through project loan securitizations etc.);

‚Scoring of the project financing sector in the biogas and biomethane sector‘

‚Standard and Poor‘s Ratings in the EU‘

3. Impact of bank regulations on asset-liability mismatches.

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success must be found by using existing technologies.Renewable energies in general are warmly welcomed by society, and as bioenergy is the largest energy source in Europe, the market is well aware of the importance of bioenergy.The accelerated development of RES in Europe is accepted by a huge majority. However, when it comes to biogas, opposition on local bases has intensified in recent times. Several biogas projects had to be stopped due to local initiatives and heavy opposition. Nevertheless, such incidences remain

The readiness for uptake for the biogas sector in Europe is considered to be good, though new projects need to be planned and implemented in a considerate way under participation of local inhabitants and stakeholders.Currently under preparation, the Biofuels Technology Platform in coordination with other Biomass Associations, the EU’s Bioenergy Industrial Initiative is one such tool to secure the long term objectives running in close cooperation with the EU Commission and industry stakeholders. Technological development will be important for the future of the industry, but in the meantime, ways to commercial

2.9. readIness for uptake

This category was only analyzed for the countries partners of the CBB project. It includes the availability of support these countries have, such as industry associations and it also reflects the reality of the potential customer base in terms of awareness, willingness to adopt the technology, as well as information about the maturity of the market.

‚Scoring of the readiness for uptake of biogas and biomethane‘

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to be exemptions rather than common practice. The main arguments against biogas are: Firstly, there are concerns on increased truck traffic for the feedstock supply on improper local roads, meaning a higher risk for inhabitants and a higher stress for roads which may not be suited for high weights. Secondly, as the biogas production is the result of biological decomposition processes in the fermenter, residents are worried about odour annoyances. Thirdly, as biogas production in Europe is often based on energy crops, inhabitants and environmental NGOs are opposed to the increased cultivation of corn for energy purposes due to environmental reasons (lower bio-diversity, impact on landscape picture, many areas with high-growing plants) as well as due to concerns about utilizing food-suitable crops for energy purposes.

‚Map displaying the public acceptance of bio-gas and biomethane projects‘

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3. country attractIveness - In depth analyses

3.1.1. Country Score

3.1. austrIa

Country Score Upper Austria - Biogas (November 2011)

In the general sco-ring for sector, Aus-tria - Upper Austria is rated place 55 out of total 81. The un-derlying categories that influence this result are displayed in the bar chart.

Country Score Upper Austria - Biomethane (November 2011)In the general sco-ring for sector, Aus-tria - Upper Austria is rated place 53 out of total 81. The un-derlying categories that influence this result are displayed in the bar chart.

Austrian Biomass Association (ABA)

Christoph Rosenberger

Franz Josefs-Kai 13

A-1010 Wien

Tel.: +43-1-533 07 97 25

Email: [email protected]

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republic shares borders with Germany and the Czech Republic in the north, the Slovak Republic and Hungary in the east, Slovenia and Italy in the south, and Switzerland and Liechtenstein in the west.8.4 million Austrian inhabitants were counted at the beginning of 2011. By 2050, the figure should reach ca. 9.4 million, according to the projection. The municipality with the largest population is Vienna, which had 1.7 million residents at the beginning of 2011. A fifth of Austria’s population thus lives in the federal capital. Next come the provincial capitals Graz (262.000 residents), Linz (189.000 residents), Salzburg (148.000 residents), and Innsbruck (120.000 residents).Austria’s weather is characterized by a transitional climate. Consequently, an oceanic climate with moist westerly

3.1.2. Basic Data1

Austria is a democratic republic. All of the political institutions established by the constitution are elected in three elections: Citizens vote the Federal President, the National Council and the Provincial Parliaments.The country consists of nine federal states (see Figure ‘Map Austria’). The capital and largest city is Vienna. Austria has a land area of 83.879 km2 (573 km between the western and easternmost points of Austria, the longest north-south stretch totals 294 km) and is, thus, somewhat smaller than Portugal and Hungary and somewhat larger than the Czech Republic. Located in the southern part of Central Europe, the

1 Statistics Austria: Austria – data, figures, facts, Vienna, 2011; http://www.statistik.at/web_en/pub-lications_services/austria_data_figures_facts/index.html

Graph ‘Map Austria’: Austria as a federal state

Source: Statistics Austria: Austria – data, figures, facts, Vienna, 2011

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Austria is bound to:• reduce its GHG emissions in the sec-tors covered by the ETS, by at least 21 % and in those sectors not covered by the ETS by at least 16 %,• increase the share of renewable ener-gy sources of the total energy consump-tion to 34 % – the share in the transport sector should be at least 10 % • reduce the energy consumption by 20 % compared to the prognosticated level of the year 2020 by improving the ener-gy efficiency.The following Table ‘Consumption Bionenergy’ shows the development and the expectations of bioenergy consumption in Austria from 2005 to 2020.The Green Electricity Act in Austria provides the main framework for the electricity generation from biomass and biogas. It is assumed that both, the electricity generation from solid biomass and from biogas can be extended by 100 MW, if the Green Electricity Act creates appropriate boundary conditions that allow an economic system operation. With these systems additional 1,300 GWh of green electricity could be generated.The most important measures for a further expansion of green power are:• Longer-term predictability of frame-work conditions is required. In the inte-rests of long-term development, stable framework conditions should be created.• The power generation from solid bio-mass should focus on the decentrali-

winds predominates in western Austria, and as one moves eastward, the climate becomes increasingly continental with decreasing precipitation, hot summers, and cold winters. In addition, the local climate is strongly influenced by the altitude, local topography, and exposure to the prevailing westerly weather conditions.Useful links:• ÖNACE – Austrian classification of eco-nomic activities of companies • Statistics Austria

3.1.3. Energy Policy

As a contracting party of the Kyoto Protocol, the EU is obliged to reduce the GHG emissions in the period from 2008 to 2012 by 8 % compared to Kyoto base year of 1990. Austria has to reduce its emissions by 13 % according to the EU internal burden-sharing. In the year 2009, GHG emissions in Austria reached 80.1 million tons - 11.3 million tons more than the allowed averages for the period 2008 to 2012. In consideration of the EU Emissions Trading System (EU ETS), the projects under the Joint Implementation and the CDM, and the balance from afforestation and deforestation, the deviation from the target sums up to about 5 million tons of CO2-equivalents. So the over-all gap from the years 2008 and 2009 results in 11.9 million tons of CO2-equivalents. To keep the over-all gap as small as possible the implementation of effective domestic measures is necessary.In oder to meet the EU requirements,

http://www.usp.gv.at

http://www.usp.gv.at

http://www.statistik.at/

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to develop new technologies for low capacity-systems. Only if these compa-nies can establish their products on the domestic market, they are able to use the enormous export opportunities. Ad-ditionally, especially small-scale facilities

sation of plants. Hence, plants with a capacity of less than 500 kW are re-commended, because efficient regional supply concepts are more reasonable than nationwide mega-projects. Dome-stic companies are working intensively

Table ‚Consumption Bioenergy‘: Consump-tion of Bioenergy in Austria – Develop-ment & Potential from 2005 to 2020

Source: Statistics Austria, Energy Balan-ces 1970-2009, Poten-tial Analysis, Austrian Biomass Association

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3.1.4. Feedstock

The forest cover is particularly high in Austria: Almost half (47.6 %) of the Federal area is covered by forest. This reflects 3.99 million ha or 39.926 km2 of the Austrian Republic.2 National agriculture and forestry not only forms the backbone of a viable rural community, but also reflects the cultural tradition of the nation. Structural changes to the economy have obviously had an impact on agriculture and forestry: As in most other EU member states, a steady downward trend in the number of operations is accompanied by a simultaneous increase in the average size of the operations. The total output of agriculture and forestry accounted for € 8 billion in 2010. The Table ‘Land Use’ shows the distribution of the land use in Austria, subdivided to the federal states. The agricultural sector plays an indispensable role. Among other things, this includes ensuring nutritional produce, preserving the cultural landscape, landscape management and maintaining its function as an energy source. The ability to compete within the EU is achieved through sustainable agriculture, and through an increasing specialization of agricultural and forestry operations. The coupling of agriculture and forestry with the tourist industry, and the increasing cultivation of energy crops to promote sustainable raw materials, guarantees the conservation of an economically healthy, productive, farmer-oriented agriculture and forestry

2 Federal Research and Training Centre for Forests, Natural Hazards and Landscape; http://bfw.ac.at

in existing biomass heating plants and industrial plants offer a great potential to switch from only heat generation to combined heat and power. • For the green electricity generati-on from solid biomass new sources like short-rotation wood, corn cobs and other agricultural residues should be used to complement the raw material range. • When raw material for biogas plants is produced, it is important to avoid a competition for agricultural land with the food and feed production, since food production has the highest priority. Both - food and bioenergy production – are possible when well planned. A conside-rable potential for a further expansion of biogas usage arises from higher yields through the use of fertilizers as well as the use of grassland biomass and catch crops. Small systems based on those raw materials, should be considered in the Green Electricity Act. This manage-ment measure would also lead to decre-asing carbon emission in the rural areas. In larger biogas plants the gas produc-tion should focus on fuel production or it should be fed into the gas grid.In the future the cascading use of resources is important. Accruing residual products should be used in biogas plants to generate energy.

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This corresponds to 7.2% of the arable land and 1.4 % of the grassland. In addition catch crops can be produced on 23,000 ha and harvesting residues can be taken from 150,000 ha. The increased use of biomass wastes and residues from agriculture like dung also provide additional energy potential.In 2009 about 25,000 ha of arable land and grassland were used to produce raw materials especially for biogas plants, mainly energy crops such as corn silage. The use of catch crops and grassland for energetic purposes was estimated at 1,000 ha. It is estimated that the energy crop production on arable land will increase (e.g. silage maize, millet) to around 45,000 ha by 2020. The produced energy amount in form of biogas could increase from 4.3 PJ in 2009 to 7.9 PJ in 2020. If in 2020 4 % of the corn cropland (about 23.000 ha) is used for catch crops

in a functional rural community.3

In addition to raw materials from forests and timber processing industries, domestic wastes and agricultural feedstocks will gain more importance as bioenergy input material in Austria. These raw materials can be used for the production of solid biomass, biogas and biofuels. In 2009 in Austria about 46,500 ha of arable land and grassland were used for the production of biomass, while energy crops on arable land dominated strongly (46,000 ha). This corresponds to 3.4 % of the total arable land in Austria. Until 2020, the cultivation of energy crops as main crop could be extended to 122,000 ha, roughly 80 % on arable land and 20 % on grassland.

3 Statistics Austria: Austria – data, figures, facts, Vienna, 2011; http://www.statistik.at/web_en/pub-lications_services/austria_data_figures_facts/index.html

Table ‚Land Use‘: Percentage of land use1) in Austria 2010

Source: Federal institution of Statistics Austria: Facts & Figures – Annual edition 2011; 1) Land use per usage type according to Kataster of the Federal Office for Metrology and Surveying; 2) Built-up areas, gardens, vineyards and other areas

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cultivation for the biogas production, 1.3 PJ of primary energy could be produced. Through the use of 1 % of grassland (18,500 ha) additional 1.5 PJ of primary energy could be gained in form of biogas. From agricultural residues about 0.4 PJ of primary energy in form of biogas was produced in 2009. This corresponds to the use of 3 % of the total accumulated amount of agricultural residues.Increasing the use of agricultural manure by 35 % would contribute to 4.3 PJ in form of biogas. The biogas production based on agricultural raw materials could thus be increased from 4.7 PJ in 2009 to 15 PJ in 2020. In addition the biogas production could be increased from 1.7 PJ to 1.2 PJ through a more intensive use of organic waste. This category includes organic waste from households, garden and park waste, market waste, kitchen, canteen and food waste, animal waste and dairy waste. Total biogas production could rise from 5.9 PJ (164 million cubic meters of biogas equivalent) in 2009 to 16.7 PJ (464 million cubic meters of biogas equivalent) in 2020, without competing with the food and feed production.4

3.1.5. Business Case

In general, the Austrian feed-in law offers excellent framework conditions by providing investment security with its 15 to 20-years payment period guaranteed for the tariffs, the prioritized grid access and the purchase obligation of the grid operator.4 „Heat, Electricity, Fuels – Bioenergy 2020“; Aust-rian Biomass Association, 2011; http://www.biomas-severband.at/servicedownload/publikationen

The feed-in tariffs for biogas in 2012 (compare Table ‘Feed-In-Tariff’) are the same as in the year before. Appliances up to 250 kW receive 18.5 Cent/kWh, appliances between 250 and 500 kW are paid 16.5 Cent/kWh, and bigger biogas appliances get 13 Cent/kWh. If heat is also used, additional 2 Cent/kWh are paid. The usage of waste reduces the tariffs by 20 %. Appliances up to 250 kW must use a minimum of 30 % manure. An utilisation ratio of at least 60 % is required to get a subsidised tariff. Under these conditions new appliances are only economical when the raw material supply is excellent and the produced heat is used.

3.1.6. Market Environment

By the end of 2009, electricity generation systems based on solid biomass with a capacity of 313.4 MW, biogas plants with a capacity of 77 MW, systems based on liquid biomass with a capacity of 9.6 MW and plants working with landfill- and sewage gas with a capacity of 21.2 MW were established in Austria. These plants generated 2,566 GWh in total. The electricity was fed into the grid and subsidised by the Renewable Energy Act. Additionally, 1,100 GWh of electricity from black liquor and 600 GWh from sewage sludge, carcass meal and other renewable waste were generated without subsidisation. In total, 4,300 GWh electricity were generated from biomass sources.The consumption of bioenergy increased by 30 % from 140 PJ in 2005 to 182 PJ

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of biofuels and a share of 9 % of green electricity from biomass and biogas are assumed.The Figure ‘Development Biomass Heat’ shows that the production of heat from biomass sources increased by about 12 % from 128.5 PJ in 2005 to 143.5 PJ in 2009, while in 2009 about 83 % of the produced heat came from small scale heating and 17 % from district heating. During this period, the district heat from biomass sources nearly doubled from

in 2009 (Figure ‘Development Energy Consumption’). The heating market is the main sales market for biomass with a share of 79 %, followed by the biofuel market with 12.4 % and the green electricity market with a share of 8.6 %. Assuming that the full resource-potential will be exploited, the final consumption of bioenergy could rise about 31 % up to 237 PJ. With estimated 76 % the heating market will still be the primary sector using biomass in 2020. A share of 15 %

Table ‚Feed-In-Tariff‘: Feed-in tariffs for new green electricity facilities in Austria 2012

Source: Energy-Control Austria, January 2012; http://e-control.at/de/market_players/re-newables/feed-in-tariffs

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Figure ‚Development Energy Consumption‘: Development of final energy consumption of biomass in Austria from 2005 to 2009 and forecast potentials for 2020

Source: „Heat, Electricity, Fuels – Bioenergy 2020“; Austrian Biomass Association, 2011; http://www.biomasseverband.at/servicedownload/publikationen

Figure ‚Development Biomass Heat‘: Development of production of heat from biomass in Austria from 2005 to 2009 and forecast potentials for 2020


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level of efficiency. With the fuel amount saved through the replacement of old appliances, further 45,000 households can be heated.Green energy from liquid and solid biomass and biogas increased by 67 % from 9.3 PJ in 2005 to 15.5 PJ in 2009. In this time period green electricity from solid biomass including black liquor rose from 7.9 PJ to 13, while green electricity from biogas increased from 1.1 PJ to 2.3 PJ.When using the total potential, green electricity from solid and fluid biomass and biogas could increase by about 34 % to 20.7 PJ by 2020 (see Figure ‘Development and Forecast Potentials’). Around 55 % of the potential comes from solid biomass and 45 % from biogas. To use the full potential, CHP-appliances operating with solid biomass and biogas, each producing 100 MW in total, need to be build.

12.7 PJ to 24.5 PJ. The heat production from small scale heating increased slightly from 115.8 PJ to 119.1 PJ.The development potential of heat from biomass sources is estimated to increase by 37.3 PJ until 2020 (Table ‘Forecast Potential’) and can hence reach 181 PJ in total. The most important resource for a further expansion is wood with 69 %, followed by biogas with 15 % and other biomass combustibles with 13 %. It is expected, that about 60 % of the development potential lies in small scale heating. The remaining 40 % will be covered by district heating, micro-grids and industrial waste heat from CHP-appliances. To reach this goal, heating appliances with a thermal capacity of about 5,050 MW must be installed. Additional 500,000 households with an estimated heat consumption of 10 kW/ household could be switched from fossil to biomass heating. Moreover old biomass heating appliances need to be replaced. About 140,000 outdated heating appliances based on wood should be replaced to reach a higher

Energy Source PJ %Wood-based 25.6 68.6Black Liqour 1.5 4.0Biogas 5.4 14.5Other Solid Biomass 4.8 12.9Sum 37.3 100.00

Table ‚Forecast Potential‘: Forecast potential for production of heat from biomass in Austria from 2009 to 2020

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Law Austria’ regulates homogeneous subsidies and support schemes for the whole of Austria. The federal law ‘KWK-Gesetz’ (CHP law) governs the nationwide uniform distribution of funding the generation of green electricity in CHP systems. The funding is available for two purposes. Funding for a part of the expenses for the operation of existing and modernized cogeneration installations for public district heating, and funding as a form of investment grants for new CHP plants.For air and noise emissions there are binding thresholds defined within the federal ’Emissionsschutzgesetz für Kesselanlagen – EG-K’ (emission law for boiler plants in Austria).There are numerous regulations in

3.1.7. Regulation

In 2011, it has already been 10 years that the Austrian electricity market has been liberalised. The liberalisation had been a consequence of the Austrian accession to the EU and its first energy package.In Austria there are a variety of rules and laws for CHP-plants operating with biomass. Some of the most important regulations are declared in the following.The federal ‘Green Electricity Law Austria 2012’ (Ökostromgesetz 2012) regulates the financial support through the feed-in tariffs, the grid access, the acknowledgement of plants, the obligations for applicants and plant operators, the investment subsidies etc. Since 2003, the ‘Green Electricity

Figure ‚Development and Forcast Potentials‘: Development of green energy from liquid and solid biomass and biogas in Austria from 2005 to 2009 and forecast potentials for 2020


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• Luftreinhalte-VO für Kesselanlagen (LRV-K)• Feuerungsanlagenverordnung (FAV)• Abfallverbrennungsverordnung (AVV)• Immissionsschutzgesetz-Luft (IG-L) • Emissionshöchstmengengesetzes Luft (EG-L)

3.1.8. Project Financing

According to outcomes from recognized rating agencies, like Standard & Poor s 5 and Moody s6, Austrian markets can be considered as safe from the perspective of country risk. Also the reliability and credit worthiness of the Austrian economy is rated with best scores.In the COFACE country risk rating, Austria positions itself on the 5th place of whole Europe after Luxembourg, Norway, Sweden and Switzerland.7

According to the Corruption Perception Index for the level of transparency Austria took the 16th position of the whole world.8

The IFC (International Finance Corporation) ranks Economies on their ease of doing business. Austria achieved the 32nd place of 183 reviewed countries in the ‘Ease of Doing Business’-ranking, and can therefore be considered to be

5 Standard & Poor´s, http://www.standardand-poors.com/home/en/eu6 Moodys´s, http://www.moodys.com/7 http://www.coface.com/CofacePortal/COM_en_EN/pages/home/risks_home/count-ry_risks/rating_table?geoarea-country=COUN_AREA_04&crating=&brating8 Corruption perceptions index 2011, http://cpi.transparency.org/cpi2011/results/#CountryResults

Austria that affect the operation of heating systems based on biomass. The most important ones are listed below.Both norms ‘Emissionsschutzgesetz für Kesselanlagen – EG-K’ and ‘Luftreinhalte-VO für Kesselanlagen (LRV-K)’ are regulating the approval, the operation, the air emissions and the monitoring of steam and gas generators. The ‘Feuerungsanlagenverordnung (FAV)’ applys to subjects to approval and already approved appliances with a capacity of more than 50 kW.The ‘Abfallverbrennungsverordnung (AVV)’ regulates combustion techniques, emission limits and operation conditions.The ‘Immissionsschutzgesetz-Luft (IG-L)’ comprises limits and targets for several pollutants.The target of the ‘Emissionshöchstmengengesetzes Luft (EG-L)’ is the regulation of air pollutants (NOx, SO2, NMVOC und NH3) through the determination of national emission limits.Regulations and useful links: • Green electricity law Austria 2012 (Ökostromgesetz 2012) • E-Control Austria• OeMAG – Abwicklungsstelle für Öko-strom AG (processing and administrati-on centre for green electricity in Ausria)• CHP-law Austria (KWK-Gesetz Austria)• Emissionsschutzgesetz für Kesselan-lagen - EG-K (emission law for boiler plants)

http://www.ris.bka.gv.at/GeltendeFassung.wxe?Abfrage=Bundesnormen&Gesetzesnummer=10010568







http://www.e-control.at/de/marktteilnehmer/news/aktuelle-meldungen/oekostromgesetz-2012

http://www.e-control.at/de/marktteilnehmer/news/aktuelle-meldungen/oekostromgesetz-2012

http://www.e-control.at/en/home_en

http://www.oem-ag.at/Law/







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3.1.9. Readiness for Uptake

The expectancy and readiness for uptake in Austria seems to be good. However, new projects need to be planned and implemented in a considerate and well adapted way under the participation of local inhabitants and stakeholders.Renewable energy sources have a special status in Austria. In recent years big efforts were made to promote green energy. As a result, 30.8 % of the Austrian energy consumption came from renewable sources in 2010. The measures are diverse, there are, on the one hand initiatives sensitizing the public to energy issues (e. g. ‘klima:aktiv’), and on the other hand, several subsidies as well as suitable framework conditions to promote renewable energies were created.12 The total turnover of investments in renewable energy technologies reached 5.229 billion Euro in 2010, whichwas a 5.1 % increase to the previous year. The production and service of renewable energy appliances, offered employment for 37.649 people in 2010 – 5,1 % more than in 2009. The importance of renewable energies for the national economy is, however far bigger than just the turnover and employment effects. The ability to generate energy from domestic sources reduces the need of

12 Source: Erneuerbare Energie in Zahlen – Die Entwicklung erneuerbarer Energie in Österreich im Jahr 2010; Bundesministerium für Land- und Forst-wirtschaft, Umwelt und Wasserwirtschaft, Abteilung Umweltökonomie und Energie; http://www.lebens-ministerium.at/umwelt/energie-erneuerbar/ERneu-erbare_Zahlen.html

quite well, although the rank of ’Starting a Business’ is relatively low in consequence of the very high administrative and regulative requirements.9

As Austria is member of the Eurozone, currency exchange risk for investors coming from other member countries of the Eurozone, is low. The average inflation rate is with 1.8 % for the period 2005 to 2010 one of the lowest within Europe, the European average for the same period is 2.3%.10

The easiness of getting a credit by banks is very much dependent on individual project designs as the bank will assess reliability of the chosen technology, feedstock supply security and price risks. The development of appropriate measures or strategies for the use of bioenergy is very specific. The optimal solution for the specific situation must consider ecological and economical aspects as well as social aspects.A specific project financing institution in Austria is RENERGIE. It offers support in financing and operation of energy generation facilities using renewable sources, develops projects for renewable power and heat and realizes the appropriate production plants. The projects are implemented by equity investments in selected European markets.11

9 IFC World Bank Group – International Finance Corporation World Bank Group, http://www.doing-business.org/rankings10 Wirtschaftskammern Österreich, http://wko.at/statistik/eu/europa-inflationsraten.pdf11 RENERGIE: Raiffeisen Managementgesellschaft für erneuerbare Energie GmbH, http://www.rener-gie.at/en

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fossil fuel imports. Hence the national economy will be less prone to crisis. In a longer term the economy will gain sustainability.13

13 Source: Erneuerbare Energie in Zahlen – Die Ent-wicklung erneuerbarer Energie in Österreich im Jahr 2010; Bundesministerium für Land- und Forstwirt-schaft, Umwelt und Wasserwirtschaft, Abteilung

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3.2. GerMany

German Bioenergy Association (BBE)

Thomas Siegmund

Godesberger Allee 142-148

D-53175 Bonn

Tel.: +49-228 81 002-22



Country Score Bavaria - Biogas (November 2011)

In the general scoring for sector, Germany - Bavaria is rated place 19 out of total 81. The underlying categories that influence this re-sult are displayed in the bar chart.

Country Score Bavaria - Biomethane (November 2011)

In the general scoring for sector, Germany - Bavaria is rated place 22 out of total 81. The underlying categories that influence this re-sult are displayed in the bar chart.

mailto:[email protected]

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km² on average is considered to be attractive, providing sufficient sales potential even on regional scale, although the population density in eastern and northern parts of Germany is lower compared to western and southern regions.Useful links:Facts and Figures:• Federal Statistical Office• GTAI - Germany Trade & Invest• German Farmers Union• German Association of Energy and Water Industries• Reegle


The German government aims at reaching a share of renewable energy sources of 20% in the final energy consumption, and of 35% in the electricity sector by 2020. The RES-share in Germany’s final energy consumption is supposed to rise to up to 80% in 2050. Due to its characteristics as a storable feedstock and a flexible energy supply, bioenergy will play a key role in this strategy. Amongst the different bioenergy technologies, the amount of electricity produced by biogas plants (including sewage and landfill gas) is planned to be raised from 13.9 TWh in 2010 to 23.4 TWh in 2020, requiring an increase of installed capacity from 2.5 GW to 3.8 GW in the same period.2


3.2.2. Basic Data

Germany, officially the Federal Republic of Germany, is a federal parliamentary republic in Europe, consisting of sixteen federal states (see Graph ‘Map Germany’). The capital and largest city is Berlin. Germany covers an area of 357,104 km² and is therewith one of the largest countries in Europe, located in a temperate climate zone with an average of -0.5 degree Celsius in January and 17 degree Celsius in July in average.1

Purchasing power to allow higher prices for green electricity can generally be seen as positive. While the GDP real growth rate stagnated slightly with -0.1% between 2008 and 2010, GDP in 2010 was still € 118 per capita, which makes Germany one of the strongest economies in Europe with solvent inhabitants . The population density of 229 inhabitants/

1 Federal Statistical Office, www.destatis.de

Graph ‚Map Germany‘: Federal States of Germany

http://www.destatis.de

http://www.gtai.de/GTAI/Navigation/EN/Invest/Business-location-germany/general-overview.html

http://www.situationsbericht.de

http://www.bdew.de

http://www.bdew.de

http://www.reegle.info

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EEG. The amendment of the EEG in 2011 introduced additional options to invest into biogas storage facilities and to integrate biogas into the energy market.With rising success of the biogas sector in the electricity market, different concepts and strategies were introduced, ranging from small scale biogas on-site production plants fed with agricultural residues from the farm, to large scale, industrial biogas and biomethane plants utilizing energy crops from larger catchment areas. At policy-making-level, this led to different viewpoints concerning which strategy was best to follow. Eventually, this resulted in constant public discussions on changing tariffs and regulations – and therewith to rising uncertainty and decreasing confidence in the stability of policy frameworks on the investor-side.In the heat market biogas does not play a role so far, although some utilities and energy traders started to provide special tariffs for natural gas with a low blend of biomethane (5-10%). Biogas for heat is not directly supported, but is eligible to be used for fulfilment of the renewable heat obligation for new houses. However, the renewable heat obligation law does not have a measurable impact on the market so far.4

Until today, biomethane is also not very common in the transport sector. Biomethane can be used to fulfil the biofuel quota obligation5 of the mineral oil 4 Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, http://www.erneu-erbare-energien.de/erneuerbare_energien/gesetze/eeg/doc/47585.php5 Biofuels Quota Act, http://www.gesetze-im-inter-net.de/bimschg/index.html

In addition to the proposed targets and measures for biogas electricity, the German government also aims at feeding 6 billion Nm³ biomethane into the natural gas grid in 2020, which requires investments into 1,200 to 1,800 biomethane upgrading plants with an average capacity of 4 to 6 MWh. This corresponds to an annual increase of 120 – 150 plants.3

The political will to develop the biogas sector can be seen as quite favourable, as the benefits of biogas are recognized and biogas is seen as a key technology to increase the market share of RES in general. Biogas can provide both base load and peak load electricity, which makes it a valuable option to balance fluctuating RES energies, like wind power and PV. The proposed measures to reach these targets, both, theoretically described in the nREAP but also practically experienced, are considered to range from very good to sufficient, however, there is still room for improvements. With the feed-in law in Germany the government introduced an excellent support scheme with fixed feed-in tariffs for different feedstocks and capacities, long-term payment periods and guaranteed grid access and regulated grid connection rules. The feed-in law is amended on a regular basis, to adjust the tariffs to actual market developments and needs. Since 2009, also incentives for biomethane upgrading, if used for electricity generation, are set within the

3 Dena – Biogaspartner, http://www.biogaspartner.de/index.php?id=10105&L=1\\%27

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3.2.4. Feedstock

The infrastructure for both, producing and disseminating and utilizing biogas is excellent. In Germany a dense road and rail network exists, allowing efficient feedstock deliveries to the biogas plants during the whole year. A sophisticated and well-established separation and collecting system for bio-waste enables the development of a huge bio-waste potential. At ‘the other end of the pipe’ with approximately 1.7 million km length (66% low voltage, 28% medium voltage and 6% high voltage lines), a dense and country-wide electricity grid is available for electricity feed-in, though in some remote areas with a high density of RES electricity facilities, capacities for additional electricity feed-in can be limited. The German government therefore, aims at extending grid capacity in the short-term. Also a natural gas grid for biomethane feed-in is available with a total length of more than 443,000 km (thereof 27% low pressure, 41% medium pressure and 32% high pressure pipelines).7

2.3% of Germany’s surface is used for agriculture offering a great theoretical potential for agricultural feedstock supply for the biogas sector. Considering a total population of 81 million inhabitants, Germany has 2,300 m² available farm land (including grassland), resp. 1,460 m² arable farm land (without grassland) per capita.8 In addition, with approximately

7 German Association of Energy and Water Indus-tries, http://www.bdew.de/internet.nsf/id/DE_Ener-giedaten8 German Farmers Union, www.situationsbericht.de

industry, but it cannot yet compete with B100 and bioethanol fuels, even though it remains exempted from the energy tax until 2015. If used as transport fuel, biomethane, further on, has to meet the sustainability requirements of the biofuels sustainability ordinance ‘BioKraft-NachV’.6

Useful Links: Institutions:• RES Strategy, EEG and EEWärmeG => Federal Ministry for the Environment, Nature Conservation and Nuclear Safety• Biofuels Strategy => Federal Ministry of Food, Agriculture and Consumer Pro-tection• Biofuels Sustainability Ordinance => Federal Office for Agriculture and Food• Bioenergy F&E and Marketing => Fe-deral Agency for Renewable Ressources Associations:• BBE - German Bioenergy Association• FvB - German Biogas Association• Biogas Council

6 Biofuels Sustainability Ordinance, http://www.gesetze-im-internet.de/biokraft-nachv/index.html

http://www.bmu.de

http://www.bmu.de

http://www.bmelv.de

http://www.bmelv.de

http://www.bmelv.de

http://www.ble.de

http://www.fnr.de

http://www.fnr.de

http://www.bioenergie.de

http://www.biogas.org

http://www.biogasrat.de

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share of farms, which have at least 150 cattle in stables (hence, providing sufficient manure to operate a small biogas plant of 30 kW capacity), can be found in Lower Saxony (> 3,500 farms), Schleswig-Holstein (>2,000 farms), North Rhine-Westphalia (>1,500 farms) and Bavaria (>1,100 farms), while the lowest potential – neglecting the cities of Berlin, Hamburg and Bremen – can be found in Rhineland-Palatinate, Saarland, Saxony and Saxony-Anhalt. Considering the theoretical biogas yields of all livestock (cattle, pigs and poultry), the highest potentials lie in the same regions of Lower Saxony (88 million m³ theoretical biogas yields), Bavaria (83 million m³), North Rhine-Westphalia (57 million m³) and Schleswig-Holstein (30 million m³), accordingly. Normalized by land area, the order only changes slightly, starting with Schleswig-Holstein (1,900 m³/km²), Lower Saxony (1,800 m³/km²), North Rhine-Westphalia (1,600 m³/km²) and Bavaria (1,100 m³/km²).11

However, it must not be forgotten that biogas plants do not need to be operated with manure only, but as most common, by a feedstock mix. Since 2004, the use of energy crops was incited by the EEG as well, which led to a mass share of 45% in 2010, almost equal to the manure share. However, due to the much higher energy content of energy crops in relation to manure, it makes up almost 80% of the total biogas production. In general, 11 Federal Statistical Office, http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/DE/Content/Statistiken/LandForstwirtschaft/Landwirt-schaftszaehlung2010/Ergebnisse,templateId=renderPrint.psml#3

40 million private households9 and a strong biomass processing industry, energy crops and bio-wastes in Germany offer a considerable potential for biogas and biomethane production. Therefore, the feedstock potential from manure, energy crops and bio-wastes for biogas in Germany is high. The dominating energy carriers for biogas, however, are manure and energy crops. In 2010, manure was with 46% the most utilized feedstock input in terms of mass, but only delivered 11% of the total energy output from biogas, due to the low energy content of manure.10 In Germany, the share of manure in the digester is higher, the smaller the biogas plant is: in biogas plants with an installed electric capacity of <70 kW the share of manure was 70% in 2010, while in biogas plants >500 kW installed electric capacity it was less than 30%, according to the EEG monitoring report 2011 of DBFZ.Still, manure is an attractive energy carrier. The EEG 2012 focuses on the utilization of manure in biogas plants and provides attractive feed-in tariffs especially for manure inciting small, farm-sited biogas plants. In view of the agricultural structure, the manure potential is unequally distributed, as there are areas with a high share of livestock farming and areas with more crop cultivating farms. The highest

9 Bundeszentrale für politische Bildung, http://www.bpb.de/wissen/GLSOS3,0,0,Bev%F6lkerung_und_Haushalte.html10 DBFZ, http://www.dbfz.de/web/fileadmin/user_upload/Userupload_Neu/Stromerzeugung_aus_Bio-masse_Zwischenbericht_Maerz_2011.pdf

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Regions with the largest area of farm land (grassland and arable land) in total, are Bavaria (3.5 million ha), Lower Saxony (2.9 million ha), North Rhine-Westphalia (1.7 million ha), Brandenburg (1.5 million ha) and Mecklenburg-Western Pomerania (1.5 million ha).Based on improved production efficiency, advanced growing and processing technologies and developments in plant breeding, crop yields were raised by 1 to 1.5% each year. If this development continues in the future, approximately 150,000 to 200,000 ha of farm land could be used additionally per year, without restricting food production.15 By doing so, the available farm land for energy crop production could be doubled from 2 million ha to approximately 4 million ha without affecting food supply.16

The most common energy crop in 2010 was corn with 76% mass share of all used energy crops, followed by grass silage (11%), wheat (whole plant, 7%) and wheat grain (4%). Sugar beet plays with only 1% a minor role so far, but is seen to be an upcoming and promising energy carrier in the future.17 Same is true for cup-plant (Lat.: Silphium Perfoliatum), which is so far grown on 200 ha for research only, but is promising mass and biogas yields comparable to those of corn.

15 Situationsbericht 2011/12 – Trends und Fakten zur Landwirtschaft, www.situationsbericht.de16 German Bioenergy Association, www.bioenergie.de17 DBFZ, http://www.dbfz.de/web/fileadmin/user_upload/Userupload_Neu/Stromerzeugung_aus_Bio-masse_Zwischenbericht_Maerz_2011.pdf

there was a steady increase of energy crop cultivation on farm land, over the past years. After a small decline in 2008, cultivation areas for renewable resources increased significantly to 2.28 million ha, this reflected 19% of Germany’s total arable farm land in 2011. Beneath a small share for industrial use, 1.96 million ha were used for energy crops. Figures concerning the land area used for energy crop cultivation to produce biogas vary between 0.8 million ha12 and 1.1 million ha.13

Overlooking the agricultural structure in Germany, in most regions (federal states) the available farm land exceeds the theoretically needed area of 0.2 ha per inhabitant to produce sufficient food, which indicates a theoretical potential for non-food crop production. Except for forest-rich regions of Hesse, Saarland and North Rhine-Westphalia and the cities of Berlin, Hamburg and Bremen where there is less than 0.2 ha/inhabitant available, the available farm land per inhabitant ranges from 0.21 ha/inhabitant in Rhineland-Palatinate to 0.84 ha/inhabitant in Mecklenburg-Western Pomerania. This view of course considers neither the kind of crops grown in a region, nor any trade activities on regional, national and global scale and should hence only be used as a rather theoretical indicator.14

12 FNR, http://mediathek.fnr.de/grafiken/daten-und-fakten/anbauflache-fur-nachwachsende-rohstof-fe-2011-4.html13 DBFZ, http://www.dbfz.de/web/fileadmin/user_upload/Userupload_Neu/Stromerzeugung_aus_Bio-masse_Zwischenbericht_Maerz_2011.pdf14 Federal Statistical Office, www.destatis.de

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2006 with 99.9 points).20

Also fossil fuels, of which a significant share needs to be imported, experienced a jump in prices, especially since 2003. Compared to the reference year 1991 (index = 100) the price index for imported crude oil rose to 376 points in 2008 which reflects an increase by 276% in this period. Between January 2009 and April 2010 prices rose by 90%, which is a strong increase for this short period of time. The price development of coal is comparable to this, showing an increase from 100 points in 1991 to 248 points in 2008, with fewer fluctuations however. The main driver was an increased coal demand in the BRIC countries and the US. The higher fuel procurement costs are reflected in increased electricity prices for households, too, which rose from € 40.67 per month for a German reference household (3.500 kWh/year) in 2000 to € 67.7 per month in 2009. The highest share of the increase in electricity prices comes from generation, transportation and sales with 61%. Increased costs of RES stemming from the EEG-feed-in-tariffs, which are allocated to all electricity consumers, only contribute 11% to this increase.21

Although prices for fossil based energy grew significantly within the last decade, biogas and biomethane in Germany stillrequire support-systems to be

20 AMI, http://www.ami-informiert.de/ami-maerkte/ami-weitere-maerkte/ami-maerkte-agrarwirtschaft/meldungen/meldungen-single-ansicht/article/ami-rohstoff-index-bleibt-fest-gestimmt-1.html21 Federal Environment Agency, http://www.um-weltbundesamt-daten-zur-umwelt.de/umweltdaten/public/theme.do?nodeIdent=3605

Bio-wastes (7% mass share and 7% of the biogas yields) and residues from industry and agriculture (2% in both mass share and biogas yields) play a minor role in the German biogas market so far.18 Total available potential is stated to be 12.2 million tons /year.19

Useful Links: Facts and Figures:• Federal Statistical Office• German Farmers Union • Federal Agency for renewable resour-ces • German Biomass Research Centre• EUROSTATAssociations:• FvB - German Biogas Association• Biogas Union


Although prices for fossil energy carriers in the heat, transportation and electricity market rose steadily within the last decade, break-even of bioenergy is not yet reached, because production costs of bioenergy increased as well due to rising feedstock prices. The AMI price index for the 13 most relevant agricultural feedstock produced in Germany ranges on a high level and increased steadily from 98 points in October 2009 to 138 points in October 2011 (reference year is

18 DBFZ, http://www.dbfz.de/web/fileadmin/user_upload/Userupload_Neu/Stromerzeugung_aus_Bio-masse_Zwischenbericht_Maerz_2011.pdf19 EUROSTAT, http://ec.europa.eu

http://www.destatis.de


http://www.fnr.de

http://www.fnr.de

http://www.dbfz.de

http://ec.europa.eu


http://www.biogasunion.de

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bioenergy and biogas plants in spite of this, German government introduced the EEG in 2000, which guarantees a fixed tariff for produced electricity fed into the electricity grid. It was amended three times already to adjust tariffs and regulations to market developments. The tariffs are differentiated by technology, capacity and feedstock used and will be paid for a 20-year period. From 2013 on, tariffs for new biogas plants will be lowered by 2% every year, to incite technology and efficiency improvement. Since 2012, plants up to 150 kWel capacity are eligible to receive a tariff of 14.3 ct/kWh, of 12.3 ct/kWh for a capacity of up to 500 kWel, of 11 ct/kWh for a capacity of up to 5 MWel and of 6 ct/kWh for a capacity of up to 20 MWel. In addition to this basic remuneration, a feedstock bonus is granted ranging between 4 and 8 ct/kWh. Eligible feedstocks for this bonus are categorized into two classes and again differentiated by capacity. A list of eligible feedstock for each class can be received at the German Biogas Association.25 For feedstocks of class II, the bonus is 8 ct/kWh for all installed capacities up to 5 MWel. For feedstocks of class I the bonus is 6 ct/kWh for a capacity of up to 500 kWel, 5 ct/kWh for up to 750 kWel capacity and 4 ct/kWh for a capacity up to 5 MWel.26

25 FvB, German Biogas Association, http://www.biogas.org/edcom/webfvb.nsf/id/DE_Einsatzstoffe_nach_Biomasseverordnung/$file/11-12-20_Einsatz-stoffe_final.pdf26 Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, http://www.erneu-erbare-energien.de/erneuerbare_energien/gesetze/eeg/doc/47585.php

competitive with natural gas, coal, fossil oil and nuclear energy – depending on the market, biogas is used in. In view of energy crops, there is a close correlation between energy- and agricultural prices, or between purchasing power of the food sector and the demand of the bioenergy industry, which is dependent on crude oil prices. With high crude oil prices, the utilization of wheat, oil seeds or sugar plants can be cheaper than fossil fuels in terms of oil equivalents. This is why high energy prices trigger prices for agricultural products and therefore lead to increased biomass fuel procurement costs for bioenergy plants.22

Prices for biogas electricity vary significantly due to different plant sizes, feedstock used, and technologies applied. In general, the feed-in tariffs of the EEG reflect total production costs, from which spot market prices for conventional electricity must be subtracted to calculate the extra costs of biogas-electricity. Feed-in tariffs for biogas ranged between 6 ct/kWh to 25 ct/kWh in 2012. Average extra costs of all bio-based electricity (solid biomass + biogas) in 2011 was 12.79 ct/kWh according to BDEW23 while the spot market price for electricity ranged between 5 and 5.5 ct/kWh.24

To enable a profitable operation of

22 DBV, German Farmers Union, www.situationsbe-richt.de23 BDEW,German Association of Energy and Water Industries, http://bdew.de/internet.nsf/id/3564E959A01B9E66C125796B003CFCCE/$file/BDEW%20Energie-Info_EE%20und%20das%20EEG%20%282011%29_23012012.pdf24 EEX, www.eex.com

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option. With the market premium model, the biogas plant operator receives a payment equal to the feed-in tariff he would have received instead, deducted by the spot market price and added by a management premium (0.3 cent/kWh in 2012, reduced to 0.225 cent/kWh in 2015).Another new support design within EEG 2012 is the introduction of a flexibility premium, which shall incite the operation of a biogas plant in accordance to daily electricity demand. It means, that a biogas plant operator receives €130 per year for each kW capacity that is installed in addition to the existing plant for a 10 year period. For instance, if the capacity was 500 kWel before and the operator adds another 250 kWel, he would get (250 kW x €130) x 10 years = €325,000. Instead of running a 500 kW biogas plant at full capacity 24/7, regardless of real electricity demand, the operator can now run his plant with e.g. 50% at times of low power demand (e.g. 250 kWel) and 100% in times of peak demand (750 kWel). Of course this also requires storage facilities for the produced biogas. In sum, the average electricity generation per month must not be higher than the permitted basic output (of 500 kWel). This flexibility premium only applies to biogas plants which are supported by the market premium model.Besides the operational support for biogas plants, there are additional investment subsidies available in form of grants and long-term, low-interest loans. Conditions and requirements

A special support is granted to small-scale biogas plants <75 kWel fed with manure. Since 2012, they will receive a feed-in tariff of 25 ct/kWh if they utilize at least 80% manure. Biogas plants up to 500 kWel using bio-wastes only receive a tariff of 16 ct/kWh. For capacities up to 20 MWel, it is still 14 ct/kWh. For the upgrading of biogas to biomethane, another bonus of 3 ct/kWh applies for plants which produce 700 Nm³/h, of 2 ct/kWh for plants with a capacity of 1,000 Nm³/h and 1 ct/kWh for biogas plants which upgrade up to 1,400 Nm³ biomethane per hour.The eligibility of receiving the tariffs is linked to several requirements, amongst those, a cap of 60% for corn used as input material and the need to operate at least 60% in CHP mode. If this is not met, the plant operator does not receive any feed-in tariff for the generated electricity and it has to be sold at the spot market instead. In this case, it is however still supported by the newly introduced ’market premium model’ within EEG 2012. Same is true for biogas plants >750 kWel from 2014 on, which do not get any fixed tariff, but have to apply the market premium model.With the introduction of the market premium model within EEG 2012, biogas electricity shall be introduced to the energy market. Once a month, a biogas operator can choose whether he wants to receive the fixed feed-in tariff according to his biogas plant design, or whether he wants to sell it at the spot market within the market premium

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With 5,900 biogas plants in operation and 2,300 MW installed electric capacity in 2010, Germany is the most developed biogas market in the world. The German Biogas Association estimates that by end of 2012 up to 7,400 biogas plants will provide a capacity of 2,900 MW (see Figure ‘Market Development’).27 Compared to the market conditions in 2006, the number of biogas plants for CHP as well as the total electric capacity installed doubled by 2010. There are, however, periods of low investment activity at times when the feed-in systems is being amended.The average electric capacity of all installed biogas plants in 2010 was 380 kW, although those plants newly built in 2010 ranged at 300 kW in average, which indicates the trend to small and medium sized systems (see Figure ‘Installed Capacity’).28 This is due to the incentives of the amended EEG in 2009, which aimed at fostering the market development of plants <500 kW. Since 2009, market development shifted to capacities below 500 kW, while in 2008 still more than 60% of the build systems ranged above 500 kW. Also today, large scale biogas plants >500 kW capacity are still being implemented of course.

27 German Biogas Association, http://www.biogas.org/edcom/webfvb.nsf/id/DE_Branchenzahlen/$file/11-11-15_Biogas%20Bran-chenzahlen%202011.pdf28 DBFZ, http://www.dbfz.de/web/fileadmin/user_upload/Userupload_Neu/Stromerzeugung_aus_Bio-masse_Zwischenbericht_Maerz_2011.pdf

differ from federal state to federal state and have to be asked for at local banks or authorities. The KfW-bank provides beneficial financing conditions as well. Useful links:Facts and figures:• AMI - Agricultural Market Information Company• Federal Ministry of Economics and Technology• Federal Environment Agency• German Farmers Union• Association of German Energy and Water Industries• Leipzig Energy Exchange EEXSupport schemes:• Federal Ministry for the Environment, Nature Conservation and Nuclear Safety • KfW-Bank• Federal Ministry of Economics and Technology• BINE• Federal Agency for Renewable Resour-ces Associations:• BBE - German Bioenergy Association• FvB - German Biogas Association

http://www.ami-informiert.de

http://www.ami-informiert.de

http://www.bmwi.de

http://www.bmwi.de

http://www.umweltbundesamt.de


http://www.bdew.de

http://www.bdew.de

http://www.eex.com

http://www.erneuerbare-energien.de/erneuerbare_energien/gesetze/eeg/doc/47585.php

http://www.erneuerbare-energien.de/erneuerbare_energien/gesetze/eeg/doc/47585.php

http://www.kfw.de

http://www.foerderdatenbank.de

http://www.foerderdatenbank.de

http://www.energiefoerderung.info

http://www.nachwachsenderohstoffe.de/projekte-foerderung/foerderuebersicht/

http://www.nachwachsenderohstoffe.de/projekte-foerderung/foerderuebersicht/



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Graph ‚Market Development‘: Market development of biogas plants in Germany

Source: FvB German Biogas Asssociation 2011

The same order applies for the installed capacity per available farm land, which is approximately 200 kW/1,000 ha for Lower Saxony, 160 kW/1,000 ha for Bavaria and 140 kW/1,000 ha for Schleswig-Holstein. German total average is at approx. 120 kW/1,000 ha.The Figures illustrate the high concentration of biogas plants in Lower Saxony and the southern regions of Germany. With regards to plant size, there are predominantly small and medium sized biogas plants installed in the southern regions (<325 kW on average), while in the northern and

Overlooking the regional allocation, the federal states of Bavaria (2,030) Lower Saxony (1,073) and Baden-Wuerttemberg (709) provided the highest number of biogas plants in 2010, while the strongest growth in terms of new installations was seen in Bavaria (339 in 2010), Lower Saxony (200) and Schleswig-Holstein (105) (see Figure ‘Map Biogas Plants’). In view of installed electric capacity, Lower Saxony leads the market development with 550 MW (522 kW on average), followed by Bavaria with 548 MW (270 kW on average) and Schleswig-Holstein with 152 MW (400 kW on average).

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65% of the biogas plants (considered in a monitoring report of the German Biomass Research Centre DBFZ), while 24% use pilot injection engines. 10% are reported to make use of a combination of both. Generally it can be said, that gas engines are used in medium to large sized biogas plants (>250 kW electric capacity), while pilot injection engines are most common in facilities below 500 kW electric capacity.Concerning electricity generation, in 2010 the 5,900 biogas plants produced

eastern parts of Germany (Lower Saxony, Schleswig-Holstein, Mecklen-burg-Western Pomerania Brandenburg and Saxony-Anhalt) medium to large scale installations prevail. This is mainly due to the different agricultural structure with rather small and medium sized farms in the south and medium to large sized farms in the east and north of Germany.Usually the biogas is used in combustion engines in CHP plants, with gas engines prevailing in approximately

Graph ‚Installed Capacity‘: Installed electric capacity per 1,000 ha farm land

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approx. 5.8 to 6.7 TWh heat were provided to external users by biogas CHP plants, which makes up 29 – 34% of the national target for biogas heat in 2020 (19.7 TWh or 1,692 ktoe).29

Among the 2,300 installed biogas plants in 2010, about 48 biomethane upgrading plants were registered with a total capacity of 338 MW of which 17 started


approximately 15.6 TWh electricity, which corresponds to 2.5% of the electricity demand in Germany. For 2011 the increase is expected be around 2.5 TWh to 18 TWh in total (3.1% of electricity demand in Germany). Compared to the national target of providing 23.4 TWh electricity from biogas in 2020, 67% of this target were already met in 2010. In addition, according to the real power generation of 15.6 TWh in 2010 it is assumed that, under consideration of conversion and heat use efficiencies,

Graph ‚Map Biogas Plants‘: Allocation of biogas plants in Germany

Source: DBFZ 2011

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demand of 540,000 natural gas vehicles with a range of 20,000 km each.30 Compared to the voluntary target of the German government to feed 60 billion KWh biomethane into the grid in 2020, only 12.5% would be reached in 2013.To reach the 2020-target, approx. 1,200 to 1,800 new biomethane plants with a total investment volume of €10–12 billion will be needed. The vast majority of the biomethane upgrading facilities was planned and built as such, only a handful CHP-plants have been retrofitted so far. The dena, however, expects that the conversion of CHP plants to biomethane upgrading and feed-in facilities will become more and more important. Until today, only three biomethane plants are directly producing for the transport sector, while the others mainly use their product for the combined production of heat and electricity. A part of the produced biomethane is also sold at the market as natural gas substitute to be blended with natural gas to be sold at natural gas pumps in the transport sector.The business development of the biogas industry shows a strong growth in recent years. While total turnover in 2006 summed up to €1 billion31, it grew to €5.1 billion in 2010 and is expected to having reached €6.1 billion in 2011.32 The 30 Dena, http://www.biogaspartner.de/index.php?id=13256&L=1%27%60%28[{^~31 AEE, http://www.unendlich-viel-energie.de/up-loads/media/20_Renews_Spezial_daten_fakten_bio-gas_nov09_online.pdf32 German Biogas Association, http://www.biogas.org/edcom/webfvb.nsf/id/DE_Branchenzahlen/$file/11-11-15_Biogas%20Bran-chenzahlen%202011_eng.pdf

operation in 2010 according to DBFZ. In 2010, most biomethane upgrading facilities were situated in Lower Saxony (10 plants with a total capacity of 4,255 Nm³/h and an average capacity of 426 Nm³/h), Baden-Wuerttemberg (8 plants, 3,040 Nm³/h total capacity, 380 Nm³/h average capacity), Bavaria (7 plants, 4,755 Nm³/h total capacity, 679 Nm³/h average capacity) and North-Rhine Westphalia (7 plants, 3,240 Nm³/h total capacity, 459 Nm³/h average capacity), while the highest capacities can be found in the eastern parts of Germany in Mecklenburg-Western Pomerania (1 plant, 5,200 Nm³/h total capacity, 5,200 Nm³/h average capacity), Brandenburg (4 plants, 4,870 Nm³/h total capacity, 1,280 Nm³/h average capacity) and Saxony-Anhalt (5 plants, 6,755 Nm³/h total capacity, 1,355 Nm³/h average capacity). According to the German Energy Agency (dena), another 29 biomethane upgrading plants started operation until January 2012, summing up to 77 installations in total. It is expected, that until the end of 2012 approximately 133 biomethane upgrading systems will feed 86,000 Nm³ biomethane per hour into the grid. In view of planned projects, the amount of biomethane plants in operation could be increased to 147 in total, then feeding-in 94,000 Nm³ biomethane per hour. Projected to the whole year this would make 7.5 billion kWh biomethane per year, which equals the heat demand of 375,000 four-persons-households with an average demand on natural gas of 20,000 kWh, or to satisfy the fuel

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Useful links:Facts and Figures:• German Biogas Association FvB• DBFZ - German BiomassResearch Centre• dena - German Energy Agency Market reports:• DBFZ: Stromerzeugung aus Biomasse, Zwischenbericht März 2011 • BMU: Renewable energy in figures 2011 • BBE, Der Bioenergiemarkt in Zahlen 2011List of projects and companies:• German Energy Agency, list and goog-le map of biomethane projects in Ger-many and Europe • German Biogas Association, compre-hensive and value-chain-differentiated list of biogas and biomethane technolo-gy providers• German Energy Agency, value-chain-differentiated list of biomethane techno-logy providers and project developersAssociations:• German Biogas Association FvB• BBE - German Bioenergy Association• Biogas Council• Biogas Union• EBA European Biogas Association• AEBIOM - European Biomass Associa-tion

German Biogas Association states that in 2010 there were 39,100 jobs created in the biogas sector, to be increased to 46,000 jobs in 2011. Several universities and training and qualification facilities already provide dedicated study paths for different job profiles in the biogas sector to satisfy the rising demand for skilled staff. In addition, biogas companies have started to train future employees ‘on the job’.According to the rapid market develop-ment and strong business environment, there is a recognizable competition amongst turn-key providers of bio-gas plants and related equipment suppliers, though there are different specializations recognizable in terms of plant size, technology or feedstock used. The database of the German Biogas Association at www.biogas.org lists about 257 technology providers (turn-key and equipments for different parts of a biogas system) and 171 companies doing business in services, investments and consultancy. 33 companies are specialized in energy crop growing. After developing German markets, a growing number of biogas companies have started or increased their international business activities by exporting or founding international subsidiaries. The export rate in 2010 was 10%, but is expected to have grown to 25% in 2011, which also reflects the high demand on international markets for mature and proven biogas technology.


http://www.dbfz.de

http://www.dbfz.de

http://www.biogaspartner.de

http://www.dbfz.de/web/fileadmin/user_upload/Userupload_Neu/Stromerzeugung_aus_Biomasse_Zwischenbericht_Maerz_2011.pdf

http://www.dbfz.de/web/fileadmin/user_upload/Userupload_Neu/Stromerzeugung_aus_Biomasse_Zwischenbericht_Maerz_2011.pdf

http://erneuerbare-energien.de/english/renewable_energy/data_service/renewable_energy_in_figures/doc/48506.php

http://erneuerbare-energien.de/english/renewable_energy/data_service/renewable_energy_in_figures/doc/48506.php

http://www.bioenergie.de/index.php?option=com_content&view=article&id=290&Itemid=6

http://www.bioenergie.de/index.php?option=com_content&view=article&id=290&Itemid=6

http://www.biogaspartner.de/index.php?id=10063&L=1&fs=%20%2Findex.php%3Foptio...%2F%3Foption%3Dcom_sectionex%2F%3Foption%3Dcom_sectionex%2F%2F%2F%2F%2Findex.php%3Foption%3Dcom_sectionex%2F%3Foption%3Dcom_sectionex%2Findex.php%3Foption%3Dcom_sectionex%2Findex.php%3Foption%3Dcom_sectionex%2F%2Findex2.php%3Foption%3Dcom_sectionex%2F%2Findex2.php%3Foption%3Dcom_sectionex



http://www.biogas.org/edcom/webfvb.nsf/id/DE_Planer_Hersteller_sortiert_nach_Firma




http://www.biogaspartner.de/index.php?id=11799&L=0&fs=0\\\\






http://www.biogasunion.de

http://www.european-biogas.eu

http://www.aebiom.org

http://www.aebiom.org

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to be a barrier. With approximately 3 months on average for biogas plants <500 kW installed electric capacity, the approval period –preparing the documents until the final approval – is adequate. Same is true with 5 months on average for biogas plants with >500 kW installed electric capacity. But of course the approval period can vary from authority to authority, depending on their work load, skilled personnel or local conditions.For approval, several emission thres-holds have to be fulfilled; amongst them are emissions into the air, odour emissions and noise. Requirements to reduce emissions into the air depend on whether the biogas plant needs an approval according to the 4th Ordinance for the Implementation of the Federal Immission Control Act (4th BImSchV) or not. If a biogas project falls under the scope of the 4th BImSchV is dependent on the amount, kind and source of the utilized feedstock as well as the thermal capacity of the plant.If this is the case, the biogas plant has to actively undertake measures to guarantee that the emissions into the air do not exceed given thresholds, which are CO 1 g/m³, NOx 0.5 g/m³, dust 0.2 g/m³, SO2 0.3 g/m³ and 0.6 g/m³ for Formaldehyde. If no approval according to 4th BImSchV is required, rules of the Technical Instructions on Air Quality Control (TA Luft) apply, saying, that total immissions to housings must not exceed thresholds. So it may be that a biogas plant does not need to reduce emissions, if the total impact

3.2.7. Regulation

The financial support of the feed-in law (EEG) for biogas and biomethane used in CHP is complemented with regulations for grid access, grid transmission and sharing of grid connection costs. For the electricity grid, rules are defined within the feed-in law itself, while biomethane feeding-in is regulated by several ordinances, as for instance GasNZV, GasNEV, ARegV, Strom NEV etc. These regulations oblige grid operators to feed RES-electricity and biomethane into their grid, to extend their grid if required and to transmit RES electricity with priority through the grid. Costs for the connection of the biogas plant to the nearest feasible connecting point have to be covered by the biogas plant operator.No regulation in form of a direct quota obligation is implemented. District heat based on biogas CHP, however, is eligible under the renewable heat obligation for new buildings within EEWärmeG. If the RES-H quota is fulfilled with biogas, at least 30% of the heat demand has to be covered. This could become an attractive market, as within EEG, biogas is obliged to operate at least 60% CHP. In case new biogas plants do not operate with at least 60% CHP, they have to sell the electricity at the spot market rather than receiving fixed tariffs, but still it is supported up to the total amount of the feed-in tariff they would have received instead (feed-in tariff – spot market price +management premium).The approval of biogas and biomethane plants by authorities is not considered

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Useful Links:Regulations:• Feed-in Law EEG• EEWärmeG• GasNZV• GasNEV• ARegV• Strom NEV• 4th BImSchV• Ordinance on the Utilisation of Biowas-tes • TA Luft• TA LärmInstitutions:• Federal Ministry for the Environment, Nature Conservation and Nuclear Safety • Federal Environment Agency• German Energy AgencyAssociations:• FvB - German Biogas Association• Biogas Union• Biogas Council

for surrounding households does not exceed the thresholds. Concerning noise emissions there are binding thresholds defined within the Federal Immission Law BImSchG. For biogas plants, which do not require an approval according to 4th BImSchV, same thresholds can be applied by authorities. Thresholds vary in relation to land category (see Table ‘Emission Thresholds’).The Federal Immission Law also regulates thresholds for odour emissions of biogas plants. For biogas plants, which do not require an approval according to 4th BImSchV, same thresholds can be applied by authorities. Depending on land category, different thresholds apply: in mixed area, odour must not occur in surrounding houses in a minimum distance of 300m more often than 10% of the annual hours. In commercial/industrial areas the threshold is 15% of annual hours. In the outskirt areas, odour immissions of up to 15 to 22% of annual hours are allowed, for agricultural housings it may be higher.

Area Industrial Comm-

ercial

Mixed General

residential

Pure

residential

Around

hospitals

Day 70 dB(A) 65 dB(A) 60 dB(A) 55 dB(A) 50 dB(A) 45 dB(A)

Night 70 dB(A) 50 dB(A) 45 dB(A) 40 dB(A) 35 dB(A) 35 dB(A)

Table ‚Emission Thresholds‘: Noise emission thresholds in different areas

Presentation of Doris Einfeldt, http://www.biogas-infoboard.de/pdf/Einfeldt_AH_v3.pdf

http://www.bmu.de/files/pdfs/allgemein/application/pdf/eeg_2012.pdf

http://www.gesetze-im-internet.de/bundesrecht/eew_rmeg/gesamt.pdf

http://www.gesetze-im-internet.de/bundesrecht/gasnzv_2010/gesamt.pdf

http://www.gesetze-im-internet.de/gasnev/index.html

http://www.gesetze-im-internet.de/aregv/index.html

http://www.gesetze-im-internet.de/stromnev/index.html

http://www.bmu.de/files/english/pdf/application/pdf/bimschv_4aend_en_bf.pdf

http://www.bmu.de/files/pdfs/allgemein/application/pdf/bioabfv_engl.pdf

http://www.bmu.de/files/pdfs/allgemein/application/pdf/bioabfv_engl.pdf

http://www.bmu.de/files/pdfs/allgemein/application/pdf/taluft_engl.pdf

http://www.umweltbundesamt.de/laermprobleme/publikationen/talaerm.pdf

http://www.bmu.de

http://www.bmu.de

http://www.umweltbundesamt.de

http://www.biogaspartner.de


http://www.biogas-union.de


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enables excellent framework conditions by providing investment security with its 20-years payment period for the tariffs, the prioritized grid access and the purchase obligation of the grid operator. Banks in Germany are familiar with financing biogas plants. If a secured feedstock supply chain can be presented for the mid-term, state-of-the-art technology is applied and a sound heat use can be proved, banks are willing to grant credits. However, sharpened requirements of EEG 2012 (e.g. to use at least 60% of heat in CHP) heightens the risk of failing the requirements and could therewith make it more difficult to get financing due to higher risks.Some federal states grant subsidies for investments in rural areas or the agricultural sector. In general, public subsidies can be claimed in addition to EEG-support at KfW-Bank in terms of low interest loans for credits with a long payback period.38 Several private equity funds are doing business in the German biogas market too, looking for attractive investment opportunities.Useful links:Rating agencies:• Standard & Poor’s• Moody’s• COFACE• Corruption Perception Index• IFC Doing Business

38 KfW, http://www.kfw.de/kfw/de/Inlandsfoerde-rung/Foerderberater/Erneuerbare_Energien/Biogas/index.jsp


Investments into German markets are ‘safe’ from a country risk perspective, according to established rating agencies. Reliability and credit worthiness of the German economy is rated with best scores at Standard & Poor’s33 and Moody’s. In the COFACE country risk rating34 Germany positions itself at the top of the score same as the Corruption Perception Index for the level of transparency.35 The ease of doing business is seen to be quite well in Germany by IFC World Bank, although starting a business is ranked relatively low due to high administration and regulation requirements.36

As Germany is member of the Eurozone, currency exchange risk within this zone, that is to say for investors coming from other member countries of the Eurozone, is low. The average inflation rate of 1.7% for the period 2005 to 2010 is one of the lowest within Europe (1.2% in 2010).37

The easiness of getting a credit by banks is very much dependent on individual project designs as they assess reliability of chosen technology as well as feedstock supply security and price risks. In general, German feed-in law

33 Standard & Poor’s, http://www.standardand-poors.com/ratings/en/eu/34 COFACE, http://www.coface.com/CofacePor-tal/COM_en_EN/pages/home/risks_home/coun-try_risks/rating_table?geoarea-country=COUN_AREA_04&crating=&brating35 Corruption perceptions index 2011, http://cpi.transparency.org/cpi2011/results/36 IFC, Doing Business Index, http://www.doing-business.org/rankings37 Wirtschaftskammern Österreich, http://wko.at/statistik/eu/europa-inflationsraten.pdf

http://www.standardandpoors.com

http://www.moodys.com

http://www.coface.com

http://cpi.transparency.org

http://www.doingbusiness.org

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high weights. Secondly, as the biogas production is the result of biological decomposition processes in the fermenter, residents are worried about odour annoyances. Thirdly, as biogas production in Germany is based on energy crops to a wide extent, inhabitants same as environmental NGOs do not like to see corn to be cultivated everywhere. This is based on environmental reasons (lower bio-diversity, impact on landscape picture, many areas with high-growing plants) as well as on concerns on utilizing food-suitable crops for energy purposes.It is of utmost importance to carefully plan new biogas plants and to integrate local stakeholders and decision makers into the planning process as early as possible. Measures for odor emission reduction should be considered to reduce stress for residents. If possible and economically feasible, biogas plants should not rely on energy crops only, but also use bio-wastes and/or residues. If only using energy crops, a diversified mix of energy crops should be applied.When planning to invest into a biogas plant, it could be helpful to consult related associations and support agencies on how to proceed in the best way. Usually, there is a lot of know-how and experience available to avoid common mistakes within the planning process and to get support in the implementing process. In Germany, the infrastructure of industry associations and energy agencies is excellent, as there are several biogas associations present with different focus and regional extension and consulting energy agencies in every federal state.

Project financing institutions:• KfW-Bank• German Association of energy agen-cies


The readiness for uptake is considered to be good, though new projects need to be planned and implemented with the participation of local inhabitants and stakeholders. With more than 7,000 biogas plants all over Germany in 2011 the technology is well known to the public, although only a minor group of stakeholders is familiar with detailed functioning, regional impacts and benefits of biogas plants.The accelerated development of RES in Germany is accepted by more than 95% of the population, thus by a huge majority39, even in their direct neighbourhood (60-70%).40 However, when it comes to biogas, local opposition has intensified in recent times. Several biogas plans have reported implementation stops due to local initiatives and heavy opposition, even though this is still rather an exemption than common practice. The main arguments against biogas are: Firstly, there are concerns on increased truck traffic for the feedstock supply on improper local roads, meaning a higher risk for inhabitants and a higher stress for roads which may not be suited for

39 Forsa, http://www.unendlich-viel-energie.de/uploads/media/FORSA-Akzeptanz_EE_Einauswer-tung_Bundeslaender_01.pdf40 Föderal erneuerbar, http://foederal-erneuerbar.de/startseite

http://www.kfw.de

http://www.energieagenturen.de/index.php/cat/27/title/Wir


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Useful links:Facts and Figures:• German Renewable Energies Agency Information Plaform• Project ‘Föderal Erneuerbar’Associations:• BBE - German Bioenergy Association• FvB - German Biogas Association• Biogas Union• Biogas CouncilInstitutions:• Federal Ministry for the Environment, Nature Conservation and Nuclear Safety • Federal Agency for Renewable Resour-cesEnergy Agencies:• Dena - German Energy Agency• GTAI - Germany Trade & Invest• German Association of energy agen-cies

http://www.unendlich-viel-energie.de

http://www.unendlich-viel-energie.de

http://www.foederal-erneuerbar.de



http://www.biogas-union.de


http://www.erneuerbare-energien.de

http://www.erneuerbare-energien.de

http://www.bio-energie.de

http://www.bio-energie.de

http://www.dena.de

http://www.gtai.de/GTAI/Navigation/EN/Invest/Business-location-germany/federal-states.html



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3.3. Italy

Associazione Italiana Energie

Agroforestali (AIEL)

Annalisa Paniz

Viale dell’Universita 14

I-35020 Legarno

Tel.: +49-88 30 772


Country Score Central Italy - Biogas (November 2011)In the general scoring for sector, Italy - Central is rated place 12 out of total 81. The underlying cate-gories that influence this result are displayed in the bar chart.

In the general scoring for sector, Italy - Central is rated place 12 out of total 81. The underlying cate-gories that influence this result are displayed in the bar chart.

Country Score Central Italy - Biomethane (November 2011)


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inland of the northern and central regions, climate classifications range from humid subtropical to humid continental, as well as oceanic along the coasts. The climate of the Po valley region is continental and therefore characterized by harsh winters and hot summers. The coastal areas of Liguria, Tuscany and most parts of southern Italy have a Mediterranean climate.Italy has a relatively small number of global multinational corporations in comparison to other economies of comparable size; however, there is a large number of small and medium-sized enterprises, notoriously clustered in several industrial districts, which constitute the backbone of the Italian industry.In 2009, Italy was the world’s 7th largest exporter. Italy’s closest trade ties are within the European Union, where 59% of its total trade is conducted. Its largest EU trading partners, in the order of market share, are Germany (12.9%), France (11.4%), and Spain (7.4%).Nowadays, the Italian economy suffers from numerous problems. After a strong GDP growth of 5–6% per year from the 1950s to the early 1970s, and a progressive slowdown in the 1980s and 1990s, the last decade’s average annual growth rates performed rather poorly at 1.23%, whereas the average annual growth of the EU was at 2.28%. The stagnation of economic growth, and the political efforts to revive it with massive government spending from the 1980s onwards, eventually produced

3.3.2. Basic Data

Italy, officially the Italian Republic, is a unitary parliamentary republic in south-central Europe. In the north, Italy borders with France, Switzerland, Austria, and Slovenia along the Alps. Southern Italy is made up of the Italian Peninsula, Sicily, Sardinia –the two largest islands in the Mediterranean Sea – and many other smaller islands. Italy is spread over some 301,338 km2 and is characterized by a temperate seasonal climate. With 60.6 million inhabitants, Italy is the fifth most populous country in Europe, and the 23rd most populous country in the world. The population density, which amounts to 201 people per km² (520/sq. mile), is higher than that of most Western European countries. However, the distribution of the population is rather heterogeneous. Whereas areas, such as the metropolitan areas of Rome and Naples, or the Po Valley, which alone accounts for almost half of the national population, are densely populated, vast regions, such as the Alps, the Apennine highlands, the plateaus of Basilicata, and the island of Sardinia are only very sparsely populated.Italy is divided into 20 regions, five of which are having a special autonomous status that enables them to enact legislation on various local matters. The country is furthermore subdivided into 110 provinces and 8,100 municipalities.Due to the longitudinal extension of the Italian peninsula, and its largely mountainous internal conformation, Italy’s climate is highly diverse. In the

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heavy taxation, and public spending that accounts for about half of the national GDP. In addition, the most recent data show that Italy’s spending in R&D in 2006 was equal to 1.14% of GDP which is significantly lower than the EU average of 1.84%.Regarding the national road network, there were 668,721 km (415,524 mi) of serviceable roads in Italy in 2002, including 6,487 km (4,031 mi) of motorways which are state-owned but privately operated by Atlantia. In 2005, about 34,667,000 passenger cars (590 cars per 1,000 people) and 4,015,000 goods vehicles circulated on the national road network.In 2003, the national railway network, which is state-owned and operated by Ferrovie dello Stato, extended to 16,287 km (10,120 mi) of which 69% are electrified. 4,937 locomotives and railcars are circulating on this network. In 2002, the national inland waterways network comprised 1,477 km (918 mi) of navigable rivers and channels. Useful links:Facts and Figures:• ISTAT - Italian Statistical Office• EUROSTAT - European Statistical Of-fice

a severe rise in public debt. According to the EU’s statistical office, Eurostat, Italian public debt rose to 116% of GDP in 2010, resulting in the second biggest debt ratio after Greece (with 126.8%).However, a major difference between Greece and Italy constitutes the fact that the biggest share of Italian public debt is owned by national subjects. Furthermore, Italian living standards are marked by a considerable north-south divide. Whilst the average GDP per capita in the north exceeds the EU average by far, many southern regions lie significantly below this average. Italy has often been referred to as the sick man of Europe, characterised by economic stagnation, political instability and problems in pursuing reform programs.More specifically, Italy suffers from structural weaknesses which are due to the geographical conformation, and the lack of raw materials and energy resources: in 2006, the country imported more than 86% of its total energy consumption (99.7% of solid fuels, 92.5% of oil, 91.2% of natural gas, and 15% of electricity). The Italian economy is weakened by its high public deficit as well as its lack of infrastructural development, market reforms, and investment into research. On the Index of Economic Freedom of 2008, the country ranked 64th in the world and 29th in Europe - the lowest rating in the Eurozone.Italy suffers from an inefficient state bureaucracy, low property rights protection, high levels of corruption,

http://www.istat.it

http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-DK-08-001/EN/KS-DK-08-001-EN.PDF

http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-DK-08-001/EN/KS-DK-08-001-EN.PDF

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Owing to the renewable source incentive system, the interest in the co-digestion of slurry with energy crops and agro-industrial waste has grown throughout 2009 and 2010. Biogas:The Italian nREAP is denominated ‘Piano di azione nazionale per le energie rinnovabili dell’Italia’ (PAN, National Action Plan for Renewable Energies). For 2020, the target for biogas set by nREAP is 0,51 Mtoe (see Table ‘RES Production’ and Figure ‘Trend Production’).The percentages of electricity generated from biogas in relation to the total production of electricity from renewable sources are (related to MW and GWh, respectively): 1.51% and 2.13% (2005); 1.64% and 3.19% (2010); 1.79% and 3,59% (2011); 1,94% and 3,98% (2012); 2.08% and 4.33% (2013); 2.21% and


In 2008, Italy’s ratio between gross renewable production and internal gross electricity consumption, which takes the foreign balance into account, was 16.5%1. Gross production from RS amounted to 17.5% of total gross production. Among the different RES, biogas reached a production level of 1 599.5 GWh in 2008, which constitutes the equivalent of about 2.75% of gross production from renewable energies.About 80% of this production derives from the recovery of biogas from municipal waste landfills. The remainder comes from about 150 biogas plants located on farms. About 40 of these agricultural biogas plants are simple low-cost plants that consist of plastic covers laid over slurry storage tanks.1 (www.gse.it)

Table ‚RES Production‘: Gross RES electricity production in 2009 and forecasts for 2020

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Figure ‚Trend Production‘: Expected trend of gross electricity production deri-ved from biomass

4,67% (2014); 2.33% and 4.97% (2015); 2.43 and 5.25% (2016); 2.53% and 5.51% (2017); 2.61% and 5.73% (2018); 2.68% and 5.93% (2019); 2.74% and 6.09% (2020). The PAN establishes several targets for the use of biogas for heat production. The target set by nREAP for 2020 is 0.266 Mtoe (see Table ‘RES Heat Consumption’, Figure ‘Trned Heat Consumption’).The percentages of heat generated from biogas compared to the total of heat generated from RS have been and are expected to be the following: 1.36% (2005); 0.68% (2010); 0.79% (2011); 0.89% (2012); 1.04% (2013); 1.20% (2014); 1.37% (2015); 1.57% (2016); 1.78% (2017); 2.02% (2018); 2.27% (2019); 2.54% (2020).

The only implemented economic instrument is the feed-in-tariff, which corresponds to 280 €/MWh over a period of 15 years. There is still a lack of a coherent policy framework regulating the biogas sector. The legislative decree No. 28/2011 can be considered the only legislative act that regulates the entire sector of electricity production from RES (including Biogas). Nevertheless, basic decrees for the implementation are not in place yet.Biomethane:Targets to use bio-methane (BM) as a fuel, are included in the targets which are set for biofuels in general (such as biogas, vegetable oils, etc.). These targets include BM, but exclude biodiesel, bioethanol, hydrogen from RS, and electricity from RS.

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Figure ‚Trend Heat Consumption‘: Expected trend of gross heat consumption from biomass

Table ‚RES Heat Consumption‚: Gross RES heat consumption in 2008 and forecasts for 2020

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About the measures for BM, the PAN declares that there is still a lack (and thus a need) for quality standards for BM to be injected into the natural gas grid. Concerning a possible tariff in order to encourage BM production, the PAN proposes to either establish a tariff for the energy injected into the gas grid as BM, or a tariff linked to the BM energy utilisation on sites different from those where BM is produced. The measures are described in more detail but still in general terms by the Legislative Decree 28/2011 (national transposition of the EC directive 2009/28/EC on the promotion of the use of energy from renewable sources), which delegates the fixation of tariffs as well as the definition of quality standards for BM to specific future Ministerial Decrees.

Thus, BM is included into the biofuels for transport targets, which are the following: 0 kteo (2005); 5 ktoe (2010); 9 ktoe (2011); 14 ktoe (2012); 18 ktoe (2013); 23 ktoe (2014); 27 ktoe (2015); 32 ktoe (2016); 36 ktoe (2017); 41 ktoe (2018); 45 ktoe (2019); 50 ktoe (2020) (see Table ‘RES Transport Consumption’).The share of biofuels for transport of the total of biofuels derived from RS (the total also includes biodiesel, bioethanol, hydrogen from RS, electricity from RS) expressed in percentages have been and are expected to be the following: 0% (2005); 0.42% (2010); 0.66% (2011); 0,91% (2012); 1.06% (2013); 1.23% (2014); 1.32% (2015); 1.45% (2016); 1.51% (2017); 1.61% (2018); 1.65% (2019); 1.72% (2020).

Table ‚RES Transport Consumption‘: Gross RES transport consumption in 2008 and forecasts for 2020

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intensive agriculture, appears to be of particular importance. Here, the majority of the Italian livestock producing farms is located, and the largest number of biogas plants has been constructed during the last years (in the ‘70, in the ‘80 and ‘90 and also during the last ‘wave’, characterized by the adoption of the co-digestion approach and the German construction technology). In the Po Valley plain where biogas plants are mainly fed with animal manure, the biogas sector could be even more developed if small biogas plants (CHP from 50 to 150 kWe) were constructed. However, for this to happen, these plants will have to become more economic (reduction of investment costs and a lower share of electricity self-consumption). In other geographic locations within Italy (i.e. Centre and South) the opportunities that the cultivation of non-conventional crops (e.g. perennial crops not for food/feed use) must be investigated more detailed. One important bottleneck is the local scarcity of water, which is required for plant cultivation as well as biogas plant operations.

3.3.4. Feedstock

The main substrates that are used in Italian biogas plants are animal slurry and manure (cows and pigs, potential estimated 130 billion tons/year) as well as agro industrial residues and energy crops (mainly maize silage, also sorghum) (see Figure ‘Substrate Biogas’). About 58% of the plants operate in co-digestion with manure, energy crops, and agro industrial residues.Generally, one MW of installed capacity, when used effectively, requires 250-300 ha cropland producing maize silage, which is then to be used in co-digestion with manure. In the flat areas alongside the river Po, the harvesting productivity (whole plant) with irrigation supply facilities can reach 45-50 tons/ha/year maize. A second harvest in the same year (e.g. Triticale) can yield about 30-35 tons/ha/year.Biogas:Concerning the availability of feedstock for biogas production, the potential in the Po Valley plain, which is characterized by

Figure ‚Substrate Biogas‘: Substrates used for biogas production

Source: CRPA – May 2011

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The investment costs of biogas plants can range from 250 to 700 €/Nmc per anaerobic digester, or between 2500-7500 € per kWe installed. A typical investment will be amortized in about 4-8 years.The subsidies for the operation of biogas plants are based on a feed-in-tariff instrument for biogas plants with CHP units up to 0.999 MWe. The tariff has not been set by the PAN but it has been fixed by the national Italian Law no. 99/2009. The great incentives for electricity production from biogas (feed-in-tariff = 0.28 €/kWhe lasting for 15 years) has induced many farmers to invest in CHP plants with biogas. With regards to the incentive schemes, the bottleneck is represented by the money to be paid for stimulating all RES. The overall budget for electricity production is based on the electric tariff which is paid by all Italian electricity consumers (private households, industries, public structures, etc.) to the electricity service company (ENEL). The economic crisis and the increasing demand for the subsidies in place for all RES (including photovoltaic, solar, wind, hydro, biomass, etc.) put the entire system under pressure pushing policy makers to decrease the level of subsidies and to find other systems for developing RES.The very high level of fossil fuel prices in Italy are due to:1) The lack of national fossil fuel resources

Biomethane:With regards to the feedstock for biomethane production, the potential seems to be particular high in the Po Valley Plain due to the concentration of intensive agriculture and large-scale livestock production (i.e. pig farms in Lombardy, Emilia-Romagna, Veneto and Piedmont Regions; dairy cattle farms in Lombardy, Emilia-Romagna and Veneto Regions; beef farms in Veneto and Piedmont Regions). Some areas between the Regions of Veneto and Emilia Romagna distinguish themselves by extensive farming, large areas of crop land per farm, and low levels of urbanization (in particular Provinces of Rovigo, Ferrara, Ravenna). Accordingly, these areas bear a large potential for crop cultivation devoted to the production of bioemethane. In other parts of Italy (i.e. Centre and South) the possibility of non-conventional crops cultivation (e.g. perennial crops not for food/feed use) has to be further investigated.Useful links:• CRPA• CRPA: Il Biometano in Europa e i pos-sibili incentivi in Italia• CRPA: Piu’ Biogas integrando i reflui zootecnici con silomais• CRPA: Produrre Biogas un’opportunita’ che piace agli agricoltori• CRPA: Biogas - Metodi di valutazione del potenziale metanigeno• CRPA: Biomasse e redditività degli im-pianti a Biogas

http://www.crpa.it

http://ias.crpa.it/pls/agriweb/agriwcore.coreWorks?section_id_in=PUBL&work_type_id_in=PUBL&work_id_in=106949&iftype=FORM_PRINT&commodity_code_in=&subject_matter_code_in=&thematic_area_code_in=&compartment_id_in=&addressee_type_id_in=&trans_language_in=










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Useful links:Facts and Figures:• Energy costs: Contact - Alessandro Ragazzoni • Biogas. Normative e biomasse: le con-dizioni per fare reddito. Alessandro Ra-gazzoni (2011)


Over the last decade, biogas production has become a consolidated practice within the agricultural and animal breeding sector (pigs and cows), which until now has mainly produced electricity to be fed into the public electricity grid.In terms of numbers of installed plants and their related capacity, the most important regions in Italy are Lombardy, Emilia Romagna, Veneto, Piedmont and South Tirol, where numerous cattle sheds are present. At the national level, there are about 15,000 farms with more than 100 cows. More than 10,000 are located in the first four regions listed above.The biogas sector has experienced a strong expansion phase during the last 3-4 years in terms of the construction of new plants which have been built under the incentive scheme. However, the opportunities for investors remain uncertain due to the ill-defined terms of the feed-in tariff.So far, biogas is mainly used for generating electricity whereas heat production has been disregarded except for the heating of the digesters themselves.

2) The oligopolistic system that exists among the relatively few companies which sell fossil fuels3) High level of taxes which have been imposed on fossil fuels due to very heterogeneous reasons from the beginning of the last century (among the first ones: war to Lybia, 1911; among the most recent ones: public debt, financial and economic crisis in Italy, 2011/2012).The very high prices for fossil fuels increase the economic feasibility of biomass, which would not be attractive from an economic point of view if the taxes were not in place. The prices for input materials are:• Silage maize: 50 €/t (costs can be re-duced to 25 €/t if the biogas plant owner owns the equipments for cutting, collec-ting, and storing the maize into silos).• Sweet sorghum silage: 25 €/t• Triticale silage: 40 €/tThe energy costs can be subdivided according to the main biogas plant feedstock and biogas plant size:2

• In-farm and extra-farm energy crops: 200 €/MWh (1 MWel) – 240 €/MWh (0.1 MWel). • In-farm energy crops: 175 €/MWh (1 MWel) – 250 €/MWh (0.1 MWel). • Animal manure: 130 €/MWh (0.6 MWel) – 200 €/MWh (0.1 MWel).• Animal manure and silage maize (30%FM max): 150 €/MWh (0.6 MWel) – 210 €/MWh (0.1 MWel).

2 A. Ragazzoni, 2012

http://www.unibo.it/SitoWebDocente/default.htm?UPN=alessandro.ragazzoni%40unibo.it&TabControl1=TabCV

http://www.unibo.it/SitoWebDocente/default.htm?UPN=alessandro.ragazzoni%40unibo.it&TabControl1=TabCV

http://www.informatoreagrario.it/ita/libri/PDF_anteprime_libri/282-1.pdf



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In a few cases a small amount of the heat generated is also used for heating the farmers’ house and/or the building dedicated for ‘direct products marketing’ on the farm.The potential of biogas in Italy has been estimated at 20 TWh/year corresponding to the installed capacity of about 2.700 MWe and 6.5 billion Nmc (CRPA.it) biogas produced respectively. In Italy about 80-85 billion Nmc of fossil methane (imported from Russia, Libya, Algeria and near east) is consumed annually (trend increasing) and the national methane production is about 8 billion Nmc (trend decreasing).In May 2011, 521 biogas plants, of which 130 are under construction, were inventoried with a total power installation of around 350 MWe (Figure ‘Inventory’ and Table ‘Biogas Plants Italy’). These

Figure ‚Inventory‘: Inventoried biogas plants

Source: CRPA – May 2011

plants are mainly located in northern Italy. The total energy production is around 444.3 ktoe.Despite the fact that there is no biomethane plant in Italy based on agricultural substrates, favourable market conditions, such as the national fossil methane grid, make biomethane a promising market even though there is no plant in operation and no legislative framework in place for the moment. BM production is presently hindered by a lack in Italian legislation concerning production and use (vehicle fuel or gas injection into the gas grid) of BM. Legislation concerning BM development should encompass: • BM incentives;• Repartition of costs among different stakeholders and actors (mainly agricul-tural biogas producers and gas grid ow-ners and managers); • Technical rules that are necessary to produce and sell BM as a vehicle fuel as well as the technical rules necessary to inject BM into the gas grid.Useful links:Facts and Figures:• CRPA: State of Biogas in Italy

http://www.crpa.it/media/documents/crpa_www/Convegni/20081211_biogasBruxelles/Piccinini_text.pdf

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• Regional Forest Service of Padua and Rovigo* Province of Padua - Environment Sector;* Municipality of Vescovana (PD);* Environmental Protection Regional Agency – Provincial Department of Padua;* Health Local Authority Este - Prevention Department;* Regional Distribution Management of Electricity Society (ENEL);* Basin Authority of the Adriatic rivers (VE);* Land Reclamation Consortium ‘Euganeo’;* Regional Direction of Cultural Heritage and Landscape of Veneto Region;* Superintendence for the Archaeological Heritage of Veneto Region;* Superintendence for the Architectural Heritage and Landscape for the Provinces of Venice, Belluno, Padua and Treviso;

3.3.7. Regulation

The approval process for biogas plants can be subdivided into two cases:• ‘Conferenza dei servizi’ (Unified proce-dures): all the competent authorities are involved in the same meetings (region or province, municipality, health authority, fire brigades, etc.)• ‘Declaration of activity start’ (DIA) to be presented to the municipality plus all the single authorizations which are re-quired.A practical example of all the Authorities involved in the Unified procedures, that can also affect the DIA procedure, consists of the following list:- Veneto Region:• Energy Project Unit,• Geology and Mines Direction,• “Civil Engineering” Peripheral Unit of Padua,• IRA Service of Padua,

N o m i n a l power (kWe)

Number and % of biogas plants I n c r e a s e 2010/2011April 2007 March 2010 May 2011

Up tp 100 44 28,6% 49 17,9% 54 10,4% 10,2%101 - 500 28 18,2% 61 22,3% 105 20,2% 72,1%501 - 1000 19 12,3% 100 36,6% 289 55,5% 189%> 1000 14 9,1% 19 7% 24 4,6% 26,3%In boiler 8 5,2% 10 3,7% 11 2,1% 10%n.a. 41 26,6% 34 12,5% 38 7,3% -Total 154 100% 273 100% 521 100% 90,8%

Table ‚Biogas Plants Italy‘: Number and type of biogas plants in Italy

Source: CRPA

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The direct quota obligation is managed by Green Certificates (GCs), which are tradable instruments that GSE grants to qualified renewable-energy power plants (IAFR qualification). They have been commissioned before 31 December 2012 as per Legislative Decree 28/2011.The number of certificates issued is proportional to the electricity generated by the plant/system and varies depending on the type of the renewable source used and of the project (new, reactivated, upgraded, renovated system/plant).The GC support scheme is based on the legislation which requires producers and importers of non-renewable electricity to inject a minimum quota of renewable electricity into the power system every year.GCs certify the compliance with the renewable quota obligation: each GC is conventionally worth 1 MWh of renewable electricity. GCs are valid for three years: those issued in respect of electricity generation in a given year (reference year) may be used towards compliance with the obligation also in the following two years. To fulfil their obligation, producers and importers may inject renewable electricity into the grid or purchase an equivalent number of GCs from green electricity producers. Producers may apply for GCs after qualifying their plants as renewable-energy power plants/systems (IAFR). Producers whose plants/systems have a yearly average nominal capacity that does not exceed 1 MW (0.2 MW for wind power plants/

* Ministry of Communications - Veneto Territorial Inspectorate - Section III;* State Property Agency - Veneto Territorial Agency - Venice Office;* Ministry of Economic Development Directorate General for Energy and Mineral Resources - National Bureau of Mining, Hydrocarbons and Geothermal Energy;Access to the grid is allowed after a preliminary technical agreement with TERNA SpA, who owns and manages the national electrical transmission grid. After the project approval, the biogas plant owner must present the project to the local authority (i.e. region or province or municipality). The qualification of plants as plants using renewable energy sources (‘IAFR’ – RES-E) is a prerequisite to obtain green certificates or the all-inclusive feed-in tariff.Eligible plants include: • new, upgraded/repowered, totally/par-tially renovated and reactivated plants that have been commissioned after 1 April 1999• co-firing plants that have been com-missioned before 1 April 1999 and have operated as hybrid plants after this date. Starting in 2009, under the Ministerial Decree from the 18th of December 2008, plant owners are required to pay a contribution (based on the average yearly capacity of their plant) to the costs incurred by GSE for the qualification procedure.

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The approval periods for biogas plants, starting with preparation of the documents and ending with the final approval, are relatively long. In the case of a biogas plant that has up to 1MW installed electric capacity this process takes approximately a year. Biogas plants with a thermal output of up to 3 MW have to actively undertake measures to guarantee that their emissions into the atmosphere do not exceed given thresholds, which are summarized in Table ‘Emission Thresholds’.Useful links:Facts and Figures:• Approval process by authorities• Qualification of plants• Green certificates• Biogas emission threshold• Regione del Veneto • Regione del Veneto - ALLEGATOA alla Dgr n. 2745 del 16 novembre 2010

systems), excluding solar, can opt for GCs or the the all-inclusive feed-in tariff.Upon the first issuing of GCs, GSE opens an ownership account in the name of the producer where the issued GCs are deposited. GSE tracks the movements of GCs via a dedicated information system. Holders of ownership accounts may access the system after obtaining an appropriate identification code from GSE. GSE also creates ownership accounts in the name of producers and/or importers subject to the obligation specified in Art. 11 of the Legislative Decree 79/99 (upon receiving their self-certification concerning the non-renewable electricity that they have generated and/or imported), as well as in the name of parties wishing to trade GCs. Holders of ownership accounts can access their dedicated area of the information system via the internet in order to check the status of their accounts and the movements that have occurred. They can furthermore use their account to purchase and/or sell certificates.

Biogas emission threshold NormTotal Organic Carbon (COT) 150 mg/Nm³ D.Lgs. 152/2006,

Sezione 3, Parte III, Allegato IX alla parte 5A

CO 800 mg/Nm³NO2 500 mg/Nm³Chlorine Inorganic compounds as gas (i.e. HCl)

10 mg/Nm³

Hydrogen sulfide 0.1 % D.Lgs. 152/2006, Sezione 6, Parte II, Allegato X alla parte 5A

Table ‚Emission Thresholds‘: Biogas emissions thresholds

http://www.regione.veneto.it/Bandi+Avvisi+Concorsi/Avvisi/Conferenza+servizi+agroambiente+Bioidea.htm

http://www.gse.it/en/qualificationandcertificates/Plantsqualification/Pages/default.aspx

http://www.gse.it/en/qualificationandcertificates/GreenCertificates/Pages/default.aspx

http://www.camera.it/parlam/leggi/deleghe/06152dl5.htm

http://bur.regione.veneto.it/BurvServices/pubblica/DettaglioDgr.aspx?id=228638

http://bur.regione.veneto.it/BurvServices/pubblica/Download.aspx?name=2745_AllegatoA_228638.pdf&type=9&storico=False

http://bur.regione.veneto.it/BurvServices/pubblica/Download.aspx?name=2745_AllegatoA_228638.pdf&type=9&storico=False

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biogas plants are not established at the national level, but they are fixed at the regional level by the means of the Regional Development Plan (Piani di Sviluppo Rurale, PSR) according to the EU Common Agricultural Policy. Accordingly, the conditions for accessing these subsidies are particularly severe and only a minority of biogas plants have been able to use these subsidies for paying part of the investment costs. There is no incentive or rule in order to increase the whole plant efficiency and to use the exceeding heat produced by the engine.Investments in the Italian market are considered to be ‘quite safe’ from a country risk perspective. According to COFACE country risk rating,3 Italy positions itself in the centre span. However, the Corruption Perception Index for the level of transparency is not encouraging.4 Useful Links:Rating agencies:• Standard & Poor’s• Moody’s• COFACE• Corruption Perception Index• IFC Doing Business

3 COFACE: http://www.coface.com/CofacePortal/COM_en_EN/pages/home/risks_home/country_risks/country_file/Italy?extraUid=5721484 Corruption perceptions index 2011, http://cpi.transparency.org/cpi2011/results/


Banks are familiar with financing bioenergy projects and biogas projects in particular. The market perspectives, the political framework conditions, and the economic parameters are usually well-known to decision-makers. A special focus is put on the reliable, sustainable and long-term availability of feedstock supply when decisions about granting credits and loans have to be made.The high incentives for electricity production from biogas (feed-in-tariff = 0.28 €/kWhe), which are the highest in Europe, have pushed many farmers to invest in biogas production.There are several opportunities for financing biogas projects in Italy:• private consulting and technology companies specialized in financing and leasing of renewable energy projects• financing and leasing by banks and credit institutes.According to several banks in Italy, equity capital of 20-30% of the capital costs is required for the sound financing of biogas projects. The most common financing method in Italy is credits from private banks that include traditional as well as project financing.Generally, many banks in Italy are well prepared to finance biogas projects and usually have dedicated experts. Most house banks of farmers are familiar with this topic and will provide assistance in biogas projects.The subsidies for investments in






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valorisation of their land. Overall, the acceptance of biogas by the public is quite high. Nevertheless, opposition on a local level has intensified recently. The most common problems are related to concerns about the origin and the supply of the biomass used to generate electricity. Sustainability of solid biomass is also a subject of intense discussions at the national level.In Italy, biogas technology is well known to the public, although only a minor


Until now, there has been no discussion or rising concern about the conflict between food and energy production, and the utilization of agricultural land for the production of energy crops. In some cases plants that insisted on using the same area aroused a conflict concerning area disposal. In the last 2-3 years, crop prices have been very low and hence, farmers have regarded biogas as a possibility to improve the

Figure ‚Opposed Plants‘: Plants indicated in red are renewable energy plants that are opposed by the pu-blic (2010)

Source: Nimby forum

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group of stakeholders is familiar with its detailed functioning, its regional impacts, and the benefits that biogas plants entail. 71% of all plants that are opposed by the public or residents nearby are renewable energy plants. Figure ‘Opposed Plants’ indicates the location of these plants (marked with the colour red) in Italy (all renewable energy sources for heat and electricity production are included).

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3.4. hunGary


Hungarian Bioenergy Competence Centre (HBCC)

Imre Németh

4 Tessedik Road

HU - 2100 Gödöllo

Tel.: +36 28 420 291


Country Score Hungary Central Transdanubia- Biogas (November 2011)

In the general scoring for sector, Hungary - Central Transdanubia is rated place 39 out of total 81. The underlying cate-gories that influ-ence this result are displayed in the bar chart.

Country Score Hungary Central Transdanubia- Biomethane (November 2011)

In the general scoring for sector, Hungary - Central Transdanubia is rated place 36 out of total 81. The underlying cate-gories that influ-ence this result are displayed in the bar chart.


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Useful links:Fact and Figures:• Hungarian Central Statistical Office• Ministry of Rural Development• Hungarian Tourism PLC.


Hungary is subject to a binding target of supplying 13% of its total energy demand from RES by 2020. According to the Renewable Energy Strategy for 2007-2020, to reach this target, the use of renewable energy sources must be increased from 55 PJ in 2006 to 186.4 PJ by 2020. However, in Hungary’s National Energy Efficiency Action Plan, approved in December 2010, the government set an even more ambitious target of 14.65% (see Table ‘Energy Directive’). The 2010 target of 3.6% was actually achieved in 2007, mainly due to the increase of biomass utilisation. By 2020, the potential biogas production is expected to reach 32 MW, which would reflect 5% of the total renewable energy generated in Hungary. The trends and volume of changes in renewable energy sources are illustrated in the Figure ‘Renewable Energy’.

3.4.2. Basic data

Hungary is a relatively small country with a territory of 93,303 km2. It is located in Europe’s continental zone with moderate climate. The annual mean temperature as an average of the past years is 11.2 °C, the mean temperature in January is -1.7 °C, and in July it is +22.5 °C. The annual absolute minimum is -16.7 °C, and the absolute maximum is +35.9 °C. The population amounts to 9,986 thousand. The output of the Hungarian economy increased by 1.7% in 2011, which was more than both, the European Union average of 1.6% and the Euro zone average of 1.5%. Agriculture played a decisive role in the rise of the Hungarian GDP in the last quarter of 2011, which was with 1.4% higher than expected. Hungarian agriculture concluded a successful period last year: according to preliminary data, the sector’s output rose by 29 percent. Gross added value grew by 48 %, while net business earnings rose by 75 % compared to 2010 values. Hungary has a highly developed road, railway, air and water transport system. Hungary has a total length of approximately 1,314 km (816.48 mi) motorways.

Share of energy from renewable sources in gross final consumption of energy, 2005

Target for share of energy from renewable sources in gross final consumption of energy, 2020

Hungary 4.3 % 14.65 %

Table ‚Energy Directive‘: 2009/28/EK Renewable Energy Directive

http://www.ksh.hu

http://www.vm.gov.hu

http://visit-hungary.com/

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biodegradable organic matter fraction that is landfilled with municipal solid waste should be decreased to 35% compared to the base year 1995. The 2000 Act XLIII on Waste Management contains the recommendations of the EU directive, and thus in Hungary the biodegradable fraction of landfilled municipal solid waste will have to be decreased. The organic fraction of municipal solid waste is worth disposing of, or utilizing in biogas plants, as it is possible to reduce the amount of landfilled waste and also to limit the CO2-emission, while the material left behind after digestion can be returned to the land.As a result of the above changes, renewable energy source structure will become more diversified. Biomass use will increase in volume, but its share will

Currently there is no central policy or separate plan proposing measures specifically for biogas. The NREAP states that a separate biogas action plan is to be drawn up in the near future, reviewing the energy sector and adopting incentive measures to cover all segments of the sector in the framework of an integrated ‘Biogas Action Plan’. The use of currently available bioenergy shall be encouraged by setting blending targets, guaranteeing feed-in prices and other support programs. The most important support mechanism aiming at bio gas promotion is the guaranteed purchase price for electricity from renewable energy sources (feed-in tariff).The 1999/31/EC directive on landfills prescribes, amongst other things, the issue that by the middle of 2016 the

Table ‚Renewable Energy‘: Forecast of renewable energy amounts

Source: NREAP

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Figure ‚Distribution‘: Distribution of renewable energy sources used in the electricity, heating andcooling and transport sectors (2010)

Source: NREAP

Figure ‚Distribution Forecast‘: Distribution of renewable energy sources used in the electricity, heating and cooling and transport sectors (2020)

Source: NREAP

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Hungarian agriculture is capable of producing biomass in a sustainable way without competing with food and feed production, and at the same time, there is a significant biogas production potential. The theoretical potential of energy sources of biological origin (bioenergy) could provide 20% of the energy demands estimated for 2020, and bioenergy-based electricity production can be planned well in advance, which means it is controllable and can be used to balance the fluctuating energy supply from other RES. Therefore, the limitations of the production of bioenergy mainly are a factor of competitiveness. Bioenergy can primarily play a more important role in fulfilling local heating demands in the future, but strong emphasis also must be put on the spreading of small and medium-capacity combined electricity and heat generating systems.According to the EU-project Redubar, Hungary has a potential to generate almost 9 billion m3 of biogas from agricultural residues, animal by-products, sewage sludge industrial and municipal organic waste (see Table ‘Biogas Potential’ and ‘Potential Waste’).Based on an optimized legal, economic and supporting environment, if 35 per cent of animal manure and 5 % of agricultural land were involved in biogas production, energy production from biogas could increase to 750 MW of built-in performance over the next 10 to 20 years. According to experts from the Hungarian Biogas Association however, the energy supply objective is to directly use at least half of the produced biogas

decrease, as can be seen in the Figures ‘Distrubution’ and ‘Distribution Forecast’.Useful links:Laws and Ordinates:• Hungarain Enery Office• Control Energy Program• National Renewable Energy Action Plan

3.4.4. Feedstocks

Hungary possesses excellent agro-ecological conditions for a competitive production of biomass. Hungary’s total biomass resources sum up to 350 to 360 million tonnes. Of these, 105 to 110 million tons of primary biomass (deriving from vegetation) are regenerated annually; however, only 3% of this is utilised by the energy sector. 59.5 % of the country’s territory is used for agricultural purposes and 20.5 % is covered by forests. The total cultivation area (agricultural + forest + reed + fish pond) adds up to 81.2 % of the country’s territory. The agricultural territory per person is 5,545 m2, and related to cultivated land it is 4,508 m2/person.It is important to stress that the ratios stated above represent the planned national average. Ratios in certain regions or micro regions could, depending on local conditions, differ significantly due to the exploitation of comparative advantages (e.g. in the Southern Great Plain the share of geothermal energy will probably be higher, while in Western Transdanubia solid biomass will be predominant).

http://www.eh.gov.hu/

http://energiakontrollprogram.hu/en

http://www.kormany.hu/hu/nemzeti-fejlesztesi-miniszterium/klima-es-energiaugyi-allamtitkarsag/hirek/nyilvanos-magyarorszag-megujulo-energia-hasznositasi-cselekvesi-tervenek-vegleges-valtozata

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89and at the same time increase the competitiveness of the sector. The use of by-products and other solid wastes from agriculture and forestry (e.g. by-products from ploughing, cuttings from orchards and vineyards) for local energy purposes, and their conversion into end products, will result in additional income for farmers and producers, and can significantly reduce the need of

for direct incineration, bio-methane or fuel. This way the biogas sector will be able to produce 10.5 PJ of electrical energy and 25.5 PJ of heat energy. This latter utilization scheme would have considerable advantages from an energy use efficiency perspective as well.The use of organic matter from animal husbandry for energy purposes can enable productive waste management,

Source of biomass On the average1. A g r i c u l t u r a l

residues131,32 PJ

2. Forestry residues 39,22 PJ3. Animal by-

products3,72 PJ

4. Sewage sludge 5,91 PJ5. Industrial organic

waste0,42 PJ

6. Municipal waste 42,25 PJTotal: 222,84 PJIn biogas: 8 914 million m3

In natural gas equivalence:

5 714 million m3

Table ‚Biogas Potential‘: Biogas potential from different sources

Source: Redubar project

Name Amountmillion t/year

Biogas productionbillion m3/year

Natural gas equivalent[billion m3/year]

Animal By-products

43 1,6 1,1

Municipal waste 10 0,7 0,5Energy Crops 30 3,3 2,2Σ 83 5,6 3,8

Table ‚Potential Waste‘: Hungary’s biogas potential from waste

Source: Redubar project

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This fact called policy makers into action, which resulted in encouraging the use of currently available bioenergy by setting blending targets, guaranteeing feed-in prices and other support programs. The most important support mechanism aiming at bio gas promotion is the guaranteed purchase price for electricity from renewable energy sources (feed-in tariff).As a result of the support system which has encouraged investment over the past few years (KEOP – Environment and infrastructure Operative Programme, UMVP – New Hungary Rural Development Program), construction of Hungarian agricultural biogas plants has now commenced. All the biogas plants in Hungary, with one exception, create electrical energy from the produced biogas and this energy is sold via the feed in tariff system (KÁT). The slow increase in the number of biogas plants has to do with the nature of the support system for biogas production. The current feed in tariff system does not differentiate explicitly between the types of renewable energies even though there are significant differences in the height of their production costs. The feed-in tariff scheme remains a system with guaranteed feed-in tariffs as opposed to a green certificate system. The standard term for the guaranteed takeover of energy for fixed feed-in tariffs will be 15 years within the new system. For an overview of the tariffs for the different plant sizes please consider Table ‘Feed-In-Tariff’ and Figure ‘Changes Feed-In-Tariff’.

communities for fossil energy sources.The most commonly used raw materials for biogas production are :• Manure• Whey• Abattoirs wastes• Industrial organic wastes • Agricultural wastes • Source separated kitchen waste • Commercial organic wastes• Sewage sludgeUseful Links:Fact and figures:• Energiaklub• Hungarian Central Statistical Office• MBE,Hungarian Biogas Association • MAVIR Hungarian Independent Trans-mission Operator Company Ltd.

3.4.5. Business case

For Hungary, where natural gas has the biggest share in the energy consumption mix (44%) and is imported up to 80%, substitution of natural gas by domestically produced biogas has become a particularly pressing issue. The Hungarian National Renewable Energy Strategy (nREAP) therefore places special emphasis on promoting biogas production and use. However, biogas production’s profitability is still negative and currently available technologies still do not allow biogas to compete economically with natural gas.

http://energiaklub.hu/

http://www.ksh.hu

http://www.biogas.hu

http://www.mavir.hu

http://www.mavir.hu

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operate economically only in exceptional cases, while the implementation of such plants may be still justified, principally for the sake of waste management. The aim of the compulsory feed-in tariff system created in 2003 was to support environment friendly, efficient energy sources and technologies, and to facilitate their spreading. It made it compulsory to purchase electricity produced from renewable energy sources and in small cogeneration power

According to expert estimates, average investment costs of a biogas plant for 1 kW performance may amount to HUF 1.2 or 1.3 million. The project costs may be even higher if the biogas plant should furthermore perform special functions (e.g. waste management). As a general rule, the specific costs slightly decline as the capacity of the plant increases. In Hungary – at the actual cost/ return ratio and due to the KÁT – smaller biogas plants (<500 kW) can

Rate*( HUF/kWh) Plants smaller than 20 MWel

Plants of 20 - 50 MWel

Plants larger than 50 MWel

Peak rate 34.31 27.45 21.34Valley rate 30.71 24.57 13.66Deep valley rate 12.53 10.02 13.66

Table ‚Feed-In-Tariff‘: Feed-in tariffs in Hungary (2012)

Figure ‚Changes Feed-In-Tariff‘: Changes in feed in tariff prices between 2003 – 2009

Source: Hungarian Biogas Association

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abundant feedstock like liquid manure, waste from slaughterhouses and sewage. Soaring prices for agricultural crops also hinder a shift towards the use of agricultural crops as biogas feedstock. In 2010 for electrical energy production independent of weather conditions the average feed in tariff was 27.5 HUF (also in the case of production for grid during off peak periods): that is the return from sales for 1 m3 biogas (depending on the efficiency of the plant) was 40-55 HUF for agricultural biogas plants. If the m3 sales price is compared to the cost of raw materials, it becomes clear that for the case of certain raw materials it is barely possible to generate an income that is higher than the costs of the raw materials, which means that the use of these raw materials is not profitable (see Tables ‘Raw Material Cost’ and ‘Feedstock Costs’).

plants at a price higher than the current market tariff. The system is divided into two parts (KÁP, 2003-2007; KÁT, 2008-2011). The primary difference between the two periods lies in their respective calculation techniques, that is, the balance of electricity calculated this way and of money spent for such purposes. Energy produced in cogeneration was the majority (approx. 70%) in both. Over time, producers who were originally not meant to be eligible for subsidies also ‘lobbied themselves’ into the system. This was the case with larger power plants (e.g. the Budapest Power Plant), and fossil power plants (Vértesi, Mátrai) using part biomass, a RES.Hungarian biogas is mainly based on agricultural waste, by-products and residues, and not on energy crops. Since no premiums are paid for the use of renewable crops, Hungarian biogas production is reliant on low cost and

R a w material

Price (t) D e l i v e r y cost (t)

V o l u m e of biogas p r o d u c e d (m3/t)

Price biogas per m3

Maize waste from tinning factory

1500 HUF 1000 HUF 2500 HUF 125 40 HUF

Liquid pig manure

0 1000 HUF 0 26 38 HUF

S i l a g e maize

6000 HUF 2000 HUF 0 190 42 HUF

Table ‚Raw Material Cost‘: The raw material costs of 1 m3 biogas in the case of different raw materials*

*Approximate figures

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potential. Biogas production and the utilization of this potential is still a task for the future. Before 2003 Hungary did not have any agricultural biogas plant. Biogas production and its utilization for the production of electrical energy had mainly to do with sewage treatment plants until recently. During the last years however a strong increase in biogas production could be recorded (see Figure ‘Production and Sales’).Biogas is currently being produced at approximately thirty-five sites in Hungary, one part of which is based on agricultural by-products (animal manure, plant products and by-products: silage maize, sweet sorghum, etc.), while the other segment is represented by biogas plants connected to communal waste water treatment facilities. About thirty additional plants are currently under planning or construction (see Tables ‘Plants in Operation’ and ‘Agricultural Biogas’).In 2010, in Zalaegerszeg - a city in the west of Hungary - the country’s first biomethane project was implemented


Renewable energy sources represented 4.9% (54.8PJ) of Hungary’s primary energy consumption in 2007, and according to estimates, in 2008 this share increased to 5.3%. In 2007, 65% of the renewable energy sources were used for heat generation, 33% for electric power production and the rest for the production of biofuels. Natural gas is the most important source in Hungary’s primary energy mix, and ranks before oil and nuclear power. The country has inland gas resources which cover about 20 % of the gas demand, however, these resources are in decline. Hungary is still highly dependent on imports from Russia (about 80 %). The gas is fed into the Hungarian high-pressure pipeline system which is owned and operated by TSO FGSZ Ltd. The system is widely spread out to about 5,700 km in length. More than 90 % of the settlements have access to natural gas.Hungary is among those EU countries that have a considerable biogas

Name P r i c e / N e t costsHUF/t

Biogas YieldNm3/t

Specific CostsHUF/Nm3

S p e c i f i c F e e d s t o c k Demand[t/m3]

Silage 6300 200 42 0,7Manure 1000 70 14 1,3Liquid Manure 0 26 38 1,05

Table ‚Feedstock Costs‘: Characteristics of the feedstocks in 2011 (without transport costs)

Source: J. Popp, N. Potori 2011

Animal By-product

0 400 0 0,6

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by membrane technology in the future. The biomethane produced is intended to feed into the low pressure grid.More biomethane production plants are expected to also appear in Hungary in the near future, and will enable the use of purified biogas equivalent to natural gas for transport purposes by feeding it into the gas pipe network. Biogas production is expected to double by 2020. With regard to biogas, increasing attention must be paid to dual-purpose use and the increase of added value in the following years.Besides green electricity generated through biogas production, green heat generated for direct use will also have priority. This could directly result in an improvement of cost-effectiveness,

Figure ‚Production and Sales‘: Production and sales of biogas plants between 2008-2010 (GWh)

Source: Hungarian Energy Office

Plants MWBiogas 36,95Municipal waste 6,49Pyrolisis 1,66Sewage 10,19Total 55,28

Figure ‚Plants in Operation‘: Biogas Plants in Operation in Hungary (2011)

Source: Ministry of National Development

at the municipal waste water treatment plant. Raw sewage gas is upgraded by water scrubber technology to natural gas quality and utilised as vehicular fuel. Another biomethane plant is under development in Kaposvar. Biogas is to be sourced from organic residues of the local sugar factory and upgraded

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related industries could be involved, and in addition to the use of by-products and the disposal of waste, new jobs could be created.In the field of transportation, the role of biogas is expected to increase in the future, primarily in those rural towns where biogas can be obtained (refuelled) from within a reasonable distance. The simplification of the authorisation of CNG filling stations in a system similar to LPG could be a very important aspect of the development of the domestic biogas industry. Useful links:• Hungarian Central Statistical Office• Ministry of National Development

3.4.7. Regulations

In Hungary, there is no uniform procedure for licensing the construction of the biogas plants, due to the fact that obtaining permits is a complicated process with several threads running concurrently. The timescale for projecting and licensing biogas plants is twice or even three times as long as that of the construction itself. The Governmental Decree No 19/2009 on the provisions of the Hungarian Gas Law (Act XL 2008) assures the non-discriminatory access to the gas grid. Biomethane can be fed into the grid as long as its quality meets the requirements of the national standard MSZ 1648:2000. This standard focuses on natural gas and does not regulate the usage of different biogas feedstock

Biogas Plant1 Nyírbátor 26002 Kenderes 10523 Pálhalma 17374 Kaposvár Direct

biogas use

5 Klárafalva 5266 Kecskemét 3307 Csengersima 5378 Dömsöd 16009 Kapuvár 52610 Kaposszekcső 83611 Bonyhád 62512 Nyírtelek 62513 Dombrád 62514 Biharnagybajom 62515 Bugyi 49916 Bicsérd 63717 Vámosoroszi 62518 Pusztahencse 120019 Jászapáti 63720 63721 Hajdúszovát 62522 Ostffyasszonyfa 62523 Kemenesmagasi 62524 Gyulavár 50025 Ikrény 62526 Szeged 12027 Szarvas 470028 Nagyszentjános 526

Source: Hungarian Biogas Association

Figure ‚Agricultural Biogas‘: Opera-ting bioenergy productioning agri-cultural biogas plants in Hungary

http://www.ksh.hu/stadat

http://www.nfm.gov.hu

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Biogas is currently being produced at approximately thirty-five sites in Hungary. In Hungary the support of biogas plants in the society is positive, because these usually solve critical environmental problems. Until now, consumer resistance has not been observed, because the plants have been implemented in sufficient distance from villages. The required distance by the Environmental Authority is at least 500 m. The affected population should always be involved in the licensing process of the biogas plants. Consumer forums should present the investment and operation of the plant. In case of conflicting interest legal redress can be appealed. Part of the authorization process is to ensure the approval of the social ‘Green organizations’ as well.In Hungary the strongest organisation in the sector is the Hungarian Biogas Association which is promoting the benefits of biogas plants via a variety of media - conferences, brochures, etc. – and is campaigning the construction of plants. Governmental and political decision-makers are consulting with the HBA as well. In coordination with the biogas plant constructions various clusters and market players give technical assistance. Among the higher education institutions mostly the agricultural sciences are taking part in the spreading of technologies and in the creation of laboratory background and by providing services.

or any method for adjusting the heating value. However the standard requires e. g. a strict limit for the oxygen content of 0.2 % by volume and a continuous online measurement of the gas quality.Useful links:• Ministry of National Development• Hungarian Energy Office• Energy Centre Non-profit Ltd.


The vast majority of the Hungarian biogas projects have been granted aid through a measure under the New Hungary Rural Development Plan by the Minister for Agriculture and Rural Development entitled ‘Modernisation of animal holdings under Decree No 27/2007 (IV. 17.) on aid granted for the modernisation of animal holdings from the European Agricultural Fund for Rural Development.Useful Links:Institutions with budgets for project/R&D support:• NIH, National Innovation Office • MAG Zrt Hungarian Economic Deve-lopment Center • MFB - Hungarian Development Bank• Energiaközpont

http://www.nfm.gov.hu

http://www.eh.gov.hu

http://www.energiakozpont.hu

http://www.nih.gov.hu

http://magzrt.hu/

http://magzrt.hu/

https://www.mfb.hu

http://www.energiakozpont.hu/

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Useful links:Associations:• MBE - Hungarian Biogas Association • BITESZ - Union of Biobass Product Line • MGKKE - Hungarian Gas Transport Cluster Association• MMESZ - Hungarian Association of Re-newable Energy Sources

Institutions:• Ministry of National Development, Mi-nister of State for Climate Change and Energy• Ministry of Rural Development• Hungarian Institute of Agricultural En-gineering

http://www.biogas.hu

http://www.bitesz.hu/

http://www.mgkke.hu

http://www.mgkke.hu

http://www.mmesz.hu/

http://www.mmesz.hu/

http://www.kormany.hu/hu/nemzeti-fejlesztesi-miniszterium/klima-es-energiaugyi-allamtitkarsag



http://www.vm.gov.hu

http://www.gmgi.hu

http://www.gmgi.hu

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3.5. denMark


Danish Bioenergy Association

(DI Bioenergi)

Kristine van het Erve Grunnet

H.C. Andersens Boulevard

DK-1787 Copenhagen V

Tel.: +45 3377 3369


Country Score Central Denmark - Biogas (November 2011)

In the general scoring for sec-tor, Denmark - Central is ra-ted place 35 out of total 81. The underlying cate-gories that influ-ence this result are displayed in the bar chart.

Country Score Central Denmark - Biomethane (November 2011)In the general scoring for sec-tor, Denmark - Central is rated place 31 out of total 81. The underlying ca-tegories that influence this result are dis-played in the bar chart.


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of upstream pipelines in the Danish part of the North Sea and onshore transmission pipelines. The transmission pipelines go north-south (Aalborg-Ellund) and west-east (Nybro-Dragør). The natural gas transmission system also includes a gas treatment plant (Nybro) and two underground gas storage facilities (Stenlille and Lille Torup). The Danish gas transmission grid is connected to the German gas transmission grid at Ellund on the Danish/German border and to the Swedish gas system at Dragør. Sweden is solely supplied with gas via the Danish gas system.The electricity transmission system in Denmark is separated both operationally and geographically into two parts, the west (Jutland and Funen) and the east (Zealand). In 2005, Energinet.dk was established, as a single state-owned transmission system operator, by merging two system operators: Elkraft in western Denmark and Eltra in eastern Denmark. The geographical separation ended in 2010 when the Great Belt Power Link connecting western and eastern areas with 400 kV direct current (DC) cables was commissioned. Despite separation within Denmark, the eastern area was already connected with Sweden and the western area was connected with Norway and Sweden. Therefore, both areas had been able to trade electricity through the Nordic market even without the Great Belt Power Link. The 6,300 km-long Danish transmission system consists of 400 kV and 150/132 kV lines. Energinet.dk is the owner of the 400 kV facilities, as well as part of the 132

3.5.2. Basic Data1

The Kingdom of Denmark (excluding Greenland and the Faroe Islands) has a mainland area of 43,098 km² and shares a small land border with Germany to the south. Its closest Nordic neighbour is Sweden to which it is connected by bridge. The bulk of Denmark is the peninsula Jutland and the rest of the country consists of 406 islands, of which 78 are habited, and the largest two islands are Zealand and Funen. Denmark also exercises sovereignty over the Faroe Islands in the North Atlantic and Greenland, which is part of the North American continent, both of which enjoy autonomous self-.rule. The topography of Denmark is relatively flat with few hills, its highest point being no more than 173 metres above sea level. Of the total surface area, 62%. is used for agriculture, which offers a great theoretical potential for agricultural feedstock supply for the biogas sectorThe population of Denmark was 5.5 million in 2010, with 126 inhabitants per km², almost half of whom live on the islands of Zealand and Funen. Almost 87% of the population lives in urban settlements. Denmark has one transmission system for gas, owned and operated by Energinet.dk, on behalf of the Danish State. Transmission tariffs are based on an entry-exit model and the same tariffs apply to all entry and exit points. The natural gas transmission system consists

1 Energy Policies of IEA countries, Denmark 2011 review

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The energy agreement of 2008 stated that biogas will primarily replace natural gas and is considered to be both an important contribution to the security of supply and is furthermore considered by society to be an economically attractive solution. At first biogas will replace natural gas in the decentralized CHPs and if the cost of converting biogas to natural gas standard can be done at a compatible price, biogas will in time be distributed in the gas grid as well. The biogas is today mainly used in decentralized CHPs, where it replaces a part of the natural gas consumption.The support scheme is described in the renewable energy law in Denmark, called ‘Promotion of Renewable Energy Act’ (Bekendtgørelse af lov om fremme af vedvarende energi) Useful links:Governmental institutions:• Danish Energy Agency• Danish ministery of Climate, Energy and buildingsAssociations• Danish Bioenergy Association• Danish Biogas Association (only Da-nish)• Danish Agriculture and Food Council

kV facilities, the Great Belt Power Link and interconnection lines with Norway, Sweden and Germany. Most of the 150/132 kV transmission facilities are owned by nine regional grid companies.


The Danish government aims at reaching a share of renewable energy sources (RES) in the final energy consumption of approx. 30%, and 50% of the energy consumption in the electricity sector is to come from wind by 2020. The RES-share in Denmark’s final energy consumption shall be rising to 100% in 2050. Due to its characteristics as a storable feedstock and a flexible energy supply, bioenergy will play a key role in this strategy. For biogas the aim is to use 50% of the manure from livestock to produce biogas. To facilitate this development a task force is to be established by the Danish government. This task force is to support the specific projects and make recommendations for additional initiatives, if in 2012-13 it will be assessed by the Danish government that the expansion process is too slow.The political will to develop the biogas sector can be seen as favourable, as the benefits of biogas are recognized and biogas is seen as a key technology to increase the market share of RES in general. Biogas can provide both base load and peak load electricity, which makes it a valuable option to balance fluctuating RES energies like wind power and photovoltaic.

http://www.ens.dk

http://www.kemin.dk

http://www.kemin.dk

http://www.energi.di.dk

http://www.biogasbranchen.dk

http://www.agricultureandfood.dk

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energy output. The untapped potential of manure from livestock is 22 PJ and is the second most untapped potential (see Table ‘Energy Potential’). The largest potential of 42 PJ comes from energy crops.4 The amount of land that will be used to grow energy crops depends on a political decision which should encounter both, the aspect of food supply and the protection of the environment. Even though today only a few plants process energy crops such as corn and grass silage, a future shortage of usable waste, which could occur when the potential is fully exhausted, will probably result in an increasing use of livestock manure and energy crops for biogas production.The Danish agricultural sector’s contri-bution to bioenergy production is already relatively high as 12% of Danish energy

4 Biogaspotentiale i danske kommuner, Energinet.dk

3.5.4. Feedstock2

Feedstock potential for biogas in Denmark is high in terms of manure from livestock and energy crops. Today the dominating energy carrier for biogas however is manure, waste from industry and sludge. The biogas process has already been used over the past 100 years to stabilize sludge from the wastewater treatment plants.Danish agriculture produces approxi-mately 35 million tons of manure from livestock and 1.6 million tons of this is used for biogas. This corresponds to approximately 4-5% of all manure in Denmark and when converted into biogas gives approximately 1 PJ3 of

2 PÖYRY Management Consulting, evaluation of op-tions to enhance the nordic vooperation in the field of solid biomass for energy purposes3 Biogasanlæg bidrager til et bæredygtigt landbrug, Videncentret for Landbrug

Agriculture sector Exploited Unexploited Livestock manure 1 22Energy crops - 42Meadow grass - 3Cover crops - 14Total 1 81Other sources Exploited UnexploitedWastewater sludge 0.9 1-3Industrial waste 1 <1Meat and bone meal 0.03 0.5Garden and park waste 0 1Landfill gas 0.3 -Total 2.2 2-5

Table ‚Energy Potential‘: The energy potential for biogas (in PJ)

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the western part of Denmark due to a high agricultural rotation. Moreover the largest potential for biogas from plant breeding is to be found in Lolland, which is an island situated in south east of Denmark. The potential from harvesting of meadow grass for biogas is also situated in areas with a high rotation in the agriculture such as Jutland, although a small potential can be found in the metropolitan area as well.7

Useful links:Facts and figures• Danish Energy Agency• Statistics Denmark• Energinet.dkAssociations:• Danish Bioenergy Association• Danish Biogas Association (only Da-nish)• Danish Agriculture and Food Council

7 Biogaspotentiale i danske kommuner, Energinet.dk

consumption is covered by the use of residual products such as straw, wood chips and slurry. This is, in particular, a result of the use of these residual products in the CHP sector.5

In Denmark, however, the potential for producing bioenergy from biomass is greater, without any particularly negative impact on the production of animal feed and food. Estimates show that it is possible to raise Danish agricultural production of biomass for bioenergy four to five times through greater exploitation of straw for CHP plants, slurry for biogas, animal fat for biodiesel and by using perennial energy crops as well as grass from low-lying areas. It will, however, be necessary to include part of the former set-aside land in the production of perennial energy crops. It is a matter of technical potential, which may not necessarily be realised within the economic framework that applies today. The previous Danish settlement price for electricity from biogas plants constitutes a barrier, but has now been improved. Furthermore, it is uncertain whether farmers will consider the profit from utilizing low-lying areas large enough to harvest this biomass.6

The biogas potential from livestock manure is highest in regions in the southern, western and northern part of Denmark as seen in the Figure ‘Livestock’. The potential for energy crops and cover crops are mainly in Jutland in

5 Energy Policies of IEA countries, Denmark 2011 review6 Ministry of food, Agriculture and Fisheries, Report on Biomass

http://www.ens.dk

http://www.dst.dk

http://www.energinet.dk

http://www.energi.di.dk

http://www.biogasbranchen.dk

http://www.agricultureandfood.dk

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and in the Danish energy agreement of March 2012 the support scheme for the use of biogas has been enhanced by giving a higher price supplement, equalizing the price supplement for biogas used in the gas grid and CHP and introducing a price supplement to biogas used in transport and processes. Furthermore the start-up aid for new biogas projects has been increased from 20% to 30% of the investment costs. The remaining funds will be provided by a 60% municipal-guaranteed loan and 10% own financing. In addition biogas used in heat production in a CHP plant is exempted from energy tax. In the new Danish energy agreement of March 2012 a more ambitious plan


In Denmark the RES-E production is supported by feed in tariff premiums that are paid on top of the market price but are mostly capped at a maximum amount of market price plus premium. The instruments are prepared and managed by the Danish Energy Agency.8

The development in the biogas sector has so far been unsatisfying and the lack of progress in the sector can be traced back to insufficient economic incentives for the biogas producers and difficulties concerning the location of planned biogas plants. The government has introduced a task force to help finding suitable locations for biogas plants, 8 www.ens.dk

Figure ‚Livestock‘: Livestock combination by region (Farms, All Livestock Farms (incl. other livestock than cattle and pigs), 2011

Source: Statistics Denmark

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agreement a security of supply fee on space heating is to be introduced to cover government funding for biogas, industrial CHP, energy savings packages in privately owned rental properties, renewable energy in businesses, as well as the government’s loss of taxes due to lower consumption of fossil fuels.The energy tax system is differentiated between space heating (in businesses and households) and energy used in production processes. The energy taxes are balanced according to the energy content of the different fuels.In January 2008, the CO2 tax levied on VAT-registered enterprises was 20.27 €/per ton (150 DKK/ ton), an increase of 8.11 €/ ton (60 DKK/ ton). In addition to the carbon tax, a wide variety of other taxes are applied to energy consumption and use with the exception of fuels for electricity generation.9

The amount and transferability of the dry weight in the reactor tank is of utmost importance for the achievement of the biogas production. The dry weight content of manure is notoriously too small to produce enough biogas slurry to make the production profitable, at least with the existing plant sizes. As a rule of thumb larger plant sizes obtain a more profitable operation of a dry weight biomass, since treatment costs per ton is diminishing by the increasing size of the installations.10

The supply of organic waste from a variety of sources is introduced in order 9 Energy Policies of IEA countries, Denmark 2011 review10 Kogebog for etablering af biogasanlæg, INBIOM

for biogas expansion was implemented. The agreement includes the following elements:• the current funding of biogas for CHP is to be increased to the total of 15.54 €/GJ (115 DKK./GJ) in 2012. The support is divided into the following subcategories• The existing support of 10.68 €/GJ (79 DKK. / GJ) for biogas used in cogenera-tion plants will further prevail as a basic subsidy. • Biogas used in the natural gas grid is equalized with biogas used in CHP, so that biogas supplied to the gas grid achieves a basic subsidy of 10.68 €/GJ (79 DKK. / GJ) as well. • A new basic subsidy for biogas used in company processes and transport is introduced and is giving a net of 5.27 €/GJ (39 DKK. / GJ) • A subsidy of 3.51 €/GJ (26 DKK. / GJ) for all uses of biogas is introduced. The subsidy will be phased out by the incre-asing natural gas prices. • capital installation subsidies are to be increased from 20% to 30%, • a task force is to be established. This task force is to support the specific pro-jects and make recommendations for additional initiatives, if, the assessment in 2012-13 reveals that the expansion process is too slow.The support scheme for renewable electricity consumption is financed via the PSO (Public Service Obligation) scheme and thus by the consumer’s energy bills. With the new energy

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11.7 TWh mostly to Germany.In 2010, biogas contributed 4,278 TJ to the production of renewable energy, representing 3 %. of the total renewable energy production. The production is so far spread out to 20 large common biogas plants and 50-60 farms with biogas plants. The common biogas plants have the capacity to treat 100-600 tons of manure and other kinds of biomass per day and the biggest common biogas plant treats manure from 50-100 livestock herds in the area. Farms with biogas have capabilities within a range of 10-100 tons of manure per day. Future plants, for both common biogas plants and farms with biogas, will be larger because of the economic benefits.11 Furthermore there are 65 treatment plants in Denmark with digester and biogas production. A few industries have their own biogas production and there are about 30 large and small landfills, which abstract and utilize biogas as well.12 They treat approximately 400,000 tons of organic waste which primarily come from the food industry.13 The largest unexploited potential lies in manure-based biogas plants. About 30 CHP plants use biogas as fuel and some 147 local CHP plants – with a combined capacity of 80 MW – use biogas as a fuel.

11 Danish Energy Agency http://www.ens.dk/da-DK/UndergrundOgForsyning/VedvarendeEnergi/bioener-gi/Biogas/Documents/Biogas-notatpct.20tilpct.20Klimakommissionenpct.20majpct.202010.pdf12 Biogaspotentiale i danske kommuner, Energinet.dk13 Biogasanlæg bidrager til et bæredygtigt landbrug, Videncentret for Landbrug

to increase the gas production in the majority of current plants. There is a limited amount of suitable waste, which results in a high payment rate for the best waste. Some facilities have begun using corn silage, but the economic gains are debatable.


Total primary energy supply (TPES) in 2010 was 19.7 million tonnes of oil equivalent (Mtoe). Energy production amounted to 23.2 Mtoe, which was below 2009 levels and indicative of falling oil and natural gas production over the past six years. Denmark is a net exporter of oil and natural gas and can be expected to remain so at least until end-2018 for oil and 2020 for gas. Energy exports were 17.2 Mtoe in 2010 while imports were 13.8 Mtoe, making Denmark a net exporter of energy. The share of RES in TPES is with 20.7% relatively high, largely wind and biomass. In 2010, oil accounted for over half (54%) of Denmark’s indigenous energy compared to 64% in 2004 when domestic oil production peaked. The share of natural gas in total energy production was 31% in 2010 compared to 34% in 2008. In 2009, the remaining 15% of indigenous energy production came mainly from biomass (12%) and wind power (3%). Denmark generated 38.6 TWh of electricity in 2010, largely from coal (44%), natural gas (20%) and wind power (20%). In 2010, Denmark imported 10.6 TWh of electricity mostly from Norway and Sweden, and exported

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Investments in Danish markets are considered to be ‘safe’ from a country risk perspective, according to established rating agencies. Reliability and credit worthiness of the Danish economy is rated with best scores at Standard & Poor’s15 and Moody’s. In the COFACE country risk rating16 Denmark positions itself at the top of the list of countries, and the same is the case in the Corruption Perception Index rating the level of transparency.17 The ease of doing business is considered to be quite favourable in Denmark by IFC World Bank.18

When the Maastricht Treaty was con-cluded in 1992, Denmark obtained an ‘opt-out’ under which it did not need to enter the third stage of Economic and Monetary Union and therefore did not introduce the Euro. The Danish Krone has remained within the EMS and has been part of the new exchange-rate mechanism (ERM II) since the introduction of the euro. It may fluctuate within a 2.25% band on either side of the Euro.19 The average inflation rate in the period 2006 to 2010 was 2.1%.

15 Standard & Poor’s, http://www.standardand-poors.com/ratings/en/eu/16 COFACE, http://www.coface.com/CofacePor-tal/COM_en_EN/pages/home/risks_home/coun-try_risks/rating_table?geoarea-country=COUN_AREA_04&crating=&brating17 Corruption perceptions index 2011, http://cpi.transparency.org/cpi2011/results/18 IFC, Doing Business Index, http://www.doing-business.org/rankings19 http://europa.eu/legislation_summaries/econo-mic_and_monetary_affairs/institutional_and_econo-mic_framework/l25061_en.htm

The gas grid is able to receive biogas and the first commercial upgrade facility for biogas was established in 2012. The first biogas will run into the existing gas grid by the end of 2012.14 In time this development will give the producers of biogas a more flexible market on which they can distribute their production. By the end of 2013 an analysis of the future use of the gas infrastructure will be drawn up – the analysis will contain both the transition phase during which natural gas is still used and a future phase in which biogas and other renewable gas takes over. The Danish government has set aside 0.27 million € (2 million DKK) for this analysis.

3.5.7. Regulation

Today, most municipalities have not laid out specific areas for the construction of biogas plants in their local plans. In cases where farmers / biogas operators wish to establish a biogas plant in an open countryside and outside the generally designated industrial areas a municipal and a local plan have to be processed. This includes a mandatory VVM and an environmental approval process before construction can begin. The emission limits are regulated by the Environmental Protection Agency.

14 Energinet.dk

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and utilisation of energy, and its impact on climate change. Its principal function is to ensure the legal and political framework for reliable, affordable and clean supply of energy in Denmark. Energinet.dk, the transmission system operator, is an independent public enterprise owned by the Danish State represented by the Ministry of Climate, Energy and Building. It owns the natural gas transmission system and the 400 kV electricity transmission systems and is the co-owner of the electricity interconnections to Norway, Sweden and Germany. It is responsible for maintaining security of supply and ensuring the smooth operation of the market for electricity and gas. Energinet.dk was established in 2005 following a merger between Eltra, Elkraft System, Elkraft Transmission and Gastra.The Danish Energy Saving Trust is an independent body established in 2010 as a trust under the auspices of the Ministry of Climate, Energy and Building, replacing the Danish Electricity Saving Trust. The scope of the previous organisation’s work has been expanded from electricity savings to cover savings and more efficient use of all forms of energy in every sector other than transport.The Danish Energy Regulatory Authority (DERA) oversees the electricity, natural gas and district heating markets. DERA is an independent authority and its board members are appointed by the Minister of Climate and Energy. Its decisions can be appealed to the Danish Energy Board

Inflation is not expected to stay within the euro target area of just below 2% in 2011. For 2011 and 2012 inflation is expected lie around 2.6% and 1.8%.20

The easiness of getting a credit from banks is dependent on individual project designs as they assess reliability of chosen technology as well as feedstock supply security and price risks. The financing of investments in biogas plants is supported by a start-up aid of 30% of the investment for new biogas projects. The remaining funds can be provided by a 60% municipal-guaranteed loan and 10% own financing.


Key institutions:21

The Danish Ministry of Climate, Energy and Building (previously known as the Ministry of Climate and Energy), established in November 2007, was created as a part of the government’s increased efforts to promote a greener and more sustainable society. The ministry is responsible for national and international efforts to mitigate climate change, as well as for energy, national geological surveys in Denmark and Greenland, and for meteorology.The Danish Energy Agency (DEA) was established in 1976, and is an agency under the Ministry of Climate, Energy and Building. It is responsible for all tasks related to the production, transmission

20 http://www.euo.dk/nyheder/euidag/2011/maj/foraarsprognose2011/21 Energy Policies of IEA countries, Denmark 2011 review

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of Appeal.The independent Danish Commission on Climate Change Policy was established by government in 2007 and was charged with the task of identifying the long-term climate and energy policies needed to achieve independence from fossil fuels. The Climate Commission’s proceedings were attended by the Ministry of Climate, Energy and Building, the Ministry of Economic and Business Affairs, the Ministry of the Environment and the Ministry of Finance. The Commission published its findings in September 2010 and ceased activities in November 2011.

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3.6. sweden


Swedish Bioenergy Association

(Svebio)

Lena Dahlman

Torsgatan 12

SE-11123 Stockholm

Tel.: +46 8 441 70 80


Country Score Sweden Middle Norrland - Biogas (November 2011)In the general sco-ring for sector, Swe-den - Middle Norrland is rated place 54 out of total 81. The underly-ing categories that in-fluence this result are displayed in the bar chart.

Country Score Sweden Middle Norrland - Biomethane (November 2011)

In the general sco-ring for sector, Swe-den - Middle Norrland is rated place 51 out of total 81. The underly-ing categories that in-fluence this result are displayed in the bar chart.

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3.6.3. Energy policy

The Sweden aims at reaching a share of RES in the final energy consumption of 50% by 2020. Since in 2011 the share of renewable energy already summed up to 48.9%, the target set for 2020 cannot be seen as ambitious. The same holds true for the 2020 target with regards to the transport sector which has to include a 10 % share of RES. According to the estimations of the Swedish energy agency, these targets will already be reached in 2012. Until 2013, all biogas used for transportation is omitted from energy or carbon taxation; however, at this point no information regarding the incentive structure after the 31st of December 2013 is available. There are discussions to include biogas for transport in a future quota system, which would undermine the market completely. However, as such large investments have been executed in infrastructure and production units, it must be assumed that a future incentive structure will still protect the gas vehicle market. Due to the uncertainty in policy, the expansion rate for new biogas production sites is rather slow at the moment. With regards to biogas used for electricity generation or heating/cooling, there are no current discussions on subjecting these volumes to an energy or carbon tax. Whilst green electricity from biogas is supported, fossil energy fuels are taxed heavily. Natural gas is not taxed to the same extent as coal and oil since is it only subject to the carbon tax but not the energy tax.There have been discussions to additionally

3.6.2. Basic Data

With a surface of 450,295 km², Sweden is the third largest country in the EU; however, with a total population of about 9.4 million it is only the fourteenth most populated one. The population density is on average 21 inhabitants per km² with the population being mostly concentrated in the southern half of the country. About 85% of the population lives in urban areas. Sweden consists of eight NUTS2 regions. Sweden’s capital city is Stockholm, which is also the largest city. The country is characterised by its long and narrow shape with the main part of the population spread over the middle and southern parts of the country. Hence, agricultural practices and available feedstock differ amongst regions. Also energy needs, energy dependence, and/or limitations of the transportation of goods and people differ significantly amongst the regions.Useful links:Facts and Figures:• Official Swedish Statistics• Swedish gas vehicle info page• Biogas portal• Swedish Energy Agency• Swedish Board of Agriculture• Swedish Forest Agency• Green electricity trading market• Energikunskap, Energy knowledge pu-blished by the Swedish energy agency

http://www.scb.se/

http://www.gasbilen.se/

http://www.biogasportalen.se/

http://www.energimyndigheten.se

http://www.sjv.se/

http://www.skogsstyrelsen.se

http://www.nordpoolspot.com

http://www.energikunskap.se/

http://www.energikunskap.se/

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• Biogas Mitt• Biofuel region

3.6.4. Feedstock

Due to the fact that merely 6.5% of the total surface area is used for agriculture, Sweden’s agricultural feedstock supply for the biogas sector is relatively small in relation to its total size. The total surface area covered by forest is 63% (or 48% productive forest lands) making forest based fuels the biggest biomass source for bioenergy. However, there is still a large unused potential of available feedstock for the increased production of biogas from sources such as agriculture, forestry, households, restaurants, and the industrial processing industry. Approximations of the feedstock potential for biogas in Sweden however vary greatly. The biogas strategy issued by the Swedish energy agency in 20101 has been criticized by the biogas associations and stakeholders in Sweden for being too conservative in their estimations. The regional Biogas organisations: Biogas Syd (south), www.biogassyd.se; Biogas Sydost (South east), www.biogassydost.se; Biogas Väst (west), www.biogasvast.se; Biogas Öst (East), www.biogasost.se; Biogas Mitt (Middle), www.biogasmitt.se; Biofuel region (in the North), www.biofuelregion.se have all conducted local estimates that show higher potentials.2

1 Förslag till en sektorsövergripande biogasstrategi – slutrapport ISSN 1403-18922 Contact each association directly as the regulare-ly update their assessments

introduce a carbon reduction support for biogas installations; however, this has yet to be realized. As Sweden has already met the 2020 target, the political will to introduce new, costly support schemes is rather low. Nevertheless, additional policies and incentive structure need to be put in place in order for Sweden to reach its long-term ambitions: in 2050 Sweden shall have no net CO2 emissions and in 2030, the vehicle fleet shall be independent of fossil energy. The government has started to discuss how to meet these targets but there will be no clear policy in place before 2014.Useful Links: Institutions:• Swedish Energy Agency• Swedish government• Swedish Board of Agriculture• The Swedish Enforcement Administra-tion• Svenska Kraftnät (Swedish national grid) • Swedish Transport Agency, Trans-portsstyrelsenAssociations:• Swedish Farmers Union• Swedish Waste Management• Swedish Energy gas Association• Biogas Syd• Biogas Sydost• Biogas Väst• Biogas Öst

http://www.biogasmitt.se/

http://www.biofuelregion.se/

http://www.biogassyd.se

http://www.biogassydost.se

http://www.biogassydost.se

http://www.biogasvast.se

http://www.biogasvast.se

http://www.biogasost.se

http://www.biogasmitt.se

http://www.biogasmitt.se

http://www.biofuelregion.se



http://regeringen.se/

http://www.sjv.se/

http://www.skatteverket.se/


http://www.svk.se

http://www.svk.se

http://www.transportstyrelsen.se


http://www.lrf.se

http://www.avfallsverige.se

http://www.energigas.se/

http://www.biogassyd.se/

http://www.biogassydost.se/

http://www.biogasvast.se/

http://www.biogasost.se/

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Associations:• Swedish Farmers Union• Swedish Waste Management• Swedish Energy gas Association• Biogas Syd• Biogas Sydost• Biogas Väst• Biogas Öst• Biogas Mitt• Biofuel region


Biogas production in Sweden is not price-competitive relative to natural gas, as natural gas is exempted from energy tax. However, due to the large public and political support of the biogas for transportation sector, additional support incentives for biogas are being discussed. The vehicle gas sold in Sweden is a mix of biogas and natural gas (30-50 % biogas content, national average 2011: 60 % biogas 40 % fossil natural gas). The fact that natural gas is exempted from the energy tax creates a stable vehicle gas price on the one hand but also puts a price pressure on biogas on the other hand. Generally, vehicle gas is between 72-80 % cheaper than gasoline, but the prices vary regionally depending on the local production prices of biogas. As most of the electricity and heat from biogas is used locally and only rarely sold on the open markets, these market volumes are not as price sensitive.

The main discrepancies of the estimates are differences in the assessments of production costs, which the Swedish energy agency has estimated more conservatively. As Sweden is stretched very widely on a longitudinal level, the feedstock availability differs between the different NUTS regions. The highest number of large-scale farms as well as the highest density of farms can be found in the most southern regions of the country, followed by the ones located in the middle. Despite the fact that there are very few farms that produce enough manure to operate a biogas plant profitably in the north of Sweden, one of the largest biogas plants can be found within Domsjö Fabrikerna AB; Örnsköldsvik where the feedstock is reject water from the textile pulp production. Swedish agriculture is relatively small-scale compared to central Europe which makes feedstock more spread out over the landscape. The major feedstocks are organic house hold waste, manure, sewage, industrial organic waste, and remnant gas from closed landfills. Agricultural products and energy crops are very rarely used. Useful Links:Facts and Figures:• Offical Swedish Statistics• Swedish gas vehicle info page• Biogas portal• Swedish Energy Agency• Swedish Board of Agriculture• EUROSTAT

http://www.lrf.se









http://www.scb.se/




http://www.sjv.se/

http://ec.europa.eu

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one applies for already commercially available techniques in Sweden and the other one for new technologies.Farmers and companies in rural areas of southern Sweden can get up to 30 % of their investments cost refunded, whilst for installations in the northern part of Sweden this support can amount up to 50 %. However, the total investment aid cannot be larger than 1.8 million SEK distributed over a three year period, and the biogas production has to be based on manure. These restrictions favour smaller installations, since larger cooperations, consisting of several companies, risk hitting the 1.8 million sealing.Useful links:Facts and figures:• Swedish Energy Agency• Swedish Board of Agriculture• Official Swedish Statistics• Swedish gas vehicle info page• Biogas portalSupport schemes:• Swedish Energy Agency• Swedish Board of Agriculture• The Swedish Enforcement Administra-tion• Svenska Kraftnät (Swedish national grid) • Swedish Transport Agency, Trans-portsstyrelsen

Despite the fact that biogas for vehicles is not taxed at all, it remains difficult to create viable business margins due to the high infrastructural investment costs related to upgrading and fuelling stations, as well as the relatively low price of natural gas. Electricity from biogas as well as green electricity from other RES are eligible for green electrical certificates.3 Whereas producers of renewable electricity are issued green electricity certificates that they can then choose to sell on the open market, other electricity providers or buyers have to buy a certain amount of green electricity certificates. The price for the certificates is, therefore, determined by the market. So far, the green certificates have added 50 – 100 % to the actual market price. As the prices of these green electricity certificates are set by the market instead of being fixed by legislation, they might fluctuate over time.4 However, the prices tend to be relatively stable over longer periods and predicted values of a green certificate are regularly published on Nordpoolspot.com. Currently, incentives regarding biogas consist of a reduced vehicle tax for a period of five years for new cars, and a 20 % reduced taxable value of fringe benefits. The reduced fringe tax is only in place until 2013. Investments in new biogas facilities are incentivised by two investment support systems, whereas 3 Law on green electricity certificates (2011:1200), in Swedish - http://www.notisum.se/rnp/sls/lag/20111200.htm4 Officaltradingsiteforgreenelectricitycertificateshttp://www.nordpoolspot.com/


http://www.sjv.se/

http://www.scb.se/




http://www.sjv.se/



http://www.svk.se

http://www.svk.se



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3.6.6. Market Envionment

Bioenergy is the country’s largest energy source and around 140 TWh thereof are used annually. Bioenergy surpassed oil as the major energy source in 2009, and bioenergy usage is bigger than that of hydro and nuclear power combined. The majority is used by the industry, followed by domestic small-scale heating and district heating systems. Sweden has managed to increase its use of bioenergy by 100 TWh (almost 10 mtoe) during the last 40 years. The transition has accelerated over time, and during the last decade the growth of the sector has been 3 – 4 TWh per year (see Figure ‘Final Energy Use’.Traditionally the majority of biogas plants have been internal production units in sewage cleaning facilities or small-scale farm installations designed for personal use. The pioneers in biogas production have been municipalities that have started to produce biogas from household waste as a climate protection initiative. In the beginning, biogas has been used in public transportation and waste handling, but, due to the increase in public interest there has been a rapid increase in investments in upgrading stations for agricultural and sewage biogas installations. This has been done in order to meet the high public demand for vehicle gas and to secure the supply in bigger cities.In 2010 229 biogas production units were installed in Sweden. Of these, 135 were sewage plants, 5 industrial plants, 18 combined fermentation plants

Associations:• Swedish Farmers Union• Swedish Waste Management• Swedish Energy gas Association• Biogas Syd• Biogas Sydost• Biogas Väst• Biogas Öst• Biogas Mitt• Biofuel region

Figure ‘Final Energy Use’: Bioenergy is the leading energy source in Sweden to-day. Final energy use by source 2011.

Source: Svebio based on statistics from Swedish Energy Authority

http://www.lrf.se









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Principle has been inserted in the Swedish tax regulation. Through this Principle, biogas that is injected in the market or grid in one region can be exchanged for the natural gas volume that would have been sold somewhere in the same grid. Hence, this principle facilitates the spread of biogas to regions that do not produce enough biogas to meet their market demand. Sweden’s infrastructure for producing, disseminating, and utilizing biogas however cannot be considered as optimal. There are only two natural gas grids networks: one in the county of Västra Götalands län close to Gothenburg, and one in Skåne län close to Malmö and Helsingborg. The relative amount/volume of biogas distributed in these natural gas grids is still very low. All other biogas installations are off-grid, and are most commonly used in sewage treatment plants, municipal waste plants or agricultural installations. Almost all biogas plants in Sweden are based on wet fermentation technologies. Only one plant, which is being constructed in 2012, will have a dry fermentation set up. Since the use of agricultural waste or dedicated energy feedstock is not common in Sweden, agricultural plants mostly utilize manure as the main feedstock.Due to the fact that traditionally all biogas produced has been used for the generation of electricity and heat, biogas developments in Sweden have started in sewage plants where the energy generated has been used within the water treatment process. Biogas

(organic waste and manure) owned by municipalities, 57 collection sites for remnant gas from closed landfills, and 14 farm instalments. The largest plants are made up of the industrial and sewage plants, whilst landfill and farm instalments constitute the smaller plants. The largest biogas production can be found in the large cities, indicating the large dependence on organic waste and sewage plants.Of these 229 plants mentioned above, only around 40 have the capacity to upgrade biogas into vehicle gas, and only in seven cities upgraded gas can be inserted into the natural gas grid. What makes the Swedish biogas market unique is the great use of gas vehicles. There are around 33 000 gas vehicles in Sweden but only around 133 fuelling stations. Around 96 % of these fuelling stations are located south of Stockholm, whereas up in the northern part of Sweden there are only 5 fuelling stations for vehicle gas (Gävle, Sundsvall, Skellefteå, Boden, and Östersund). Due to the tax exemption of natural gas from the energy tax, it is difficult for biogas to compete with natural gas. However, the biogas production in Sweden is to some extent subsidized by natural gas, as the market demands that the mix of vehicle gas is to be mostly made up of biogas. Since natural gas cannot become the major vehicle gas fuel, a low natural gas prices tend to keep vehicle gas prices down to some extent. To simplify biogas injection into natural gas grids, the so-called Green Gas

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3.6.7. Regulation

The approval of biogas and biomethane plants with an installed electric capacity of up to 500 kW by authorities takes approximately 12 months on average. For larger biogas plants with installed electric capacity bigger than 500kW the approval takes about 20 months. Of course approval periods vary from authority to authority, depending on their workload, skilled personnel, and local conditions. With regards to the planning and construction of a biogas plant, local and regional authorities are generally in favour of such an endeavour. Neighbours, however, are often worried regarding odour and pest control. It is therefore important to inform stakeholders in due time of the planning process.There is no specific regulation for biogas instalments in the Swedish environmental law,5 this means that biogas operations are bound to the same odour, noise and emission thresholds as all other plants. Threshold levels for emissions are only relevant for plants that burn biogas to produce electricity and/or heat. Emission thresholds and regulations differ according to the size of the plant and the feedstock that it uses. The larger the installation, the stricter the environmental demands. The Swedish Environmental authority provides local and regional authorities with recommendations of how to set environmental permit thresholds. Biogas specific regulations can be found with regards to the handling of feedstock 5 Swedish environmental law http://www.notisum.se/rnp/sls/lag/19980808.HTM

generation from landfills have also been relatively common since the beginning of 2000. However, following the boom of biogas on the transport market, a larger part of almost 50% of all biogas produced in Sweden is being upgraded to vehicle fuels. As the market for biogas for transport is one of the fastest growing renewable energy markets in Sweden, the relative amount of biogas being upgraded to vehicle gas is expected to continuously grow.Useful links:Facts and Figures:• Swedish Energy Agency• Swedish Board of Agriculture• Official Swedish Statistics• Swedish gas vehicle info page• Biogas portalAssociations:• Swedish Farmers Union• Swedish Waste Management• Swedish Energy gas Association• Biogas Syd• Biogas Sydost• Biogas Väst• Biogas Öst• Biogas Mitt• Biofuel region


http://www.sjv.se/

http://www.scb.se/



http://www.lrf.se









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MW). For the largest plants (>50 MW) the demands of reporting are higher and more information is required to be given to the authorities. Useful Links:Regulations:Green electricity certificates:• Lag (2011:1200) om elcertifikat • Miljöbalken, Swedish environmental law Swedish energy taxation:• Lag (1994:1776) om skatt på energyInstitutions:• Swedish Energy Agency• Swedish Board of Agriculture• Swedish Environmental AgencyAssociations:• Swedish Farmers Union• Swedish Waste Management• Swedish Energy gas Association• Biogas Syd• Biogas Sydost• Biogas Väst• Biogas Öst• Biogas Mitt• Biofuel region

and the sanitation of digestate. In case the plant operates on water treatment sewage, the digestate cannot be spread, or mixed with other digestate without a specific permit. Similarly, if manure or other animal by-products originating from farms, other than the operator’s, are used as feed-stock, the digestate has to be sanitized according to the certification rules for digestate SPCR 120 (Swedish Certification Rules for Biofertilisers). If the digestate is spread on the farmers own land and not in areas used for food production the regulations are milder. The same regulations are found in instalments that handle household waste. Permitting authorities are often hesitant towards the spreading of digestate in farm areas. Generally, the digestate is spread on bioenergy production fields or used as filling of close landfills. In specific cases, digestate from biogas production can be certified as plant soil material; however, the regulations regarding bacterial growth and sanitation control are strict. All plants under an environmental permit in Sweden must verify that they meet their permits emission thresholds and other conditions. The proof of compliance with the permit has to be verified regularly and should be in place if/when there is an inspection from the permitting authority. Moreover, larger installations (>500 kW installed bioenergy capacity) are often required by their permitting authority to hand in an annual report. This environmental report is obligatory for larger plants (> total installed bioenergy capacity 20

http://www.notisum.se/rnp/sls/lag/20111200.htm





http://www.sjv.se/

http://www.naturvardsverket.se

http://www.lrf.se









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place. Farmers and companies in rural areas of southern Sweden can get up to 30 % of their investments cost refunded, while the investment support for installations in the northern part of Sweden can amount up to 50 %. Overall, the total investment aid cannot be larger than 1.8 million SEK spread over a three year period. Furthermore, the biogas production has to be based on manure. This scheme favours smaller installations, as larger cooperations stand a risk of hitting the 1.8 million sealing. Many projects are initiated by munici-palities or local bus companies. If this is the case, initiators often agree on a long-term procurement contract at a set price: These prices are often relatively high compared to the open market. This aids in the acquirement of loans from official banks. Useful links:Rating agencies:• Standard & Poor’s• Moody’s• COFACE• Corruption Perception Index• IFC Doing BusinessProject financing institutions:• Swedish Board of Agriculture• Swedish Energy Agency


According to established rating agencies, investments into Swedish markets are ‘safe’ from a country risk perspective. Reliability and credit worthiness of the Swedish economy is rated with best scores at Standard & Poor’s6 and Moody’s. Also in the COFACE country risk rating Sweden positions itself at the top of the score.7 The same holds true for the Corruption Perception Index measuring the level of transparency.8 Whilst the ease of doing business in Sweden is regarded as quite well by IFC World Bank, starting a business is ranked relatively low due to high administration and regulation requirements.9

Although Sweden is not a member of the Eurozone and therefore currency exchange risks have to be taken into consideration, the Swedish Krona and the Swedish state budget follow the ordinates of the EU leading to only minor currency fluctuations.The biggest problem with regards to financing biogas projects in Sweden is the uncertain policy and subsidy situation. Therefore, it might be difficult to attain financing for biogas projects even though there is direct support for the construction of biogas plants in

6 Standard & Poor’s, http://www.standardand-poors.com/ratings/en/eu/7 COFACE, http://www.coface.com/CofacePor-tal/COM_en_EN/pages/home/risks_home/coun-try_risks/rating_table?geoarea-country=COUN_AREA_04&crating=&brating8 Corruption perceptions index 2011, http://cpi.transparency.org/cpi2011/results/9 IFC, Doing Business Index, http://www.doing-business.org/rankings






http://www.sjv.se/


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Usually, there is a lot of know-how and experience available that can be used to avoid common mistakes within the planning process and to get support in the implementing process. As you can see below, there are several regional biogas interest organisations in Sweden, which provide support in the planning and implementation process, and offer in depth feedstock and market data.Useful links:Facts and Figures:• Offical Swedish Statistics• Swedish gas vehicle info page• Biogas portal• Swedish Energy Agency• Swedish Board of Agriculture• EUROSTATAssociations:• Biogas Syd• Biogas Sydost• Biogas Väst• Biogas Öst• Biogas Mitt• Biofuel regionInstitutions:• Swedish Energy Agency • Swedish Board of Agriculture


Generally, biogas is very popular amongst customers and politicians in Sweden, although in some areas the so-called NIMBY (not in my backyard) effect can hinder development. There are two well developed biogas markets – one for electricity and heat, and one for transportation – that both have logistics and market instruments in place. Biogas as an energy source is well known for its positive climatic effect and the opportunities it offers with regards to nutrient cycling. The readiness for uptake is considered to be good. There are no plants that have difficulties to sell their electricity or vehicle gas. Overall, there is a large biogas deficit all over Sweden compared to the market demand. Many politicians and regions therefore actively support biogas production plans. The biggest difficulty for most projects that are not initiated by authorities, is to operate on a profitable level, since biogas has to compete with natural gas prices. Another obstacle is the fact that the major market demand in Sweden is for vehicle gas, which increases the costs for small biogas plants to an extent that makes it impossible to finance the production for other purposes than local electricity and heat production. Many smaller plants are therefore building raw biogas grids connected to a central and jointly owned upgrading station.When planning to invest into a biogas plant, it is helpful to consult related associations and support agencies on how to proceed in the best way.

http://www.scb.se/




http://www.sjv.se/

http://ec.europa.eu








http://www.sjv.se/

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3.7. latvIa


Latvian Biomass Association

(LATbio)

Didzis Palejs

Jaunbumani, Dreilini

LV - 2130 Stopinu distirct

Tel.: +37 1 67522399


Country Score Latvia - Biogas (November 2011)In the general scoring for sec-tor, Latvia is ra-ted place 81 out of total 81. The underlying cate-gories that influ-ence this result are displayed in the bar chart.

Country Score Latvia - Biomethane (November 2011)

In the general scoring for sec-tor, Latvia is ra-ted place 81 out of total 81. The underlying cate-gories that influ-ence this result are displayed in the bar chart.


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and short days. Severe spells of winter weather with cold winds, extreme temperatures of around –30° and heavy snowfalls are common. Summers, starting in June and lasting until August, are usually warm and sunny with cool evenings and nights. Summers have average temperatures of around +19°C with extremes of +35°C. The weather in spring and autumn is fairly mild.There are three major ports in Latvia: Liepaja, Riga and Ventspils. Seven smaller ports are Skulte, Mersrags, Salacgriva, Pavilosta, Roja, Lielupe, and Engure; they are situated along the entire coastline of Latvia.1


Latvia is facing challenges to ensure sustainability, both in general development and in the energy sector. The energy section of Latvia’s Sustainable Development Strategy 2030 identifies several goals: renewable and safe energy, reduced dependency on energy imports, the use of local renewable sources, increased energy efficiency, and the formation of a joint regional energy market. Pursuant to Annex I (A) to Directive 2009/28/EC, Latvia’s target is to increase the use of RES from 32.6% of GFEC in 2005 to 40% in 2020. The total amount of RES to be utilized in 2020 is 1918 ktoe. Latvia’s RES targets by 2020 and beyond are the following:1) By 2020, the share of renewable energy 1 Latvia in brief. Latvian Institute. http://www.lat-via.eu/content/latvia-brief

3.7.2. Basic Data

Latvia, officially the Republic of Latvia, is located in the Baltic region of Northern Europe. It is bordered by Estonia in the north, by Lithuania in the south, by the Russian Federation in the east, by Belarus in the southeast and it has a maritime border with Sweden in the west. Latvia is a unitary parliamentary republic and it is divided into 118 administrative divisions of which 109 are municipalities and 9 are cities. The capital of Latvia is Riga; about one third of the country’s population lives there. The official language is Latvian and the currency is called Lats (Ls). There are five planning regions of Latvia: Kurzeme, Latgale, Riga, Vidzeme, and Zemgale. The planning regions of Latvia are not administrative territorial divisions.With 2,229,641 inhabitants and a territory of 64,559 km2 it is one of the least populated countries of the EU. There are 5 cities with more than 50,000 inhabitants.Latvia has a humid semi-continental climate characterized by warm summers, freezing winters and frequently high levels of humidity and precipitation. Latvia’s weather conditions are influenced by the proximity of the Baltic Sea.Latvia has four pronounced seasons of near-equal length. Winters, starting in mid-December and lasting until mid-March, have average temperatures of around – 6°C and they are characterized by a stable snow cover, bright sunshine,

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biomass, biogas, or biofuels to genera-te heat energy (draft Law on Renewable Energy).Current RES support instruments in Latvia:• National regulations for feed in tariffs from RES; • Particular regulations for electricity produced in CHP; • Financial support for the investment in biogas plants (Support Rural Deve-lopment Programme for agriculture type RES energy plants – up to 40% of in-vestment, National climate finance inst-rument – up to 50% of investment etc.);• NEFCO co-financing for investment in biogas plants;• Investment support for biomass tech-nology and construction;• Area payments; • Support for creation of new, innovati-ve techniques and technologies. The main biogas development problems are political-economical problems, the quota on renewable electricity power production (for biogas 6.9%-2009; 7.93%-2010 onwards), the project financing, the non-availability of support for biogas use as transport bio-fuel, the weak initiative from industry about anaerobic digestion (biogas production) as environmental technology for waste and sludge treatment.3

3 Biogas development status in Latvia. http://www.monusminek.ee/documents/LAT_biogas_status_Tar-tu_Motoshow_24.09.2010.pdf

in total gross final energy consumption has to be increased to at least 40% and further thereafter;2) By 2020, the share of renewable energy in the transport sector must reach at least 10% of gross final energy consumption for transport and it has to be increased gradually thereafter.2

The Law on Renewable Energy still has not been passed by the Saeima. The draft Law on Renewable Energy specifies measures and targets for renewable energy generation and the total final energy consumption that must be achieved by 2020, and provides for financial instruments to promote the use of renewable energy.The main measures in the National Renewable Energy action plan are:• The right to sell generated electrici-ty through the mandatory purchase of electricity in terms of quantity (Cabinet Regulation No 262 of 16.03.2010);• The right to receive guaranteed pay-ment for the electrical capacity installed in a power plant (Cabinet Regulation No 262 of 16.03.2010);• The technology transfer from fossil to RES;• The support for the implementation of energy generating installations using 2 Information Report Republic of Latvia NREAP for implementing Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC by 2020. http://www.ebb-eu.org/legis/ActionPlanDirecti-ve2009_28/national_renewable_energy_action_plan_latvia_en.pdf

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tential in Latvia is up to 1 200 million m3/year if all currently unused agricultu-ral land were used to grow energy crops for biogas production.According to the Latvian Biogas Production and Development Programme 2007-2011 the biogas production potential is estimated at approximately 174,000,000 m³/year.6

According to a report on the promotion of the use of energy from renewable sources published by the Ministry of Economics in 2011, Latvia produced the following volumes of biomass which can be used for biogas production in 2010,: perennial grass, hay green feed, silage – 2139.7 thousand tons, corn silage and green feed – 209.0 thousand tons. The volumes of energy crops (except forage, seed, losses and stocks) which may be used for energy production were as follows: cereals – 7.7 thousand tons, rape – 1.2 thousand tons.7

Latvia has a considerable potential for growing raw materials for biogas production. According to collected data, cattle manure produced in 2010 could be used to generate 32.2 million m3 of biogas, while available 6 Latvian biogas production and development pro-gramme 2007-2011. http://www.vidm.gov.lv/lat/darbibas_veidi/atjaunojamie_energoresursi/files/text/Darb_jomas/Biogazes_raz_un_izmant_att_pr_2007-2011.doc7 Information Report Republic of Latvia NREAP for implementing Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC by 2020. http://www.ebb-eu.org/legis/ActionPlanDirecti-ve2009_28/national_renewable_energy_action_plan_latvia_en.pdf

3.7.4. Feedstock

Most of the country is composed of fertile lowland plains and moderate hills. A typical Latvian landscape is a mosaic of vast forests alternating with fields, farmsteads, and pastures. Agricultural land occupies 39% of Latvia’s territory. Available farmland is 2,429,800 ha: 1,805,500 ha are cultivated and 624,300 ha are abandoned land available for agricultural expansion.4 Forests cover 44.1% of Latvia’s territory.5

Feedstock potential for biogas in Latvia is rather high. During the last three years there have been many studies and attempts to evaluate the biogas potential in Latvia. Biogas potential has been evaluated in terms of produced biogas amounts, as potentially produced energy as well as capacity that could be installed based on biogas production amounts.Potentially produced amounts of biogas are basically divided into three categories:• Biogas production potential in Latvia is 100 to 200 million m3/year when organic wastes and energy crops from existing agricultural practices are used;• Biogas production potential in Latvia is around 300 million m3/year when orga-nic wastes and specially grown energy crops are used;• The maximum biogas production po-4 Central Statistical Bureau. Statistics database 2011. http://www.csb.gov.lv.5 Nature and Environment in Latvia. Latvian Insti-tute. http://www.latvia.eu/content/nature-and-envi-ronment-latvia

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Ministers by the Regulations No 221 and No 262:• Cabinet Regulation No 262 adopted on the 16th of March 2010 – ‘Regulati-ons Regarding the Production of Electri-city Using RES and the Procedures for the Determination of the Price’ prescri-bes conditions for acquiring rights to sell electricity generated from RES within the framework of mandatory procure-ment. Support mechanisms are moni-tored by the Ministry of Economics of the Republic of Latvia which undertakes the control of generators and maintains the right to rescind decisions on rights to sell electricity in case the rules are being infringed within the framework of mandatory procurement.• Cabinet Regulation No 221 adopted on the 10th of March 2009 – ‘Regulati-ons Regarding Electricity Production and Price Determination Upon Production of Electricity in Cogeneration’ prescribes the criteria for cogeneration units to qualify for the right to sell the produced electricity within the framework of the mandatory procurement or to receive guaranteed payment for the electric ca-pacity installed in a cogeneration unit. 9

For example, the legally guaranteed price for the electricity for 150 kW biogas plants is 23 ct/kWh, and 20 cent/kWh for 400-600 kW plants respectively. The price depends on the capacity of the biogas plants – the higher the capacity, the lower the price. The guaranteed duration of the biogas supports scheme is 20 years. 9 Energy Policy. Ministry of Economics of Republic of Latvia. http://www.em.gov.lv

slaughterhouse residues were evaluated at 2.1 million m3. The use of biogas for energy production deals with complex agricultural production, processing and recycling of biodegradable products as well as derived products management, reducing soil, water and air pollution, that constitute potential risks to human health. According to data of the Central Statistical Bureau, 556 farms have at least 150 cattle in their stables, and another 60 farms have more than 500 cattle in their stables. The data furthermore counts 1644 farms that have at least 125 ha cropland, which could facilitate larger biogas CHP projects. Agricultural land occupies 39% of Latvia’s territory. Available farmland amounts to 2,429,800 ha. Currently, 1,805,500 ha are cultivated and 624,300 ha are abandoned and therefore available for agricultural expansion.8


The main legal support mechanism with regards to the feed-in of biogas is the Electricity Market Law. The Electricity Market Law ensures that a certain part of the total consumption of electricity by end users has to be electricity produced from RES. The Electricity Market Law also requires the public trader (JSC Latvenergo) to purchase a certain amount of electricity produced by RES. The price of such electricity and the amount to be purchased by the public trader are determined by the Cabinet of 8 Central Statistical Bureau. Statistics database 2011. http://www.csb.gov.lv.

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quota for biogas production with a total installed electrical capacity of almost 54 MW. 9 new biogas power plants were installed from 2008 to 2010. At the beginning of 2012 there were only 23 biogas power plants with electricity capacity of 28 MW in Latvia, 22 of them are cogeneration plants. Latvia does not produce biomethane at the moment. (see Figure ‘Plants Latvia’)Previous studies on the potential of biogas plants in Latvia show that almost all the big pig and poultry farms are potential Latvian biogas producers. In the development programme ‘Biogas Production and Use’ from 2007 to 2011 the biogas potential is thought to be approximately 174 million m³/ year (from manure – 95 (53%), biodegradable household waste – 23 (13%), sewage sludge – 10.8 (6%), animal by-products – 10.6 (6%), food processing waste, 23.0 (13%), and energy crops 16.8 (9%)).However, the Latvian market shows some disadvantages as well. The lack of a unified national economic policy, including agricultural policy is one major factor hindering the development of the biogas market. Furthermore, despite the fact that there is experience of using natural gas as vehicle fuel in Latvia, the use of biogas as a transport fuel is in a very early stage of development. Finally, the distribution of quota has been suspended until the 1st January 2013.In the period from 26th of May 2011 to the 1st of January 2013, the Ministry of Economics of the Republic of Latvia is not organizing any tenders for the acquisition of rights to sell electricity

Along with the feed-in tariff system to promote electricity generation from biogas, the Ministry of Agriculture, Ministry of Economics and the Ministry of the Environment are providing the co-funding from EU financial support instruments. Cabinet Regulation 268 stipulates that biogas plants can claim 40% in subsidies.Another support programme – Development of Cogeneration Power Plants Using RES – is aimed at significantly increasing the volumes of electricity and heat generated from renewable energy sources. Support is provided to the construction of new cogeneration power plants using RES. The activity is financed by the Cohesion Fund (12 March 2009 to 21 December 2013). The maximum permissible funding intensity is 50 % of the total eligible expenditure regardless of the technology applied.The Rural Support Service has a support programme, the Modernization of Agricultural Holdings, with a support intensity of 25-70%.


The share of RES has traditionally been significant in Latvia’s energy supply and in 2008 it comprised 29.9% of the total final energy consumption. In the consumption structure for electricity, the RES segment is made up of hydropower plants, wind power plants, biogas power plants, and biomass power plants, as well as cogeneration stations utilizing RES (see Table ‘RES Electricity’).In 2009, 58 entrepreneurs received a

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2005 2006 2007 2008 2009 2010 2011Total share 48.4 37.7 36.4 41.2 49.2 48.5 41.9Large hydro

power

plants

46.3 35.9 34.3 39.0 46.9 45.9 38.5

Small hydro

power

plants

0.9 0.5 0.9 0.9 0.9 1.0 0.8

Biomass

and biogas

power

plants

0.6 0.6 0.5 0.6 0.7 0.9 1.6

Wind power plants

0.7 0.6 0.7 0.8 0.7 0.7 1.0

Table ‚RES Electricity‘: Share of electricity generated from RES in Latvian gross electricity consumption (%)

Source: Central Statistical Bureau. Statistics database 2011. http://www.csb.gov.lv

Figure ‚Plants Latvia‘: Working plants (red) and plants in construction stage (green)

Latvian Biogas Association. http://www.latvijasbiogaze.lv/files/2%20-%20Biog%C4%81zes%20ra%C5%BEo%C5%A1anas%20aktualit%C4%81tes.pdf

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generated from RES within the framework of mandatory procurement, and the manufacturer cannot acquire rights to receive guaranteed fees for the installed electric capacity.10

Latvia’s legislation does not stipulate any regulation that transmission system operators should give preference to the connection of generating installations using RES.Latvia does not have a legal framework for the introduction of biomethane into the grid. In accordance with Article 49 of Directive 2009/73/EC of the European Parliament and Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC (hereinafter – Directive 2009/73/EC), Articles 4, 9, 37 and/or 38 shall not apply to Estonia, Latvia and/or Finland until any of those member states is directly connected to the interconnected system of any member state other than Estonia, Latvia, Lithuania, and Finland. Permits for direct lines were postponed until 4 April 2014. (Section 15 of the Energy Law).11

The draft Law on Renewable Energy provides for the stipulation of biogas generators’ rights to receive biogas certificates and biogas generators’ rights

10 Energy Policy. Ministry of Economics of Republic of Latvia. http://www.em.gov.lv11 Information Report Republic of Latvia National Renewable Energy Action Plan for implementing Di-rective 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC by 2020. http://www.ebb-eu.org/legis/ActionPlanDirective2009_28/natio-nal_renewable_energy_action_plan_latvia_en.pdf

to acquire rights for biogas enriched to natural gas quality to gain access and to be transmitted in natural gas networks.

3.7.7. Regulation

Latvia’s electricity market has been open since 2007. Electricity generating plants using RES to generate electricity may sell the generated electricity for a negotiated (market) price or also claim the State aid price.RES electricity generating plants do not have special conditions stipulated for operation in the electricity market. They must comply with the requirements prescribed by the Electricity Market Law.12 In order to start producing energy from biogas in Latvia, it is necessary to receive the following permits:1) Permission by the Ministry of Economics to increase production capacities or introduce new capacities;2) License from the Public Utilities Commission;3) Permission by the system operator for grid connection;4) Decision by the Environmental State Bureau about environmental impact assessment or technical regulations

12 Information Report Republic of Latvia National Renewable Energy Action Plan for implementing Di-rective 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC by 2020. http://www.ebb-eu.org/legis/ActionPlanDirective2009_28/natio-nal_renewable_energy_action_plan_latvia_en.pdf

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The ease of getting a loan from banks is very much dependent on individual project designs as the reliability of the chosen technology as well as feedstock supply security and price risks etc is being assessed. Each bank in Latvia has different credit conditions. In general the interest rate for bioenergy projects equals the general average interest rate on the market. The interest rate of each project is influenced by several risk factors; thus, the key is definitely not the purpose of loan. Ekodoma Ltd. conducted a survey of Latvian financing procedures among the biogas promoters in Latvia in 2011. Results of the survey show that there are difficulties with financing biogas projects in Latvia. More than half of all respondents say that it is difficult to get loans for biogas projects. More than 80% of all respondents think that Latvian banks are prejudiced against biogas projects. The lack of trust is named as one of the main problems of the Latvian financial procedures. Another problem is the excessive share of capital required by banks. Biogas developers mention the lack of state support and stable laws, which leads to general instability in the biogas sector as the main difficulties in the development of biogas projects.13

13 Ekodoma Ltd. http://www.biogasin.org/files/pdf/WP3/D.3.6.5_EKODOMA_LV.pdf

issued by the Regional Environmental Board of the State Environmental Service;5) Integrated pollution permit issued by the Regional Environmental Board of the State Environmental Service;6) GHG emission permit issued by the Regional Environmental Board of the State Environmental Service (in case the rated thermal input exceeds 20MW);7) If the energy producer wishes to qualify for obtaining the right to sell the electricity within the framework of the mandatory purchase, it is necessary to receive a decision issued by the Ministry of Economics about granting the right to sell the electricity within the framework of the mandatory purchase or the rights to receive the guaranteed payment for the capacity;8) Heat and electricity tariffs approved by the Public Utilities Commission;9) Construction permits.

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The Latvian Biogas Association (LBA) was founded in 1994. It is one of the oldest NGOs operating in Latvia’s energy sector. LBA is actively taking part in the development of state policy and regulations regarding the renewable energy sector.The Investment and Development Agency of Latvia (LIAA) is a state institution subordinate to the Ministry of Economics of the Republic of Latvia. LIAA offers assistance throughout the process of setting up operations in Latvia, acting as a first point of contact and as a ‘one-stop-shop’ in assisting investors and in developing tailored solutions to meet their specific needs. LIAA has its own regularly updated database of Latvian enterprises to facilitate partner searches for investment projects and for exporting or subcontracting businesses. The Investment and Development Agency of Latvia offers a matchmaking service, enabling potential investors and project partners to find suitable Latvian companies interested in Mergers & Acquisitions and joint venture opportunities.14

Biogas is known and well-regarded by the general public. During the last four years only two biogas projects were stopped due to public opposition.

14 The Investment and Development Agency of Lat-via. http://www.liaa.gov.lv

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3.8. fInland


Country Score Finland South - Biogas (November 2011)

In the general scoring for Bio-methane sector, Finland - South is rated place 45 out of total 81. The underlying categories that influence this re-sult are displayed in the bar chart above.

Country Score Finland South - Biomethane (November 2011)

In the general scoring for Bio-gas sector, Fin-land - South is rated place 34 out of total 81. The underlying categories that influence this result are dis-played in the bar chart abo-ve.

Bioenergy Association of Finland

(FINBIO)

Text: Mr. Pekka-Juhani Kuitto (Executive Director, retired)Contact: Mia SavolainenKorkeakoskentie 17 D, 40500 Jyväskylä, FinlandTel.: +358 40 7182026Email: mia.savolainen[at]finbio.fi

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by companies and 5% by others. The total volume of growing stock is 2,205 million m3 (solid), of which 50% is pine, 30% spruce and 20% non-coniferous. The annual growth is over 100 million m3 (solid) and annual fellings for industry purposes is 55 million m3 (solid). Total drain is 71,5 million3 (solid). These numbers are industrial round wood contents, without branches, tree tops, unmerchantable round wood and stump and root wood, which adds volumes around 20-40% more. Peatlands cover about 30% of Finland s territory. Peat is growing more annually than it is used for energy purposes, about 25 TWh per year. Most often peat is mixed with wood based fuels or coal at power or CHP plants. It is good quality, indigenous and low price fuel. Companies also import raw wood.There are 2.3 million hectares arable farm land in Finland. Wheat, barley and oats are the most produced crops in agriculture, but also potato and other root vegetables are very common. About 0.5-0.7 million hectares can be used for energy purposes.The road- and railway network is quite large (main roads 460,000 km, also dense forest road network, railroad net is 5,800 km). The maximum total weight for trucks is 60 tonnes on public roads. Also dense water transport systems and routes on the seasides and lakes exist.Finland s economy provides reliable frameworks for living and business. Living standards are high. GDP per capita is 38,000 € (2011). Finland is:

3.8.2. Basic Data

Finland is a democratic republic in Northern Europe between 60 and 70 degrees north latitude. It is the seventh largest country in Europe with a total territory area of 338,424 km² (of this 69% forest, 10% waterways, 8% cultivated land and 13% other). The total population is 5.4 million. The capital and largest city is Helsinki (in capital area 1 million inhabitants). The population is mostly concentrated in the southern and central part of the country. About 80% of the population lives in urban areas.Finland is the coldest country in the EU. Latitude is the principal influence on the country s climate. On average, winter with snow lasts from mid December to mid March in the south, and from October to early May in the north. The vegetation zone is mainly characterised by boreal forest. The mean daily temperature in the capital Helsinki is minus 4 °C in January and plus 18 C°C in June. In Northern Finland - also called ‘Lapland’ - temperatures may fall to minus 25-35° C in mid winter. However, because the Gulf Stream and the North Atlantic Drift Current moderate the climate, and because of the relatively low elevation of the land area, Finland contains half of the world’s arable land north of 60° northern latitude.Finland is world famous for its large boreal forest and peatlands, and its global forest industry that comes therewith. Forestry land (incl. protected areas) is 228,000 km2, of which 52% is owned by private families, 35% by the state, 8%

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consumption. In addition to energy conservation, this is one of the most significant means by which Finland’s climate targets can be reached. In use, RES do not increase carbon dioxide emissions, but they create employment, promote regional policy goals, and enhance the security of energy supply. The strategy also supports technology exports for the industry, which are already becoming an important part of Finnish exports.Finland s national target is to increase the use of renewables by 9.5% units to overall 38% in 2020. Bioenergy has a major role. Achieving the 38% target entails an increase in the use of renewable energy of approximately 40 TWh compared to 2005, when renewable energy use accounted for 28.5%. One particular target within this national action plan is for renewables to account for at least 20% of transportation fuels by 2020, taking into account the double counting referred to in the RES Directive. The total renewable energy target in 2020 is 124 TWh (85 TWh for heating and cooling, 33 TWh for electricity and 6,5-7 TWh in traffic) of which bioenergy is 105 TWh. Other targets are to decrease the GHG emissions at least by 16% until 2020 and to increase energy efficiency by 20% until 2020.According to the Climate and Energy Strategy, the use of biogas should be increased to 0.7 TWh by 2020. In order to promote CHP production using biogas (reactor plants) a market-based new feed-in tariff scheme was introduced, which is financed by the State budget.

• Number one in World Economic Forum 2005 Competitiveness Rankings.1 • One of the Least Corrupted Nations in the World (number one in 2007 and number two in 2011 / Transparency In-ternational).• The Best Country in 2010 by Newsweek (indicators: education, healthiness, qua-lity of life, economical dynamics and po-litical frames). • The second happiest nation 2012 by United Nations Ranking (1. Denmark, 2. Finland, 3. Norway, 4. Netherlands, 5. Canada etc.).Usefull links:• Finland Statistics • Common information • Energy Statistics • Bioenergy Statistics: www.finbioener-gy.fi and www.bioenergia.fi


Finland is one of the world’s leading users of RS for energy generation, especially bioenergy. RES provide one fourth of Finland’s total energy consumption and accounts for more than one fourth of its power generation. The country’s most important RES include bioenergy – wood and wood-based fuels in particular –, hydropower, wind power, ground heat, and solar energy. The objective of the national energy and climate strategy is to increase the use of RES and their share of energy

1 www.weforum.org

http://www.stat.fi

http://www.visitfinland.com

http://www.energia.fi

http://www.finbioenergy.fi

http://www.finbioenergy.fi

http://www.bioenergia.fi

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waste. The food industry creates 430,000 tonnes of process waste per year that could be utilized for biogas production. In terms of energy, this corresponds to 0.4-0.6 TWh. Approximately 160,000 tonnes of slurry from wastewater treatment plants is created each year, which could be used to produce about 0.9 TWh of energy by utilizing biogas technology. The biggest biogas potential is in agriculture, where biogas can be produced from animal manure, plant production waste, side streams, and from purpose-grown agrobiomass. A total of 25 million tonnes of straw and manure is produced, corresponding to approximately 30-140 TWh of energy. Altogether, the theoretical maximum potential for biogas energy ranges from 40-150 TWh (140-530 PJ) taking into consideration purpose-grown agrobiomass. The techno-economic biogas potential based on biogas raw materials is estimated to be 7-18 TWh. This estimate can be considered to be quite a good potential for 2020.2

Biogas can be produced from organic waste and agrobiomass in biogas plants. In 2010, 0.463 TWh of energy, 0.315 TWh of heat, and 0.107 TWh of electricity were produced from biogas. The biogas market in Finland is quite small, however it is growing. Gas production potentials are large and also several raw material sources are not yet depleted.Approximately 2.6 million tonnes of municipal waste has been collected, of which about 33% was biowaste that could be utilized for biogas production. 2 FINBIO Publication nro 46

The feed-in tariff is equivalent to the difference between the target price and the market price of electricity. The tariff will be paid only to new biogas power plants. The target price for electricity produced from biogas covered by the feed-in tariff scheme is €83.50 per MWh. In CHP production, in addition, a heat premium of €50 per megawatt-hour is paid for electricity produced from biogas. The cost of the biogas electricity support scheme is estimated at around €2 million in 2011 and around €10 million in 2020 if the market price for electricity is €50 per MWh. Electricity generated from biogas not covered by the feed-in tariff scheme will continue to benefit from a fixed subsidy of €4.20 per MWh.Farm-size biogas technology investments can also get the national subsidy funds. Use of landfill gas will be promoted by the energy subsidy.

3.8.4. Feedstocks

Biogas can be produced from organic waste and agrobiomass in biogas plants. In 2010, 0.463 TWh of energy, 0.315 TWh of heat, and 0.107 TWh of electricity were produced from biogas. The biogas market in Finland is quite small; however, it is growing. Gas production potentials are large and also several raw material sources are not yet depleted.Approximately 2.6 million tonnes of municipal waste has been collected, of which about 33% was biowaste that could be utilized for biogas production. The amount of municipality waste is 0.9-1.3 TWh depending on the quality of the

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Currently, there are numerous plans in all parts of Finland for investing in biogas upgrading plants and filling stations by 2015. Most of them are outside of the natural gas network that only covers a part of Southern Finland. If all those plans are realized, the total annual production capacity of upgraded biogas would go up to 500 GWh. The total techno-economic biowaste resource is 7-18 TWh/a.The most effective incentive for innovation is a market where broad diffusion of new solutions happens quickly and open-mindedly. In addition to promoting research and development activities, innovation policy aims to boost demand for innovations, and, thereby, encourages companies to develop more advanced products and services.For biomethane and biogas availability, prices of biomass, logistics and other production costs play in important role when competiting with fossil fuels prices. In order to promote CHP production using biogas (reactor plants) a market-based feed-in-tariff scheme was introduced in 2011 financed on an annual level fom the State budget. The feed-in tariff is equivalent to the difference between the target price and the market price of electricity. The tariff is paid only to new power plants. The target price for electricity produced from biogas or wood chips covered by the feed-in tariff scheme would be €83.50 per MWh. With regards to CHP production an additional heat premium of €50 per megawatt-hour is paid supplementing the feed-in tariff. The cost of the biogas electricity support

The amount of municipality waste is 0.9-1.3 TWh depending on the quality of the waste. The food industry creates 430,000 tonnes of process waste per year that could be utilized for biogas production. In terms of energy, this corresponds to 0.4-0.6 TWh. Approximately 160,000 tonnes of slurry from wastewater treatment plants is created each year, which could be used to produce about 0.9 TWh of energy by utilizing biogas technology. The biggest biogas potential lies in agriculture, where biogas can be produced from animal manure, plant production waste and side streams, as well as from purpose-grown agrobiomass. A total of 25 million tonnes of straw and manure is produced, corresponding to approximately 30-140 TWh of energy. Altogether the theoretical maximum potential for biogas energy ranges from 40-150 TWh (140-530 PJ) taking into consideration purpose-grown agrobiomass. The techno-economic biogas potential based on biogas raw materials is estimated to be 7-18 TWh. This estimate can be considered to be quite a good potential for 2020.3


Finland uses some of its biogas for energy production; however, some is still remains at landfills without being used. The biogas potential is large, and so far mainly unused for energy production. If this potential was used to its maximum, about 700,000 cars or 50,000 buses in Finland could be powered by biogas generated from waste materials. 3 FINBIO Publication nro 46

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of recommended instruments has been designed for State level interventions. In road transport, the target is 2% of vehicles in 2020, i.e. 60,000 vehicles. Meeting the target means that methane-driven vehicles reach a 4.4 % share of registrations in the period from 2012 to 2020. Also a part of non-electrified rail transport is expected to move from diesel oil to methane by 2020. Water transport will be leading the way, since already in 2013 two large vessels (300 GWh annual methane consumption) will be taken into use: Viking Grace (a large passenger ship for the Turku-Stockholm route) and UVL 10 (Finnish border patrol boat). Both being currently under construction, they will be using Finnish Wärtsilä dualfuel methane-diesel engines. By 2020 at least 20 vessels are expected to follow due to the UN/IMO sulfur emission

scheme was estimated at around €2 million in 2011 and around €10 million in 2020 if the market price for electricity is €50 per MWh. Electricity generated from biogas that is not covered by the feed-in tariff scheme will continue to benefit from a fixed subsidy of €4.20 per MWh. Wind and wood fuelled plants get €6.90 per MWh. The Finnish Biogas Association and the North Karelian Traffic Biogas Network Development Programme have just introduced the Roadmap to Renewable Methane Economy target paper. A goal of 40 % for renewable methane of transport energy consumption in 2050 is proposed in the report and roadmaps for different forms of transport have been planned. In order to get the development into the desired tracks, targets for 2020 have also been proposed, and a toolbox

Figure ‚Fossil and Renewables‘: Fossil fuels and renewables 1970–2011, PJ

Source: Statistics Finland, Energy supply and consumption, www.stat.fi

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mixed with peat) and 17 TWh in small houses. Today, carbon dioxide emissions from the production and use of energy is 50 million tons (almost 70 million tons in 2002). In 2011, total energy consumption came from the following sources: oil 24%, wood fuels 22%, nuclear energy 18%, coal 11%, natural gas 10%, peat 6%, net imports of electricity 4%, hydro and wind power 3% and others 3% (see Figure ’Fossil and Renwables’).Finland is one of the world leaders in the utilization of wood based energy, the development of biomass combustion technologies, and the creation of efficient fuel supply chains from farm-size up to the world s biggest biomass plant. The cold climate, long distances and an energy intensive industry explain why Finland has a relatively high demand for energy. The specific energy consumption per capita is high; industry uses about half of the energy generated. An efficient and balanced energy system is crucial. Today, significant indigenous energy sources are limited mainly to wood fuels, peat and hydropower, but the range will be widened with wind, biogas, agricultural biomass, biofuels for transport, and heat pumps. The use of wood fuels is growing the most.Currently, about 140 million m3 of biogas is being produced in Finland. Altogether, 16 biogas reactor plants were in operation at different municipal wastewater treatment plants by the end of 2010. Industrial wastewaters were treated anaerobically at three different plants. Farm-scale biogas plants operated at 10 facilities. Municipal solid wastes were

restrictions in the Baltic Sea. In 2020 natural gas (NG) is expected to cover 60 % of transport methane use of 2.5 TWh. Biogas (BG) and synthetic biogas (SBG) would contribute 1 TWh (40 %). After 2020 the share of renewable methane will continuously increase, and by 2050, the use of natural gas and all other fossil fuels will be phased out.


In 2010, 0,463 TWh of energy, 0,315 TWh of heat, and 0,107 TWh of electricity were produced from biogas.4 It is still under 1% of the total energy production using renewables. According to Finland s Climate and Energy Strategy, the use of biogas should be increased to 0.7 TWh by 2020.The total energy consumption in Finland was 1,386 PJ or 386 TWh in 2011. Consumption of electricity amounted to 84.4 TWh (16% of the electricity consumed in the country was covered with imported electricity). Already today, nearly 30% of the total energy consumption is produced by RES. Bioenergy is the most significant source of renewable energy, accounting for approximately one-fifth of Finland s total energy consumption. Today, wood-based energy is the most important RES and it will continue to grow in the near future. Wood energy usage today is almost as large as oil. A total of 86 TWh of wood energy was used in 2011 (liquid 37 TWh and solid 49 TWh). 32 TWh of solid wood fuels were used in energy plants (often 4 Finnish Gas Association

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plant waste, kitchen waste, industrial waste from a nearby candy factory and energy crops. Today, there are around 800 biogas vehicles and 15 feeding stations in Finland. The use of biogas for traffic purposes is 7.20 TJ or 2000 MWh. So, until today biomethane is not very common in the transport sector. If used as transport fuel, biomethane has to meet the sustainability requirements.Finland s strategy for transport biogas aims at a 10% share of biomethane in traffic fuels in 2020. The strategy’s primary act is to keep biomethane and biogas vehicles exempt from. However, in 2011 the Parliament permitted the new fuel taxation and taxes for vehicles using other fuels than gasoline, including biogas vehicles. Biomethane as a fuel is still free from fuel taxation.Usefull links:• Bioenergia• Finnish Biogas Association• Benet Ltd• Gasum Ltd• Metener Ltd• Finland Statistics• Energy statistics• Common information about Finland• Energy Statistics

treated at six biogas plants. In 2010, the amount of biogas produced by the reactor installations was 37.5 million m³ and the combustion of surplus biogas 4.8 million m³. The production of thermal, electrical and mechanical energy was 179.0 GWh. As compared to the previous year, there was a fair increase in the total amount of the produced biogas and the energy generated. Altogether there were 39 landfill gas recovery plants in operation. The amount of biogas recovered was 101.6 million m³. The amount of recovered biogas used for the production of electrical and thermal energy was 58.7 million m³, producing 242.4 GWh.5

Finland imports natural gas from Russia. 40 TWh of natural gas is consumed by the company Gasum Ltd. The company also owns the natural gas pipeline network and it covers the southern part of Finland, a total of 1.310 km of high-pressure gas transmission pipelines and 540 km of lower-pressure ones. The small amount of ‘made in Finland’ biogas is fed into the Gasum gas network, too. In the transport sector, the role of biogas is expected to increase in the near future. Before 2002, Finland did not have modern biogas cars. This changed when Mr. Erkki Kalmari (Metener Ltd) in Central Finland bought the first ones and started the farm-size biogas production and technology development in his farm: biogas for heat and electricity and traffic purposes. Biogas is produced by co-digesting manure from 40 cows with

5 University of Eastern Finland, www.uef.fi and Fin-nish Biogas Association, www.biokaasuyhdistys.net


http://www.biokaasuyhdistys.net

http://www.benet.fi

http://www.gasum.fi

http://www.metener.fi

http://www.stat.fi


http://www.visitfinland.com


http://www.uef.fi


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replacement of peat with forest chips. In order to promote CHP production using biogas (reactor plants) a market-based feed-in-tariff scheme will be annually financed from the State budget.The feed-in tariff is paid only to new power plants. A power plant benefiting from the feed-in tariff would not be eligible for any other State aid like the construction investment costs of renewable energy plants, which are co-financed by the government with grants of up to 40%. For the plants using BAU technologies, the co-financing can be up to 30%. This financing applies to companies.6

The Energy Market Authority approves power plants for the feed-in tariff system, pays the feed-in tariff upon application, and manages other official tasks in the feed-in tariff system.The use of transport biofuels is to be increased to 7 TWh by 2020. Promotion of the use of biofuels will be primarily based on a distribution obligation incumbent on vendors of transport fuels. The aim is to set the biofuel distribution obligation as high as 20% by 2020, taking into account the double counting referred to in the RES Directive.7

Finland s strategy for transport biogas aims to reach a 10% share of biomethane in traffic fuels in 2020. The strategy’s primary act is to keep biomethane free from fuel taxation and biogas vehicles free from taxation for vehicles that use other fuels than gasoline. However, in 6 http://www.finlex.fi/fi/laki/alkup/2007/200713137 Finland’s National Action Plan for promoting Ener-gy from Renewable Sources pursuant to Directive 2009/28/EC

3.8.7. Regulation

In Finland, there is a feed-in tariff for renewable energy. The Act on Production Subsidy for Electricity Produced from RES (1396/2010) lays down provisions for a feed-in tariff system for which wind, biogas, forest chips and wood-based power plants.In the feed-in tariff system, an electricity producer whose power plant is approved will receive a subsidy (feed-in tariff) for a maximum of twelve years. The subsidy varies on the basis of a three-month electricity market price and the market price of emission allowances. The producer is paid a feed-in tariff, which is the difference between the target price and the spot market price (last 3 months’ average). For electricity produced in a power plant using wood-based fuel or a biogas power plant, an increased feed-in tariff is paid in the form of a standard heat premium if also heat is produced if the overall efficiency of the plant meets the required standards. The purpose of the subsidy at hand is to promote investments in wind, biogas, and wood-based power plants, and it is dimensioned to have the total amount of subsidies paid to the power plant for the feed-in tariff periods to compensate for investment costs.The feed-in tariff paid for electricity produced in a forest chip fuelled power plant included in the feed-in tariff system is designed to retain the competitiveness of the use of forest chips as fuel in the cogeneration of power and heat. The purpose of this subsidy is to promote the

http://www.finlex.fi/fi/laki/alkup/2007/20071313

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Finland is a member of the Eurozone; hence, currency exchange risks for investors from other Eurozone countries are low. Finland s economy is rated with one of the best scores at Standard & Poor s and Moody s.9 In addition, Finland was number one in World Economic Forum 2005 Competitiveness Rankings10 and one of the Least Corrupted Nations in the World: number one in 2007 and number two in 2011.11 Finland s credit rating is AAA.There are plenty of international and national banks situated in Finland. Loan interest levels are rather low but variable. The easiness of getting a credit from banks is very much dependent on individual projects. Common VAT is 23% but companies have possibilities to be rebated.In the EU, the competition rules are generally divided into two parts: regulations applying to the use of public support (government support) and regulations related to the conduct of businesses. Investments between the OECD member countries are regulated by the organisation’s so-called National Treatment Instrument, Code of Liberalisation of Current Invisible Operations and Code of Liberalisation of Capital Movements, and the Guidelines for Multinational Enterprises, of which the latter still only comprises recommendations. The Ministry for 9 www.standardandpoors.com/home/en/eu and www.moodys.com10 www.weforum.org11 http://cpi.transparency.org/cpi2011/results/

2011 the Parliament permitted the new fuel taxation and taxes for vehicles using other fuels than gasoline, including biogas vehicles. For instance new taxation for methane using passenger cars is 3.1 cents / day for each incipient 100 kg of vehicles mass. Biomethane as a fuel has remained free from fuel taxation.8

Transport-related emissions will be reduced, for instance, by supporting public transport, renewing the vehicle fleet and favouring low-emission vehicle technology. Vehicle taxation has been reformed, paying due respect to low emissions in accordance with the concept of technology neutrality. The use of biogas in vehicles will be promoted. Attention will be paid to the development of vehicle technology and biofuels and their emissions impacts over their full life-cycle. Various budgeting and financing models for transport investments are evaluated. The project evaluation of such investments will be renewed in such a manner that their economic, employment, emissions, and regional policy impacts will be taken into consideration

8 http://www.liikennebiokaasu.fi/index.php?option=com_content&view=category&layout=blog&id=14&Itemid=13

http://www.standardandpoors.com/home/en/eu and www.moodys.com

http://www.standardandpoors.com/home/en/eu and www.moodys.com

http://www.weforum.org

http://cpi.transparency.org/cpi2011/results/

http://www.liikennebiokaasu.fi/index.php?option=com_content&view=category&layout=blog&id=14&Itemid=13



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that decrease environmental damages. Typical public energy grants range from 10-15% for heating plants, from 15-20% for landfill gas plant, and from 10-20% for wood chips or industrial waste wood production machineries etc. Usefull links:• Ministry for Foreign Affairs of Finland• Ministry of Employment and the Eco-nomy• Finpro• Bioenergia Association with its mem-bers


Biogas is currently being produced in about forty reactor plants (37.5 million m³) and in 39 landfill gas recovery plants (101.6 million m³). rowth has been quite slow up to today, but the new feed-in tariff schemes and energy subsidies for biogas will increase the production and use of biogas for heat and electricity. Biogas is also fed into the natural gas pipeline network. Thus, technology markets are open for expanding gross border bioenergy businesses. There are numerous plans in all parts of Finland for investmetns into biogas upgrading plants and filling stations by 2015. Most of them are outside of the natural gas network that only covers the southern part of Finland. If all those plans will become a reality, the total annual production capacity of upgraded biogas would go up to 500 GWh. However, the total biowaste resource is 14 TWh/year.

Foreign Affairs of Finland12 provides knowledge and information about trade and partnership possibilities for national and international business cases. By international comparison concerning the number of investment agreements, Finland ranks among the middle group together with Sweden, Denmark, Austria and Belgium. At the moment, the number of valid agreements is somewhat over 50. Germany, Great Britain and Switzerland have the most comprehensive networks of agreements, each with well over one hundred agreements.The partnership with Finnish companies is also worth while. Finpro13 trade supporting organization has 400 professionals in almost 50 countries. It opens up future business opportunities by understanding changes in international markets. It serves clients by enabling them to be in the right markets at the right time with a competitive concept.The specific energy project financing institution is the Ministry of Employment and the Economy.14 It offers different kinds of support in financing, investing and developing projects of renewable energy projects in Finland. The maximum energy subsidy per cents granted by the Ministry of Employment and the Economy are 40% when investments are targeted at new technologies or energy saving appliances at plants using renewables. The subsidiy is at 30% when investments flow into ordinary technologies or technologies

12 www.formin.finland.fi13 www.finpro.fi14 www.tem.fi

http://www.formin.finland.fi

http://www.tem.fi

http://www.tem.fi

http://www.finpro.fi



http://www.formin.finland.fi



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In addition, there is a plan to build a large synthetic biogas (SBG) production plant at a pulp mill, based on waste wood use. Its annual production capacity of upgraded biomethane would be up to 1600 GWh. It has estimated that there would be a potential for 9 other plants of similar size.15

Usefull links:Associations:• Finnish Biogas Association• Finnish Gas Association• BioenergiaInstitutions:• Ministry of Employment and the Eco-nomy • Ministry of Agriculture and Forestry• VTT Technical Research Centre of Fin-landCompanies:• Gasum Oy• Benet Oy• Bionova Oy• Bioste Oy• Metener Oy• Sarlin Oy

15 Finnish Biogas Association


http://www.kaasuyhdistys.fi


http://www.tem.fi

http://www.tem.fi

http://www.mmm.fi

http://www.vtt.fi

http://www.vtt.fi

http://www.gasum.com

http://www.benet.fi

http://www.bionova.fi

http://www.bioste.fi

http://www.metener.fi

http://www.sarlin.com

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4. annex

1. Country profile (geography, demographics, logistics, etc.) 1.1 Geography and Climate

• Total land area• What is the average summer temperature across regions in target country over the last 10 years?

1.2 Population

• Total number of inhabitants• Total number of households in the country• Population density• Household density• Total number of personal transport vehicles

1.3 Wealth/economic status of population

• What was the average GDP real growth rate between 2008 - 2010? • GDP per capita for 2010

1.4 Logistics - road and rail network

• What is the density of road-network? (for goods/biomass transportation)• What is the density of the electricity transmission and distribution networks?• What is the density of the gas transmission and distribution networks? 2. Energy Policy (political will, nREAP, etc.) 2.1 The nREAP is ambitious and proposes appropriate measures

• There are high-volume targets for RES (Difference in ktoe 2010 - 2020)• There are high-volume targets for biogas (Difference in ktoe 2010 - 2020)• There are high-volume targets for electricity from CHP (Difference in ktoe 2010 - 2020)• Proposed measures for bio-methane and biogas in nREAP are appropriate and convincing• Proposed measures for biogas CHP in nREAP are appropriate and convincing

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2.2 A political will to develop the RES-sector is clearly recognisable and stable • Does the government provide an appropriate budget for the targeted market growth for biogas, biomethane?• Have the support schemes/framework conditions for investments in biomethane changed within the last 2-4 years? • Is a revision of the framework conditions announced, which could affect bio metha-ne market development?• Is a revision of the framework conditions announced, which could affect the elec-tricity market development?• What is the period of time before the next general (national) elections.

3. Feedstocks 3.1 The biomass potential is sufficient to enable biogas CHP projects • How many cattle-equivalent units are in the region? (to identify potential based on feedstock)• How large is the (municipal + commercial) bio-waste potential in the region? • What is the amount of biogas already produced in the region?

3.2 The biomass potential is sufficient to enable biomethane projects • How many cattle-equivalent units are in the region?• How large is the (municipal + commercial) bio-waste potential in the region?• What is the amount of already produced bio-methane in the region (to identify the remaining technical potential)?

3.3 The agricultural structure is beneficial for biogas and/or biofuel projects • How many farms have at least 150 cattle in stables, which could enable small bio-gas CHP projects?• How many farms have at least 500 cattle in stables, which could enable larger bio-gas CHP projects?• How many farms have at least 125 ha crop land, which could enable larger biogas CHP projects?• What is the available farmland per inhabitant?

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3.4 Feedstocks are available for biofuel production • Amount of domestic demand for cereal for biofuels in 2010• Did the cereal production of 2010 exceed the domestic demand?• Did the oil seed production of 2010 exceed the domestic demand?• Area of fallow/abandonned land available for agricultural expansion

4. Economic instruments (prices, support schemes/guarantee, subsidies, etc.) 4.1 Financial support schemes can be claimed for investments • What portion of the investment in biogas plants can be claimed in subsidies (cu-mulative, including tax advantages)? • When does the scheme end granting funding for biogas plants?• Subsidies for investments in logistic/Infrastructure for high blend / pure bio fuels are in place• Investment subsidies for green vehicles procurements are in place

4.2 Financial support schemes can be claimed for operation • 150 kW biogas plants: How high is the legally guaranteed price for electricity (eit-her feed in system, green certificate or other) in 2010?• 500 kW biogas plants: How high is the legally guaranteed price for electricity (eit-her through feed in system, green certificate or other) in 2010?• >500 kW biogas plants: How high is the legally guaranteed price for electricity (either through feed in system, green certificate or other) in 2010?• How long is the guaranteed duration of the biogas support scheme? • Is the support scheme limited by a maximum public spending budget?• Is there a financial incentive to support the operation of biomethane or gas ve-hicles?

4.3 Prices of fossil fuels are high and heavily taxed • What is the price per kWh of gas for households?• What is the price per kWh of gas for large scale consumers (average over the last year)?• What is the commodity price development of natural gas over the last 4 years? • What is the tax on gas (CO2, energy, excluding VAT or ‘normal’ taxes)?

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• Is the use of fossil gas supported e.g. by tax incentinves, obligations, free delivery of CO2-allowances etc.?• What is the price development of electricity of the last 4 years? • What is the average end customers price for gas for transport over the last year (2010)?

5.Market aspects (volume, access to grid, etc.) 5.1 The energy sector is large and expected to grow • Amount of gas used in medium and large scale consumers (2010)?• Expected growth in large and medium-scale use of gas from 2009 to 2020• Amount of gas used by small scale consumers (2010)?• Amount of total national electricity consumption • Expected growth in national electricity consumption from 2009 to 2020• What is the average age of the stock of power plants (coal, natural gas, nuclear)• What is the share of natural gas in the electricity sector?• Has the region decided to phase out nuclear energy (providing potential for RES)?

5.2 Access to the electricity grid is guaranteed • Is there in general an electricity grid available with sufficient capacity?• Is there in general an electricity grid available with regulated grid access?• Is there in general an electricity grid available with regulated costs for grid con-nection?• Is there in general an electricity grid available with priority for RES?• Is the grid operator obliged to connect all renewable energy installations?

5.3 The heat market offers good opportunities • What is the total amount of energy consumed by the small heating sector?• What is the proportion of customers connected to a district heating grid?• What is the amount of coal in the district heating sector?• What is the average age of the stock of domestic heating appliances • Is the connection of a biomethane plant to a natural gas grid regulated?• Are the costs for grid connection regulated?

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• Is there a natural gas grid for biomethane feeding available with priority for bio-methane?

5.4 Produced energy can freely be marketed • Is the electricity market liberalised and private firms are free to participate in any part of the supply chain? • Is the heat market liberalised and private firms are free to participate in any part of the supply chain?• Is the gas market liberalised and private firms are free to participate in any part of the supply chain?

5.5 The electricity market in the target country provides promising growth perspectives • What is the rate of additional electricity demand until 2020 (overall, not only RES)? (2020-2009)/2009)• What is the growth rate of electricity from biogas over the last 4 years?• What is the cumulative amount of electricity produced from biogas in the last available year?

5.6 The heat market in the target country provides promising growth perspectives • What is the rate of the additional heat demand until 2020 (overall, not only RES)? • What is the growth rate of biogas in the heat market over the last 4 years? • What is the cumulative amount of heat produced by biogas in the last available year?

5.7 The gas market enables the use of biomethane• What is the rate of the additional gas demand until 2020 (overall, not biomethane only)• What is the additional gas demand until 2020 in absolute terms?• What is the cumulative amount of biomethane consumed in the last available year compared with biomethane target? • What is the growth rate of biomethane in the gas market of the last 4 years (CAGR)?• What is the growth rate of biomethane in the transport sector of the last 4 years (CAGR)?

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• What is the total amount of biomethane used as vehicle fuel? • Amount of all gaseous fuels used in transport

5.8 The Framework conditions for fossil fuels do not impair market development • What is the contribution of imported natural gas on the primary energy supply in real terms?• What is the percentage contribution of imported natural gas on the primary energy supply?• What is the contribution of imported oil to primary energy supply in real terms?• What is the percentage contribution of imported oil to primary energy supply?• What is the contribution of imported coal to primary energy supply in real terms?• What is the percentage contribution of imported coal to primary energy supply?

5.9 Bioenergy is already implemented with a strong growth • What is the total biogas production quantity irrespective of final use• What is the biogas production growth rate in the last 4 years (CAGR)

5.10 An intense competition is not recognisable • Number of competitors providing (manufacture or sale) turn-key biogas plants • Total amount of biogas/biomethane plant capacity sold (by existing com-petitors) over the last 4 years

6.Regulations (laws/mandatory targets for bioenergy, permitting, emission thresholds, etc.)

6.1 Regulatory instruments to support bioenergy markets have successfully been introduced • How large is the quota for RES electricity in absolute terms?• How large is the quota for RES heat in absolute terms?

6.2 The approval procedure by the authorities is adequate in terms of time • How long does the approval process last in average for a biogas plant < 500 kWel installed capacity?• How long does the appoval process last in average for a biogas plant > 500

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kWel installed capacity?

6.3 Specific regulations are favourable for bioenergy market developments • Is there a hygiene regulation for the treatment of bio wastes, which could incite its utilisation in biogas plants?

6.4 Are criteria for efficiency required? • Is there an obligation for CHP-operation of a biogas plant, if so, what is the requi-red heat percentage?

6.5 Existing emission thresholds can be fulfilled with the applied technology • Are there limits to emissions to air from biogas plants and, if so, how severe are they? • Are there limits for noise emissions from biogas plants and, if so, how severe are they? • Are there any regulations to mitigate odour emissions fropm biogas plants?

7. Project financing context (economic situation, loan, banks, etc.) 7.1 The country has a solid financial position • Standard and poors rating

7.2 Export friendliness • Euler Hermes rating• Corruption perception index• Country risk as reflected by the @rating country of COFACE• Ranking of feasibility of “starting a business” in the IFC-World Bank Doing Busi-ness Index• Ranking of Feasibility of “getting credit” in the IFC-World Bank Doing Business Index7.3 The banks are familiar with bioenergy technology and support its development• Is the support of bioenergy projects highlighted in official papers of the banks, like annual reports etc.?• Are Governmental guarantees for loans for bioenergy investements in place?

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7.4 Foreign investments are supported in the target country • Are there any programmes implemented in the region to attract foreign invest-ments?

7.5 The banks in the target country provide attractive conditions for bioenergy projects • Can bioenergy plants benefit from interest rates for credits lower than usual in the market?

• Are the support conditions feasible in an adequate scope?

7.6 The market is liquid and transparent • Biomethane prices are published on market place• Financial market instruments (e.g. hedging, futures) are available to mitigate the bio-methane price risk

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Participating companies of the biogas working group

agri.capital GmbHMichael Hauck, Head of Corporate CommunicationHafenweg 15, 48155 Münster, GermanyPhone: +49 (0) 251/27601 -100www.agri-capital.de

BDI BioEnergy International AGDl Martin KrennParkring 18, 8074 Grambach, Graz AustriaPhone: +43 (0) 316/4009100www.bdi-bioenergy.com

Benet LtdDan Asplund, Asko OjaniemiPiippukatu 11, 40100 Jyväskyla, FinlandPhone: +35 (0) 8400/640460www.benet.fibiogas weser-ems GmbH & Co. KGRené Püschel, SalesZeppelinring 12-16, DE-26169 Friesoythe, GermanyPhone: +49 4491/938 006 44www.biogas-weser-ems.de

CNG Services LtdJohn Baldwin, Managing DirectorRowanleigh, 37 St Bernards Road, United KingdomPhone: +44 (0) 121 707 8581www.cngservices.co.uk

COWI ABKarin van der Salm, Business Development Manager BioenergySkärsgaardsgatan 1 SE-402 41 Gothenburg, SwedenPhone: +46 10/8501000www.cowi.se

http://www.agri-capital.de

http://www.bdi-bioenergy.com

http://www.benet.fi

http://www.biogas-weser-ems.de

http://www.cngservices.co.uk

http://www.cowi.se

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CTS Engtec OyKirsi Juura, Manager, Marketing and Corporate CommunicationsKaikukatu 7, FI-45101 Kouvola, FinlandPhone: +358 (0) 207/567 268www.ctse.fi

Dalkia GmbHDaniel HölderHammerbrookstr. 69, 20097 Hamburg, GermanyPhone: +49 (0) 40/253038-0www.dalkia.de

Gasum OyPasi TorriP.O. Box 21, 0215 Espo, FinlandPhone: +258 (0) 20/4471www.gasum.fi

German Biogas AssociationSebastian Stolpp, International MarketsAngerbrunnenstr. 12, 85356 Freising, GermanyPhone: +49 (0) 8161/984660www.biogas.org

juwi R&D GmbHJan Schröter, Research AnalystEnergie-Allee 1, 55286 Wörrstadt, GermanyPhone: +49 (0) 6732/96571058www.juwi.de

MalmbergGruppen ABErik Malmberg, Export Director BiogasMalmberger Water AB 29685, Aarhus, SwedenPhone: +46 (0) 44/7801853www.malmberg.se

http://www.ctse.fi

http://www.dalkia.de

http://www.gasum.fi


http://www.juwi.de

http://www.malmberg.se

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MWM GmbHDanieö Tislaric, Head of Business DevelopmentCarl-Benz-Straße 1, 68167 Mannheim, GermanyPhone: +49 (0) 621/3848673www.mwm.net

Planet Biogastechnik GmbHHanna GarbertUp de Hacke 26, 48691 Vreden, GermanyPhone: +49 (0) 2564/3950-128www.planet-biogas.com

Pro2 Anlagentechnik GmbHStephan Waerdt, Managing DirectorSchmelzerstraße 25, 47877 Willich, GermanyPhone: +49 (0) 2154/488-0www.pro2.com

Schmack Biogas GmbHMarkus StaudtBayernwerk 8, 92421 Schwandorf, GermanyPhone: +49 (0) 9431/751-210www.schmack-biogas.com

WELtec BioPowerHajo Schierhold, Heas of SalesZum Langenberg 2, 49377 Vechta, GermanyPhone: +49 (0) 4441/99978-0www.weltec-biopower.de

www.planet-biogas.com

www.planet-biogas.com

www.pro2.com

www.schmack-biogas.com

www.weltec-biopower.de

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Impressum

Publisher: AEBIOMAuthor: AEBIOMEditor: eclareon Consultants

First Edition September 2012

Acknowledgements:Special thanks are expressed to all industry stakeholders of the biogas working group for their contributions and their part in the discussions during the elaboration of the list of criteria and indicators.

Photos: ABA, GDF Suez, Direct Industry, Vattenfal, Flickr.



Project CoordinatorEuropEan Biomass association (aEBiom)Mr. Jean-Marc JossartEmail: [email protected]: +32 (0) 24 00 10 61Website: www.aebiom.org

Project Partners

DanisH BioEnErgy association (Di BioEnErgi)Mrs. Kristine van het Erve GrunnetEmail: [email protected]: +45 (0)33 77 33 69Website: www.energi.di.dk

gErman BioEnErgy association (BBE)Mr. Thomas SiegmundEmail: [email protected]: +49 (0) 228 81 00 223Website: www.bioenergie.de

Hungarian Biomass compEtEncE cEntEr (HBcc)Mr. Imre Németh; Email: obekk[at]invitel.huPhone: + 36 (0) 28 420-291Website: www.bioenergia-obekk.hu

italian agroforEstry EnErgy association (aiEl)Mrs. Annalisa Paniz; Email: [email protected]: +39 (0) 49 88 30 722Website: www.aiel.cia.it

latvian BioEnErgy association (latBionrg)Mr. Didzis PalejsEmail: [email protected]: +371 (0) 675 22 399Website: www.latbionrg.lv

slovak BioEnErgy association (skBiom)Mr. Josef ViglaskyEmail: [email protected]: +421 (0)45 5206 875Website: www.skbiom.sk

swEDisH BioEnErgy association (svEBio)Mrs. Lena DahlmanEmail: [email protected]: +46 (0) 8 441 70 83Website: www.aebiom.org

Consulting PartnersEclarEon consultantsMr. Christian GrundnerEmail: [email protected]: +49 (0)30 246 286 93Website: www.aebiom.org

impErial collEgE for sciEncE, mEDicinE anD tEcHnology (icEpt)Mr. Arturo Castillo-Castillo; Email: [email protected],Phone: +44 (0)20 7594 7312 Website: www3.imperial.ac.uk

austrian Biomass association (aBa)Mr. Christoph RosenbergerEmail: [email protected]: +43 (0) 1533 07 97/25Website: www.biomasseverband.at

BioEnErgy association of finlanD (finBio)Mrs. Mia SavolainenEmail: [email protected]: +358 40 7182026Website: www.finbioenergy.fi

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