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Biomethane on the move - Germany approved to support green bus technology

Wednesday, 08 September 2021

On 7 September 2021, the European Commission (EC) agreed to allow the German government to promote alternative bus technologies and infrastructure to the tune of 1.75 billion euros. This also includes Renewable Natural Gas (RNG) powered buses and infrastructure.

The EC ruled that the proposed support was in line with EU state rules. The support will be provided via the German Reconstruction and Resilience Facility (RRF), which was approved and adopted by the EC in June.

The support will come in the form of grants, awarded via open tenders. The grants will cover the purchase and deployment of buses utilising fuel-cell, electric battery and biomethane technologies. Infrastructure will also be covered, including renewable refuelling stations.

The support aligns well with the European Green Deal, targeting emissions in the transport sector (where emission reductions have seen limited progress in recent years). Price caps will be implemented for the purchases of buses and per project, with aid quotas of up to 80%.

The funding sought for green public transport has increased significantly, acknowledging the expense associated with renewable technology vehicles. For comparison, in 2018 Germany sought to provide only 70 million Euros of relief for electric buses and infrastructure investment.

What does this mean for biomethane and associated certificates in Germany?

While the nearly two billion Euro fund covers a range of technology, biomethane is in an ideal position to compete with electric battery technology as well as nascent fuel cell technology.

The announcement will likely result in growing RNG bus fleets and with this an increase in demand for biomethane certificates. However, without clear price signals and/or direct support for biomethane production it is unlikely to have a similar effect on biomethane supply, particularly within Germany.

Transport fuels represented the second-largest sector demand for biomethane certificates in Germany in 2019 at 700 GWh, a distant second after electricity generation (biomethane-fuelled generation is eligible for EEG subsidies). Given the limited supply of biomethane certificates in Germany, the funding decision is likely to add upward pressure on certificate prices in all sectors.

Greenfact covers biomethane certificate markets in Europe, including the German market, offering pricing data as well as industry/legislative updates. Get in contact with us to find out more!


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European Commission press release (in German)