Thursday, 23 September 2021
On 17 September 2021, the European Biogas Association (EBA) held an info session on the implications of the recent EC Fit for 55 package on biogas. The content covered biogas and biomethane production, trading and application in heating and transport.
Susanna Pflüger, EBA Secretary-General and event chairperson set the scene for the 90 min session using a Frans Timmermans (EC Executive Vice President, European Green Deal) quote from July regarding the Fit for 55 package:
'Current tools do not deliver enough to reach 5% reduction of greenhouse gas emissions in 2030. We need real incentives for change and we need to generate the revenues to seriously invest in that change.'
Marco Giacomazzi of the EBA then discussed the impact of the RED (Renewable Energy Directive) and ETS (Emissions Trading Scheme) changes concerning biomethane/biogas production and trading. On the RED changes, sustainability criteria have been extended to biogas production above 2 MW (unchanged) and 200 m3/h for biomethane (previously not explicitly stated). Primary forest biomass, a possible biomethane feedstock, has also been banned.
On the ETS side, the EC has proposed an Innovation Fund (200 million Euros) for low carbon technology and will ensure tax revenues not attributed to the EU must be used for carbon-related purposes. To ensure vulnerable regions (fossil fuel dependent, low-income areas) are not overburdened by the ETS, The Modernisation Fund has been established.
Talks from industry and EBA representatives for the transport, trading and heating sectors followed.
James Cogan of Ethanol Europe, a biofuel provider adopted a cautious tone on recent announcements. James opined that the new single count 2.2% advanced biofuel goal would be mostly fulfilled by biomethane, given that advanced liquid biofuel capacity is lacking and unlikely to ramp quickly. Furthermore, James took a more amenable approach on crop fuels, noting supply limitations with waste, still recognising safeguards should be in place for sustainability concerns and that crop-based fuels were still preferable to fossil fuels.
Wojciech Winkler gave a brief overview of STX (trading house) activities in biomethane, looking at the interaction between the ETS and RED, with the RED stipulations effectively increasing the price of carbon beyond the visible ETS price. They also identified strengths and opportunities for biogas and biomethane in the market, including EU level funding for green activities via Carbon Contracts for Difference (CCfDs) as well as the Carbon Border Adjustment Mechanism (CBAM), and future opportunities for sector coupling.
Anthony Lorin of the EBA discussed the impact of the Fit for 55 package on biogas/biomethane for heating applications, highlighting the annual increase in renewable share (1.5%, from 1.3%) in the RED, the scope of the EED (Energy Efficiency Directive) being extended to all public bodies and a 40% reduction in building emissions (currently a non-ETS sector). He also highlighted how the tools to be used to achieve targeted reductions can be classified into pricing/market mechanisms or rules/regulations.
Overall, the session provided prudent information on the way forward for biogas in Europe - the Fit for 55 packages offering many opportunities for biogas (including lower tax rates), but with some notable weaknesses such as the vehicle combustion engine ban (2035).
The next year, a consultation period for many EC initiatives will prove critical. The EBA can exert their influence via working groups, discussions and publications to ensure biogas and biomethane receive fair treatment as renewable fuels heading to 2030 and beyond.
The presentations and materials are available to EBA members. For more information on the event or the association, please visit their website.