French government offers €100m of incentives for biomethane
The French government said this week that it will provide €100 million to encourage investment in biomethane so that renewable gas can meet a targeted 10% of overall gas consumption by 2030.
In one of the biggest pushes in an EU member state to promote the use of biomethane, the French government said the €100m would help deliver 30TWh of biomethane by the end of the next decade, with 80% of the feedstock expected to come from French farms and the remainder generated from wastewater and household/municipal waste.
A white paper published by the French government earlier this month laid out several requirements that would be needed to roll out biomethane on a larger scale, including completion of the current support mechanism so it reaches maturity; a strengthening of investor confidence, reducing red tape for project developers, integration of renewable gas into the grid and greater public promotion of biomethane as a renewable fuel.
France’s biomethane capacity ranks far below that of Germany and the UK, and at the end of 2017 French production sites numbered 44, with that number expected to rise to 100 by the end of 2018, according to France Biométhane, a think tank.
The EU has around 500 biomethane projects, according to the European Biogas Association, meaning that France is majorly under-represented in view of its large agricultural sector.
A December 2017 study carried out by France’s Office of Energy Transition identified Grand Est, Hauts-de-France and Ile-de-France regions are the most active regions with most biogas plants, producing 54% of overall injections by the end of last year.
Incentives
France increased its incentives for biogas in 2015 as the country moved to adopt the Energy Transition for Green Growth, which aims to cut France’s greenhouse gas emissions by 40% between 1990 and 2030, to halve the country’s energy usage by 2050, and to bring the share of renewables up to 32% of the energy mix.
Facilities with capacities of more than 300kWe can claim €16.5 per MWhe, while those with a capacity under 80kWe are entitled to €18/MWhe with a varying level of subsidy for facilities falling between these two points.
Under that pricing structure, a 300kWh biogas plant processing manure from a herd of 200 cows would increase its income bybetween €40,000 to €50,000, Segelene Royal, France's environment minister in 2015, estimated at the time.
Bureaucracy
But farmers have said that uptake of the scheme has been excessively complex and bureaucratic.
France Biométhane said that beyond what has been laid out in the white paper, the government should create biomethane-specific guaranteed funds to strengthen investor confidence by harnessing the expertise of France’s Banque Publique d'Investissement (BPI) and Caisse des Dépôts.
The think tank added that a debt fund for biomethane projects should be set up that would enable non-agricultural methane projects to be exempted from a property tax.
Income stream
The move isn't just about helping France meet its climate and energy targets.
The French government hopes that biomethane will generate an important income stream for farmers who have been adversely affected by falling prices for crops, tight margins on dairy products and the expected negative impacts of the imminent renegotiation of the EU's Common Agricultural Policy.
The announcement of the €100 million in state funding for biomethane came as French President Emmanuel Macron this week attended France's biggest annual agricultural show, at which falling farm incomes was a major theme.