Italy's €4.7bn biomethane-to-CNG scheme to launch in June

Italy’s government will launch its €4.7 billion ($5.8 billion) biomethane in road transport scheme by early June in a bid to drive transport emissions down, the civil servant in charge of the scheme told Energy Census.

The highly-anticipated scheme, which will run from 2018-2032, will involve the construction of a network to supply 1.1 billion cubic metres a year of renewable gas into transport.

The investment will be borne by the private sector, through which companies that supply gas at fuel stations will be obliged to use fuel produced from biomethane.

In return, these fuel suppliers will be issued with ‘white certificates’ by the Italian government, which guarantee that a specified amount of energy savings has been achieved and which will have a monetary value.

“These white certificates will be issued for compliance only and there will be no secondary market,” said Giovanni Perrella, a senior energy advisor to Italy’s Ministry of Economic Development.

The government will withdraw white certificates at a fixed price of €375 for the first 10 years, which would enable companies to set up supply chains for the sector.

The Italian government signed decrees on 2 March to authorise the scheme following clearance by the EU's Competition Commissioner, and will take 90 days to become law. 

The first plant to produce biomethane for compressed natural gas (CNG) for use in road transport is expected to come online this year, but as a whole plants will have to be up and running by 2022 in order to claim credits for supplying biomethane, Perrella said.

Through the scheme, Italy is aiming to switch 1.1 billion cubic metres of gas consumed in road transport from fossil fuel-based sources to feedstocks secured from municipal waste via waste-to-energy and anaerobic digestion to produce gas from animal waste.

Transport fuel retailers will be required to finance the Italian scheme and are obliged by law to include a certain percentage of advanced biofuels and biomethane in their fuel blends.

The switch would help Italy to meet its decarbonisation targets for road transport, and at the same time use supplies of fossil fuel-derived gas to generate heat and power and replace old coal- and oil-fired power stations that have been retired to meet EU clean air and greenhouse targets.

The initiative is also an attempt to raise the threshold of advanced biofuels in Italy's energy for transport mix. 

Consorzio Italiano Biogas points out the production of biomethane will provide jobs and new income streams for farmers and at the same time reduce Italy's reliance on first generation biofuels, which involves the use of domestic food crops or imported biodiesel or feedstocks such as palm oil. 

EU's biggest market

Italy’s gas grid operator Snam has undertaken to spend €150 million to build 300 new gas fuelling stations to augment the country’s existing 1,100 fuel stations and aim for a more even distribution of the fuel across the country.

Italy is the EU’s biggest market for natural gas-fuelled cars, with around 1.1 million of these vehicles currently on Italy’s roads.

Snam says that compared with fossil fuels, CNG vehicles cut CO2 emissions by 40%, nitrogen oxides by 94% and particulate matter by about 95%.