CROATIAN ROADMAP FOR THE FURTHER DEVELOPMENT OF THE BIOMETHANE SECTOR

Transcription

1 CROATIAN ROADMAP FOR THE FURTHER DEVELOPMENT OF THE BIOMETHANE SECTOR October 2013 The sole responsibility for the content of this publication lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the EACI nor the European Commission are responsible for any use that may be made of the information contained therein.

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3 CROATIAN ROADMAP FOR THE FURTHER DEVELOPMENT OF THE BIOMETHANE SECTOR This publication has been created within the project GreenGasGrids supported by the Intelligent Energy Europe programme (contract number IEE/10/235/S ). Authors: Robert Fabek, Vlatka Kos Grabar Contact: Energy Institut Hrvoje Požar Savska cesta Zagreb, Hrvatska 3

4 THE GREENGASGRIDS PROJECT PARTNERS German Energy Agency - dena (Germany) Fraunhofer UMSICHT (Germany) Austrian Energy Agency (Austria) Energetski Institut Hrvoje Požar -EIHP (Croatia) Agence de l Environnement et de la Maîtrise de l Energie - ADEME (France) Renewable Energy Agency REA (UK) University Szdeged (Hungary) European Biogas Association Consorzio Italiano Biogas (Italy) Agentschap NL (The Netherlans) Krajowa Agencja Poszanowania Energii KAPE (Poland) Slovenská Inovacná Eneregetická Agentúra - SIEA (Slovakia) Natural Gas Vehicle Association - NGVA 4

5 TABLE OF CONTENTS Table of Contents Introduction Production of biogas and biomethane in Croatia Potential of biomethane production Waste Sewage Sludge Agricultural Manure Wastes Food and Drink Waste Non-waste (energy crops) Comparison of biomethane potential and consumption of natural gas The potential role of public bodies Support measures Status Quo Recommendations Technical standards Status quo Recommendations Barriers for the development of biomethane market Summary

6 1. INTRODUCTION GreenGasGrids is a 3-year European project funded by the Intelligent Energy for Europe (IEE) programme with the aim to boost the European biomethane market. The project will run until mid of 2014 and is co-ordinated by the German Energy Agency dena. The project s consortium consists of 13 European partners, including national energy agencies, scientific institutions as well as industry associations involved in biomethane, natural gas and renewable energy. The purpose of the Croatian ROADMAP is to briefly describe the necessary tasks to be fulfilled starting with the characterisation of the current situation in the process which is regarded as crucial for the further reasonable development of the Croatian biomethane sector. 6

7 2. PRODUCTION OF BIOGAS AND BIOMETHANE IN CROATIA The biogas market in Croatia is in its beginning stages. Investors are mainly in feasibility and pre-feseability stages of a project development for the biogas. There is no biogas upgrading plants for biomethane production. At the moment, in Croatia there are 12 operating biogas plants (Table 2.1), i.e.; 1 landfill gas plant (2 MWel), 2 waste water treatment plant (3 MWel) and 9 agricultural biogas plants of (8.1 MWel). In addition to the listed plants, there are about 60 biogas plants pending for a permit for gaining the status of privileged producer. All these biogas projects primarily focus on electricity generation. There is no biogas upgrading plants for biomethane production. Table 2.1 Biogas plants in Croatia Plant Location Power (HROTE), kw Landfill Jakuševac City of Zagreb 2000 Waste water treatment plant Zagreb Biogas plant Tomašanci 2 Biogas plant Ivankovo 2 Biogas plant Ivankovo City of Zagreb 3000 Osijek-Baranja County Gorjani 1000 Vukovar-Syrmia County Ivankovo 1000 Vukovar-Syrmia County Ivankovo 1000 Biogas plant Tomašanci Osijek-Baranja County Gorjani 1000 Biogas plant within the chicken Rosulje Biogas plant Mala Branjevina 1 Biogas plant Mala Branjevina 2 Sisak-Moslavina County Dvor 135 Osijek-Baranja County Vuka 1000 Osijek-Baranja County Vuka 1000 LANDIA Gradina Vukovar-Syrmia County Tordinci 1000 Biogas plant Gradec Zagreb County Gradec 1000 Waste water treatment Karlovac Karlovac County Not available From the total number of biogas plants, nine of them are using agricultural products as a feedstock, two of them are using sewage sludge, while one biogas plant operates on landfill gas. 7

8 3. POTENTIAL OF BIOMETHANE PRODUCTION Significant quantities of feedstock such as animal manure, slurry, crop residues, organic fraction of sludge produced from waste water treatment, organic waste from the dairy and food processing industries, food industries and households can be used in the production of biogas. Roughly, we could differentiate the feedstock obtained in agricultural production and the other organic waste. By-products of agricultural production Animal manure and slurry quantitatively are the most represented by-products in the agricultural sector and traditional feedstock for biogas production. Their use in the production of biogas reduces greenhouse gas emissions and gets quality organic fertilizer to improve soil quality. As a disadvantage of this feedstock in comparison with organic waste and energy crops is stated a significantly lower energy value. For this reason, a larger volume of the reactor and the investment cost per kwh are needed, than in the case of production from feedstock with higher energy value. Energy crops can be cultivated specifically for the production of biogas. Crops with high yield as corn, beets, potatoes and grass silage can also be used as a substrate in the process of AD. Mixing of energy crops with slurry from farms is a common practice in order to increase yields and process stabilization. Cultivation of plants for biogas production allows farmers earning extra income. In periods of rich yields when there is a surplus of agricultural products, or in case of bad weather when the products are not of adequate quality to be used for food, crops however can be used in the biogas production. Other organic waste Other waste, by which a biomass for biogas production is obtaining, are an organic part of municipal waste, sewage sludge produced by treatment of wastewater, slaughterhouse waste and waste from supermarkets such as meat and other food products with expired shelf life. Before the process of anaerobic digestion, the waste collected from the food processing industry, from markets and supermarkets as well as municipal waste must be processed and separated from impurities such as plastic or remnants of packaging products. Therefore, this process is different from the anaerobic digestion which uses as a feedstock an agricultural biomass or sewage sludge. Remains of animal origin require special control, so therefore the rules of procedure and exploitation of animal by-products are prescribed. In this case, a careful managing and appropriate technology of biogas plant is necessary. Sewage sludge refers to the residues resulting from treatment of wastewater. Anaerobic digestion is a very effective technology for this type of waste as it reduces the volume and volatility of sludge. After checking whether it contains toxic elements, the residue of digestate can be transported to landfills or used as fertilizer for plants in landscaping. 8

9 Below in this material, the potential of biogas/biomethane production in Croatia has been determined, according to the type of used feedstock. Feedstock are divided into several categories: sewage sludge, agricultural manure wastes, food and drink waste (waste) and crops (non-waste), and an estimation of the potential for 2020 th year has been made. 3.1 WASTE Croatia generates plenty of agricultural manure and food waste material each year, capable of producing considerable amounts of methane gas. The main sources of waste feedstocks for AD are food and drink waste, sewage sludge, animal slurries and solid manures (agricultural wastes) SEWAGE SLUDGE Currently, there are 2 operating plants for biogas production linked to the plants for waste water treatment in Croatia. According to the data from the Statistical Yearbook of the Republic of Croatia 2012 th, in the year 2011 th the amount of wastewater from the public sewer was million m 3, while in the period until year 2020 an increase of 30% is expected. The purification of only one third of the total amount of wastewaters gives a potential of 11.1 x 10 6 m 3 of biogas, respectively a potential of 5.1 x 10 6 m 3 of biomethane (Table 3.1). Table 3.1 Biogas and biomethane potential (by 2020) of sewage sludge capacities Feedstock Total amount of waste water (2020) Potential feedstock for biogas production Potential of biogas production Potential of biomethane production Sewage sludge 445 x 10 6 m x 10 6 m x 10 6 m GWh 5.1 x 10 6 m GWh Source: EIHP AGRICULTURAL MANURE WASTES From the available data on the number of cattle, pigs and poultry, it was estimated what share of the total number could be used in the production of biogas and biomethane. Namely, into account were taken farms with a larger number of animals (more than 100 cattle, more than 1,000 pigs and more than 50,000 chickens per round), since small farms alone cannot produce enough material for one biogas plant. But there is also the possibility of merging of farms in a particular area, and thus it may be taken into account the resources generated by small farms. In this case, the total potential would be greater. Here in this material a real view of the current situation is presented, without assumptions about the merging and other actions that could be taken in the future in order to increase production. The assumption for the period until year 2020 is that the total amount of cattle will be equal to the amount that is grown today, but it will largely come down to the consolidation of 9

10 farms, that will reduce the number of small family farms and increase the number of large farms. Therefore, the number of cattle potential for biogas production will be increased. The potential of biogas production from manure, pig slurry and poultry manure is estimated at x 10 6 m 3, while the potential of biomethane production is 84.9 x 10 6 m 3 (Table 3.2). Table 3.2 Biogas and biomethane potential from agricultural manure wastes by 2020 Feedstock Potential feedstock for biogas production Potential of biogas production Potential of biomethane production Cowshed and pig manure 23% of cowshed and pig manure x 10 6 m 3 1,161 GWh 82.6 x 10 6 m GWh Chicken and poultry manure 30 % of Chicken and poultry manure 10.9 x 10 6 m 3 67 GWh 2.3 x 10 6 m 3 22 GWh Total x 10 6 m 3 1,228 GWh 84.9 x 10 6 m GWh Source: EIHP FOOD AND DRINK WASTE According to the Waste Management Plan of the Republic of Croatia for the period , it was made an estimation of the amount of municipal waste in the year Since the share of biodegradable waste in the total amount of municipal waste is 28-40% (in the calculation the estimation of 30% was used), it gives the sum of 520,000 t of organic components of municipal waste. According to this plan, it was set a goal that by 2020 the share of biodegradable municipal waste disposed to landfill must be reduced to 35% by weight of biodegradable municipal waste that was produced in 1997 th year. With these conditions the potential of biomethane produced from this resource is 24.8 x 10 6 m 3. Table 3.3 Biogas and biomethane potential of food and drink waste by 2020 Feedstock Tons of municipal waste Organic part of waste Potential of biogas production Potential of biomethane production Municipal waste 1.72 x 10 6 t 0.52 x 10 6 t 41.4 x 10 6 m GWh 24.8 x 10 6 m GWh Organic slaughter-house and meat processing waste 145,200 t 6.4 x 10 6 m 3 36 GWh 3.8 x 10 6 m 3 36 GWh Total 47.7 x 10 6 m GWh 28.7 x 10 6 m GWh Source: EIHP 10

11 When determining the total potential, the animal by-products were taken into account, which includes slaughter-house waste and meat of expired shelf life. The management of this kind of waste is regulated by the Ordinance on the treatment of animal carcasses and animal waste and on their disposal. The estimated potential of biomethane production from this raw material is 3.8 x 10 6 m NON-WASTE (ENERGY CROPS) It is estimated that in Croatia there are about 800,000 ha of uncultivated land which is a significant potential for the production of energy crops. In order to determine the potential of biomethane production, it is estimated that it could be assigned to predefined farms that are potential producers of biogas, approximately 49,500 ha of agricultural land in 2020 year, which can be used for the production of energy crops. On this basis, the potential biomethane production from energy crops (in the 2020 th year) is 63.3 x 10 6 m 3. Table 3.4 Biogas and biomethane potential of energy crops by 2020 Feedstock Area (ha) Potential of biogas production Potential of biomethane production Energy crops 49, x 10 6 m GWh 63.3 x 10 6 m GWh Source: EIHP The total potential of biogas production determined according to the criteria related to each type of feedstock is x 10 6 m 3 or 2,421 GWh. The estimated potential biomethane production is lower by about 30% compared to the total production of biogas and it is 182x10 6 m 3 (1,720 GWh). It is assumed that the remaining biogas in the amount of 700 GWh will be used to produce electricity and heat, because of the small amount of the individual localities its treatment to the level of biomethane would not be economically feasible. Table 3.5 Total biogas and biomethane potential in Croatia by 2020 Potential of biogas production Potential of biomethane production x 10 6 m 3 2,421 GWh 182 x 10 6 m 3 1,720 GWh Source: EIHP 11

12 4. COMPARISON OF BIOMETHANE POTENTIAL AND CONSUMPTION OF NATURAL GAS With the production of biomethane and its use through the existing natural gas pipeline network would reduce the need for imports of natural gas, since Croatia does not produce sufficient quantities of natural gas for its own needs. For the 2020 th year the potential of 182x10 6 m 3 biomethane is calculated. The total consumption of natural gas in Croatia in recent years is about 3.2x10 6 m 3. Thus, while retaining of the existing natural gas consumption, the share of biomethane in the total consumption of natural gas would amount around 5.7%. If we consider only the natural gas consumption in households in the amount of 670x10 6 m 3, the percentage of biomethane would be around 27.2%. The results are shown in Table 4.1. Table 4.1 Share of biomethane in the total consumption of natural gas in the year 2020 Total consumption of natural gas 3,165 x 10 6 m 3 Consumption of natural gas in households sector 670 x 10 6 m 3 Biomethane potential x 10 6 m 3 Share of biomethane in total consumption of natural gas 5.7% Share of biomethane in consumption of household sector 27.2% 12

13 5. THE POTENTIAL ROLE OF PUBLIC BODIES In the Croatian legislation biogas is explicitly mentioned in more than 20 legislative documents for which implementation are responsible various institutions. The most important legislation of the Republic of Croatia in the field of energy, environmental protection and agriculture are listed below in Table 5.1. Table 5.1 Legislation related to biogas and biomethane Energy Environmental protection Agriculture Energy Act (Official Gazette 120/12) Waste Act (Official Gazette 178/04,111/06) Ordinance on good agricultural practice in the use of fertilizers (Official Gazette 56/08) Directive 2009/28/EZ Energy Development Strategy of Republic of Croatia (Official Gazette 130/09) Waste Management Strategy of Republic of Croatia (Official Gazette 130/05) Waste Management plan for Republic of Croatia for a period (Official Gazette 85/07) Regulation on animal byproducts not intended for human consumption (Official Gazette 87/09) Gas Market Act (Official Gazette 28/13) The Landfill Directive 1999/31/EZ Network rules for gas distribution system (NN 50/09) The Waste Framework Directive WFD (2008/98/EZ) General terms for the natural gas supply (Official Gazette 43/09, 87/12) Act on Biofuels for transport (Official Gazette 65/09, 145/10, 26/11, 144/12) Regulation on the quality of biofuels (Official Gazette 141/05) The EU institutions and governments carried out a lot of policies, scenarios and roadmaps related to biomethane, so a lot of acts, rules and directives are taken from these documents and adjusted to the Croatian legislation. The current European energy policy framework is summarised in the three headline targets to be achieved by 2020: o an EU based target for GHG emission reductions of 20% relative to emissions in 1990; o a 20% share for renewable energy sources in the energy consumed in the EU with specific target for the Member States; 13

14 o 20% savings in energy consumption compared to projections. In addition, there are specific 2020 targets for renewable energy for the transport sector (10%) and decarbonisation of transport fuels (6%). The National Renewable Energy Action Plans provided by the governments of the member states should ensure reaching those targets on EU level. However, the Green Paper 1 A 2030 framework for climate and energy policies draws attention to the need for new measures in most Member States to achieve their 2020 targets reflecting the scaling back of support schemes and more difficult access to finance in the context of the economic crisis. The Green Paper 2 does not confirm the 30% renewable energy share as target for 2030, instead it states: A 2030 target for renewables would have to be carefully considered as many renewables sources of energy in this time frame will no longer be in their infancy and will be competing increasingly with other low-carbon technologies. Any target or policy for renewables will have to take into account the growing evidence-base on sustainability, costs, the state of maturity of technologies and its innovation potential. From the above recommendations it can be concluded that Croatia should pay more attention to biogas and biomethane because researches show that there exist significant potential of these energy sources which can play an important role in achieving EU targets. The most important thing for biogas/biomethane producers, technology developers and equipment manufacturers is a reliable policy environment. Biogas/biomethane investors require stable conditions for more than a decade otherwise these capacities will not be built and operated. It means that the support/incentive scheme valid at the time of construction and commissioning must not be changed negatively during the lifetime of the projects. At national levels, only a few EU Member States have set explicit targets for biomethane. In Croatia the development of biomethane sector is still in its beginning stages. Generally it can be said that there are three key issues in the development of biomethane market in Croatia: 1. Is there an appropriate legislation that allows smooth and efficient establishment of biomethane production? 2. Are there quality financial support mechanisms for the production of biomethane? 3. Is the issue of connection to the gas network resolved appropriately? A key role in the development of the biomethane market have policymakers who are, by resolving of above issues, able to create the pre-conditions that will allow investment in biomethane production and its use through the natural gas network. 1 [COM (2013) 169] 2 [COM (2013) 169] 14

15 6. SUPPORT MEASURES One of the important achievements of EU institutions with respect to RES development was the adoption of EU-wide targets for RES development. Since EU-MS have been reluctant to authorize the EU to use strict measures for enforcement of RES targets, it was agreed on that member states submit national action plans (NAPs) to the European Commission (EC). EC reserves the right to initiate the needed processes against those EU-MS whose action plan does not fulfill the requirements. Another major achievement was the introduction of a new EU-wide instrument guarantees of origin (GoOs) for electricity generated from renewable sources. Basically a GoO displays the location, technology and time when a given power block was produced from renewable sources, thus this instrument allows power producers to demonstrate that their power was generated by using (sustainable) renewable sources. Mainly the GoOs have been used to prove the origin of renewable power related to the disclosure of the mix of fuels used by electricity providers. Since the GoO plays an informational role and does not represent a separate tradable good, it is deemed to follow trades in electricity. The EU-MS have implemented exclusively on a national level their RES support schemes, rather than an EU-wide level. Consequently a broad variety of incentive schemes have been deployed in different countries. The dominant measures being used are: Feed-in-tariffs, which provide a fixed price which is above the market price; Quota-based systems, which use tradable green certificates in order to incentivise RES investments; Investment incentives. The Renewable Energy Directive (RED) sets out the sustainability criteria for biofuels and bioliquids which apply across the European Union. Use of another additional criteria by Member States is not allowed. Biomethane used as transportation fuel falls directly under these stipulations. All biofuels and bioliquids produced within the EU must comply with the sustainability criteria specified in the RED in order to receive government support or count towards mandatory national renewable energy targets. The set of sustainability criteria aims to promote (vehicle fuel designated) biomethane production in a sustainable form by focusing on several key areas: Reduction in GHG emissions; Biodiversity; Land of high carbon stock. 15

16 6.1 STATUS QUO In Croatia, the most important supporting schemes are as following: fixed feed in tariff scheme for RES according to the Croatian Electricity Act; national grants from the Fund for Environmental protection and Energy efficiency. In October 2010 the government adopted the National Renewable Energy Action Plan, as foreseen under the new EU Renewable Energy Directive. Support system for production of electricity from renewable energy sources started in 2007 when Croatia introduced the Tariff system for the production of electricity from renewable energy sources and cogeneration (OG 63/12, 121/12, 144/12). In Croatia, there are no feed-in tariffs for production of biomethane, but there is a feed-in tariff scheme for electricity produced from biogas. Depending on size of plant these feed-in tariffs for biogas generated from agricultural substrates and biowaste range from 1.12 HRK / kwh to 1.42 HRK / kwh which equals about 15 cent / kwh to 19 cent / kwh. For landfill and sewage gas the remuneration is equal to the average electricity production price at the time of the contract. The feed-in tariffs are granted for a period of 14 years. Investment Incentives In general, investment incentives can be provided as: Investment subsidies as direct capital investment subsidies per kw of rated capacity or as a percentage of the investment cost. Basically such an approach is relatively simple and a very straight forwarded incentive. On the other hand such direct capital investment subsidies are prone to abuse, thus a strict monitoring is indispensable; Investment tax credits serve to lower capital costs by allowing reduction of taxes of investors (reduction of the basis to be taxed by deduction (of parts) of the investment from the basis to be taxed). Such systems might be supportive but are prone to maximization of tax shelter of the investors instead of achieving electricity production. In addition such a system is not transparent, which could lead to increased complexity and reduction of effectiveness; Other incentives might be import duty exemptions. Like with all investment incentives, there is a risk that parts of the incentive might be captured by equipment vendors through higher prices. 6.2 RECOMMENDATIONS In the prevailing situation the markets seem to be strictly national in the sense of support granted to domestic production only. In order to support trade, in particular cross border trade - thus potentially providing a real boost to the biomethane sector, it is recognised that an efficient system of issuing, registration, handing and cancelling tradable biomethane certificates is needed enabling recognition of these certificates in each participating European country. Of course double counting shall be excluded 3. 3 Source: Green Gas Grids, Wellinger A., Kovacs A., Baldwin J. Mezullo W.; Discussion Paper on Biomethane Focus Issues: Sustainability, Technical Standards, Trade and Country Targets, p.25 Jan

17 Therefore, there is a clear need to clearly differentiate between tradable certificates (documents having their own inherent market value, which can be sold, purchased, trade independently from the product itself, like the EECS green electricity certificates) from documents which serve as a proof of origin or other quality for a product but do not have its own market value. Taking this interpretation as a basis, no Biomethane Certificate issuing and trading system has been established in Europe so far 4. Based on the results of the Green Gas Grids project it is recommended to encourage the establishment of national biomethane registries in every participating country and to strongly support the wide cooperation and harmonisation among those national registries at this stage instead of promoting the establishment of a central European Biomethane Registry currently 5. The broad cooperation and coordination among national biomethane registries will be the first important steps towards creating the conditions for a free cross-border biomethane trade in Europe. For developing the cross-border biomethane trade it is important that the imported biomethane is treated the same way as the biomethane produced domestically. Any kind of support provided for a locally produced biomethane (FIT, tax, benefit, etc.) should also be provided to biomethane imported from another EU Member State in the same way and extent. Certainly, the imported biomethane should carry all necessary attributes and be confirmed by the competent national registry. The most important thing is that the double support and double counting are excluded. Having said this, there is a strong need for supportive actions within the process of further development of national biomethane registries and in the long run in the creation of a Europe wide Biomethane Certificate Trade System. Such backing should be provided by: National politicians; National biogas/biomethane associations; Regulatory authorities in case they determine at least partially the framework for investment incentives; Relevant ministries within their tasks and competences; European Commission via a request of Austria for extension of the GreenGasGrids Project or by means of a successor project which is going to continue to pursuing such goals. 4 Source: Green Gas Grids, Kovacs A.; Working Group on Biomethane Trade Discussion Paper #2. p 3 March Source: Green Gas Grids, Kovacs A.; Working Group on Biomethane Trade Discussion Paper 2. p 7 March

18 7. TECHNICAL STANDARDS Similar to the need to harmonise national registries looking into documents which serve as a proof of origin or other quality for a product but do not have its own market value, there is also a strong need to harmonise the technical standards in order to be able to use biomethane, the qualities of which are to be find in a pre-set range, all over Europe. This postulation is in particular valid in the transport sector in general and in particular for trucks having the proposal of the directive dealing with infrastructure for alternative fuels in mind. 7.1 STATUS QUO Within the framework of the Green Gas Grids project, a working group deals with the harmonisation of technical standards in the biomethane sector. To reach its goals, the working group focuses on the following topics: Entry specification for gas grid (key issues such as Oxygen, Siloxanes and CV); What gas quality parameters are monitored and how often (continuous or spot); Standards for injection related plant; Differences in Member States; Grid capacity/compression, responsibilities; Efficiency of upgrading (methane losses, energy consumption). Although significant progress was achieved in the meantime, a number of points are still open for discussion either because reliable data are still to be compiled or because the relevant data are not available yet and must be part of future research projects 6 : Sulphur; Siloxanes; Trace components that may (or can) have an effect on health; Exposure models for these trace components; Oxygen; Hydrogen; Methane number (parameter linked to the risk of knocking in engines, cf. octane number for liquid fuels); Technical standards for biomethane and natural gas in Croatia The Croatian Gas Act (OG 40/07) and successive amendments establishes rules and measures for performing energy-related activities in the natural gas sector, including liquefied natural gas (hereinafter: LNG), rights and obligations of the gas market participants, unbundling of activities of the system operators, the third party access to the natural gas system and the natural gas (hereinafter: gas) market opening. The rules established by this Act and the regulations brought pursuant to this Act apply also to biogas, 6 Source: Green Gas Grids, Wellinger A., Standards for biomethane as vehicle fuel and for injection into the natural gas grid, March 2013, p

19 gas from biomass and other types of gas in so far as such gases can be technically and safely transmitted with gas through the gas system. In the distribution system conditions, the quality requirements and possible integration points relevant to the integration and transport of biogenic gases must be determined. The distribution system operator charges the plant operator those expenses incurred through the initial establishment of the connection of the biogas plant to the distribution grid in the form of a grid access fee. These costs should be entirely born by the biogas suppliers. Requirements for gas quality The quality requirements for natural gas are specified in the Network Rules for access to the transmission pipeline system (Official Gazette 126/03), but there are no mention of biogas quality requirements. The grid operator determines the minimum quality requirements of biogas for safe operation. General conditions for the integration of biogas in the grid network are established but there are not specific technical rules or priority grid access for biogenic gases. Legislation does not poses restrictions for injection of biomethane in the grid system neither regarding the feedstock origin of biogas neither regarding blending of offspec biogas (which is purified, but contains high CO 2-share) with natural gas in the grid if the gas-mixture is fully compatible with natural gas requirement. Maximum content of the propane and higher hydrocarbons is 6% in order to adjust biomethane to become on-spec (i.e. fully compatible with natural gas). No different standards for grid injection and for vehicle fuel usage are envisaged. The quality requirements for biogas are the same as the requirements for natural gas. 7.2 RECOMMENDATIONS It is recommended to follow further the harmonisation process on the EU level and to adopt the achievements in Croatia to pave the way for a broader application of biomethane, thus contributing to several well known socio economic benefits. To this effect, further support is needed in the mid and long term by: National biogas/biomethane associations via close collaboration with associations like the Natural Gas Vehicle Association (NGVA) or with car-/bus-/truck producers etc.; National standardization institutes via cooperation with the relevant institutions on EU-level; Relevant ministries within their tasks and competences; European Commission via a request of Croatia for extension of the GreenGasGrids Project or by means of a successor project which is going to continue to pursuing such goals. For better and more efficient use of biomethane from natural gas grid there are some other things that should be taken into consideration. First, an important factor in registering quantities of biomethane is mass-balance. In a mass balance system feed-in and withdrawal are recorded in the relevant registries and audited. 19

20 Under Directive 2009/28/EC Article 18 (1) ( Mass-balance ), a mass-balance system is defined as an electronic registry which is used to trace the chain of custody (injection trade offtake) of biomethane injected into the natural gas grid. Secondly, when the biomethane sector is developed to a certain level the apropriate gas infrastructure has to be prepared. Today, the network of gas filling stations and the amount of gas driven vehicles are not sufficient in most parts of Europe. The GGG Project partners welcome the measures proposed in the European Commission s Clean Power for Transport Package which aims at fostering the European gas infrastructure for transportation fuel application. The RED methodology for LCA was developed for calculating the GHG emissions from solid biomass and biogas used to generate heat and electricity, and covers every step from feedstock production through to energy generation. This enables biomethane producers and other stakeholders to analyse the life cycle emissions from bioenergy using different feedstocks, production processes and transport methods and to assess the emissions associated with biomethane production across the bio-energy lifecycle from cultivation to processing and grid injection. The application of this methodology in all Member States will: - help biomethane producers to report emissions consistently and fairly; - provide full compatibility with the RED for calculating GHG emissions; - enable full assessment of the performance of feedstocks for anaerobic digestion and SYNGAS technology in terms of targets for improving life cycle emissions. Unified European biomethane quality standards have a significant importance for industry. The two major benefits are that standards provide the necessary technical guidance for the companies developing the biogas upgrading (biomethane producing) technologies and that they strenghten the confidence of the biomethane customers. On the other hand, their application will also improve the trade and the use of biomethane. 20

21 8. BARRIERS FOR THE DEVELOPMENT OF BIOMETHANE MARKET In Croatia the benefits of biomethane injection into the gas grid are not taken into account and so far no financial support system has been implemented offering a framework which would make it for investors more predictable, reliable and give them granting the planning and investment security. This would support broader biomethane related market activities. So far the high costs of biomethane, especially of the raw gas, are a real barrier. Despite of some investment subsidies there is no long term investment security. There can however occure some barriers related to authorisation of a biogas/biomethane plant, such as long duration of procedure, unexpected surplus costs, etc. as occurs sometimes for biogas plants but till today no practical experience exists in Croatia on biogas upgrading. In general the competition with other utilization pathways, high up-front costs, low investment security, insecurity of feedstock availability and prices, low natural gas demand in summer in the wide-spread low pressure grids, lack of financial and political support and of information are the main barriers for biogas. 21

22 9. SUMMARY The production of biomethane and its subsequent injection into natural gas grids is of growing importance although still at a low level. The main reasons for this situation are that: There is no financial support system for biomethane production and injection to the grid; There is no financial support system for biomethane production and their usage as a motor fuel; There is no specific technical standard for biomethane; EU-wide harmonisation related to: o registries (and later on trade with certificates) and o technical standards is missing. These unfavourable aspects are currently the main barriers to gaining the benefits that can arise from the use of biomethane, namely the: Reduction of greenhouse gas emissions; Decrease of energy import dependency; Other socio economic aspects like: o Creation of sustainable jobs in the rural area; o Increased R&D activities in relation to the exploitation of the potential stemming from the so called 2 nd and 3 rd generation (gaseous) biofuels,; o Lowering of the regional import dependency; o Etc. To overcome these barriers, political support, more backing from the national regulatory authorities is needed and (subsequently) financial support for biomethane is necessary. Also, it is very important to increase the public awareness about this topic. The stakeholders (companies and non-governmental trade organisations) should strengthen their activity to ensure that the general public understands the importance of producing and using biomethane in every applications. The resistance of local population against erecting biogas/biomethane producing sites in the neighbourhood must be taken seriously and must be addressed in due time on course of developing the projects. 22

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