Biomethane trade status quo and perspectives. Jeni Fulton, Biogasrat + e.v.

Transcription

1 Biomethane trade status quo and perspectives Jeni Fulton, Biogasrat + e.v. +

2 Contents 1. Biomethane trade, status quo 1. EU support 2. Market developments to Next steps 2

3 Open and closed markets Open Closed Undefined Open: green attribute recognised, biomethane counted towards quota (fuel, CO2), foreign guarantee of origin recognised Closed: green property not recognised, problem mass-balance Undefined: no exports or experience as yet

4 Biomethane: markets Condition for export: Recognition of green property through importing country Counts towards national quotas Biomethane registry Currently: case-by-case basis Future: mutual recognition of registries, automatised process Markets: Fuel, fuel production (SE, FI, IT, NL, CZ, AT) Renewable gas (voluntary market):de, FR? Power production (NL) 4

5 Biomethane trade in the EU Current Near future Markets: Fuel, fuel production (SE, FI, IT, NL, CZ, AT) Green gas (voluntary sector): DE, FR, Power: NL

6 Trade - issues Hindrance Rampant protectionism in some countries (import restrictions in DE, AT, worrying tendency) Cancellation of DE-NL pilot project (economic reasons) Only Sweden, Luxemburg and Finland up and running Lack of cross-border regulation and methodology (including mass-balance) Double counting The issue of feedstocks (sustainability, CO2 emissions, definition of waste for double counting towards fuel quota targets) The EU isn t much help, despite highlighting the importance of effort sharing and cross-border trade (ACER/CEER conference, January 2013)... Large biomethane producer: we ve approached the EU about importing from ex-eu contries, but they re worried about abuse and quite sceptical Let s not talk about palm oil then! 6

7 EU issues CEER/ACER Annual conference (Jan 2013) Biogas generally does not enjoy preferential (subsidised/ feed-in) tariffs, as do other renewable sources in electricity. For this and other reasons (mainly relating to quality standards and the cost of quality homogenisation, with national differences playing a role) biogas still accounts for a very limited share of total injected gas in the EU as a whole. (CEER Annual report 2011) Marie Donelly, Head of Cabinet, Renewables, Research and Innovation, Energy Efficiency, DG Energy Biomethane insignificant at the moment, too small a market, and we don t really pay much attention to it. - Chicken and egg problem! 7

8 EU issues CEER/ACER Annual conference (Jan 2013) EU-Commissioner Oettinger: Cross-border trade and use of cooperation mechanisms is vital for the fulfilment of 2020 goals. Cross-border trade is to be encouraged (fulfillment of third energy package) The Commission will shortly publish guidelines on cooperation mechanisms between countries (e.g. UK-IRL Greenwire project) Guidelines for sustainability criteria for gaseous and solid biomass Hopefully this will clarify question of second vs first generation biofuel 8

9 Currently injected 9

10 Currently injected versus national targets mcm/annum National targets (indicative) currently injected National biomethane targets for 2020 and current injection levels, source: Biogasrat, based on biogas partnerships and its own research CH DK DE IT LU NL SE GB 10

11 But we need to get this sorted! Market developments are in the pipeline - RED/FQD to be amended in 2014 need to gain understanding of implications - Sustainability - Definition of waste (vital for double-counting, currently Germany only permits domestic waste-derived biofuel to be double-counted) - CO2 Emissions - ILUC Biomethane may benefit: - numerous large-scale second generation fuels projects underway (biomethane from wood residues) - manure, a major biomethane feedstock, is a second generation resource (double counting towards targets) 11

12 The renewed EU push for low carbon transport Proposal for a directive of alternative fuel transport infrastructure (Jan 2013) New, ambitious Commission targets for renewable transport (proposed directive (COM (2013) 18/2: Increase in electric, hybrid, hydrogen and CNG cars Compressed Natural Gas (CNG) 5% of the EU s vehicle fleet, or 10 million vehicles by 2020 Ten-fold increase from current levels. 10% of this volume is sourced from biomethane: of 94 bcm by 2020 Biomethane not explicitly mentioned Creates significant incentives for domestic biomethane producers to invest in production capacities, and also for non-eu producers interested in exporting into the biomethane market. The fuels market attractive for biomethane: 1 kg CNG retails at 1,015. equates to 7,8 ct/kwh. Or biomethane can be sold for the natural gas price ( 24/MWh approx.) plus the certificate buyout price ( 60/MWh in Germany). UK, eligible for an additional 20p/kg subsidy at the pump, bringing the total price to 9,59 ct/kwh (CNG price plus biomethane surcharge). 12

13 Realisation of CNG potential enormous potential market! Proposal for a directive of alternative fuel transport infrastructure (Jan 2013) Natural gas vehicle technology is mature for the broad market, with close to 1 million vehicles on the road in Europe and around 3,000 filling stations. CNG vehicles have low pollutant emissions and thus can be utilised to reduce PPM 10 pollution in urban areas. There are many pilot projects (e.g. GoBiGas) for public transport While CNG is economically viable, the sector as a whole is facing challenges Public intervention is necessary to avoid fragmented EU level markets and to enable EU-wide mobility for CNG vehicles, as to date, there is a lack of consistent, EU-wide structure. This requires mandatory minimum infrastructure coverage which is key for acceptance for these alternative fuels by the consumers (market uptake) and further development and deployment of the technology by industry. 13

14 Well-to-Wheel GHG emissions 14

15 Energy efficiency and land-use Gewichtsspez. Energiegehalt unterer Heizwert in MJ/kg Volumsspez. Energiegehalt unterer Heizwert in MJ/l

16 Realisation of CNG potential enormous potential market! Biomethane potential demand (vehicle fuel, 2012) versus currently injected, source Biogasrat+ l 10% admix - demand of 7,6 bcm pa. SE annual demand of approx 0,43 bcm, set against production of 18,5 mcm Shortfall of 8.6 bcm pa as EU total 16

17 And it gets worse to Biomethane production in 2020 increases strongly to a total of 18,76 bcm. figure only reflects countries with biomethane targets, which is the case only in DE, DK, FI, FR, NL, SE and UK. No targets:at, BE, CH, IT and LU, as well as other MS not included in the list Statistics will tend to underestimate biomethane production (particularly E. Europe). Total of around 12,4 bcm will be injected, or 13% of the potential vehicle fuel demand. Hence there is a potential market for around 80 bcm of biomethane in the EU by 2020!!! - set against a potential of bcm 17

18 Steps on the way to an EU-wide market

19 The letter of commitment/intent Agreement on some common sets of standards for biomethane trade Agreement between biomethane registries (existing and planned) Sets out common conditions for cross-border transport of biomethane Ensure recognition of green aspects Reduce possibility of fraud and double counting Create standards for biomethane guarantee of origin Ensure that guarantees of origin are recognised cross-border To be presented to the EU Comission 19

20 NEXT STEPS Raising awareness for biomethane Formulate an approach for the EU: first step: publication of memo document Identify adressees in DG Energy, Environment, Transport, Clima, Agri Market for biomethane, role of biomethane for transport Continue with LOI registries, GGG, formulating a common approach Have timely goals Use national GGG roadmaps to highlight market gaps and potential Formulate approach for countries ex-eu 20

21 Vielen Dank für Ihre Aufmerksamkeit. +

22 Cross-border trade status quo> insert flow diagram from report GOO marked as Country1 GOO 1 redeemed GOO 2 issued GOO 2 redeemed Books in volumes, receives GOOs Physical flow reported to registry 1 Physical flow reported to registry 1?? TSO 1 TSO 2 Feeds in to grid Cross-border gas transit Physical delivery Biomethane producer Country 1 Country 2 Client Coupling physical/virtual flows only on injection/offtake from gas grid? Simple massbalance Guarantee of origin Gas flow

23 Cross-border trade Current practice Destination market (fuel, heat, electricity) should serve as orientation for transportable data Fuel market requires detailed documentation: CO2-Emissions, substrates utilised Current practice: Registry 1 hands the following documents to registry 2: Sustainability certificate (ISCC, REDCert) Registry statement from registry 1 Audit statement Substrate diary Proof regarding cross-border capacity booking This is reflective of biomethane produced in Germany. Different countries have different information densities 23