The European Commission has announced it has approved €1.5bn to support sustainable biomethane production in France.
Awarded via the State aid Temporary Crisis and Transition Framework (TCTF), the significant funding will unlock sustainable methods of biomethane production that will be key to establishing a net zero economy.
Margrethe Vestager, Executive Vice-President in charge of competition policy, explained: “This €1.5bn scheme will support the production of sustainable biomethane in France.
“By reducing the reliance on imported fossil fuels, it will contribute to the achievement of the EU’s strategic goals.
“This measure is an important step in the transition to a net zero economy while protecting the level playing field in the Single Market.”
What is biomethane?
Biomethane is a renewable form of natural gas produced through the anaerobic digestion of organic materials such as agricultural waste, manure, municipal solid waste, sewage, and other biodegradable feedstocks.
This process involves microorganisms breaking down these organic substances in the absence of oxygen, resulting in a mixture of gases, primarily methane (CH₄) and carbon dioxide (CO₂).
The methane-rich biogas is then purified to remove impurities, resulting in biomethane that has properties similar to conventional natural gas.
The role of biomethane in the green transition
The importance of biomethane in the green transition is multifaceted. Firstly, it contributes significantly to the reduction of greenhouse gas emissions.
By capturing methane that would otherwise be released into the atmosphere from decomposing organic waste, biomethane production mitigates the potent greenhouse effect of methane, which is over 25 times more effective at trapping heat than CO₂ over a 100-year period.
Secondly, biomethane is a renewable and sustainable energy source that can be integrated into existing natural gas infrastructures.
This makes it a versatile option for heating, electricity generation, and as a fuel for vehicles. The ability to use existing infrastructure reduces the need for new investments and facilitates a smoother transition from fossil fuels to renewable energy sources.
Moreover, biomethane production supports circular economy principles by turning waste into valuable resources.
This not only helps in waste management but also generates economic benefits for agricultural and rural communities by providing additional income streams and creating jobs.
Additionally, the use of biomethane in transportation as a vehicle fuel, often referred to as bio-CNG (compressed natural gas), significantly reduces air pollutants such as nitrogen oxides (NOₓ) and particulate matter compared to conventional diesel and gasoline fuels. This results in improved air quality and public health benefits.
Funding objectives
The funding targets new installations with an annual biomethane production exceeding 25 GWh.
Beneficiaries will be selected via a competitive, transparent, and non-discriminatory bidding process based on the strike price per MWh of biomethane.
Installations must be operational within 36 months of receiving aid. The initiative aims to support the annual production of 1.6 TWh of sustainable biomethane.
Aid will be provided through two-way contracts for difference (CfD) lasting 15 years. The aid amount is the difference between the beneficiary’s strike price and the market price of natural gas. If the market price exceeds the strike price, the difference is paid back to the State.
Additionally, safeguards will be in place to ensure competitive bidding and limit undue competition distortions.
