1 Regulations and policy instruments for introducing biogas Nelson Rojas Project Manager Tartu, 23 rd March 2011

Agenda About HOG Energi Introducing biogas in Hordaland and Bergen Policy and instruments study - Baltic Biogasbus project How can politics make biogas a viable fuel alternativ? The policy landscape 6 areas of policy action Conclusions

About HOG Energi Interest organization that seeks to improve terms and conditions for developing and growing business across all energy sectors in the Hordaland region HOG Energi have achieved significant results with many important issues regarding methane for the region such as: –Development of infrastructure for natural gas –Increased use of natural gas in public transport –Gas buses in Bergen –Gas ferries –Natural gas in vessels –LNG facility at Kollsnes –Pipeline from Kollsnes plant to Mongstad raffineri

4 A successful natural gas story!

The next chapter in Bergen… Biogas

Some quick facts about our region Quick facts Bergen city: Norway’s second largest city Aprox. population Aprox. 500 buses 81 on methane Quick facts Hordaland county: Norway’s third largest county (19 counties) Aprox. population municipalities Aprox. 800 buses

Introducing biogas in Hordaland and Bergen Decision from Hordaland County Council: 75 new gas buses to be purchased in Bergen Climate Plan for Hordaland county states that use of biogas and other renewable energy sources will be increased towards Biogas will be a priority in public transportation Decision from Bergen City Council: Produced biogas from Rådalen production facility shall be used in the public transport sector Rådalen production plant will be operative from 2014

Three different reports on the works: Biogas as fuel Framework for participating in decision-making Comparative analysis of policies What have we done?: We have reviewed different countries’s practices We have analyzed which practices have worked We identified 6 areas of action Policy and instruments study in Baltic Biogasbus project

Secure the creation of a sustainable biogas system Stimulate establishment of necesary infrastructure Correct market imperfections to make biogas competitive How can politics make biogas a viable fuel alternativ? It sounds easy but it is a complex landscape …

BIOGAS «System, infrastructure and market imperfections» SourcesDistributionMarket Organization og value chain Production Buses Innovation & new enterprise R&D Climate & environment Capital Technology Waste Management Agriculture & forestry Road & transport Related industries Energy Competition InternationalNational Regional Local Policy Level Policy Dimension Policy Target The policy landscape

We identified 6 areas of action

The most important decisions at a national level are: –Set up a renewables strategy equiped with clear targets for biogas, backed up by a porfolio of incentives to regional and municipal authorities and to the private sector. The portfolio of incentives should include programs, grants, investment funds and taxation/prising mechanisms. The incentives are ment to back up the following directives: –Regions/Municipalities are obliged to have a waste management system that ensures the collection and availability of sources of biogas –Regions/Municipalities are obliged to secure biogas production –Regions/Municipalities are oblige to secure a biogasbus fleet 1: Key Strategic political decisions (1)

Secure collection, production and the purchasing of buses. In other words ensure the establishement of a biogas system: –All produced biogas will be used on buses (or set a target number/percentage) –All new buses to be purchased from 2012 will run on biogas or other renewable energy source (or set a target number/percentage) 1: Key Strategic political decisions (2)

Innovation programs for promoting new enterprise Innovation programs directed to SMEs R&D in all different aspects of biogas Technology cooperation programs between private sector & R&D 2: Programs

Infrastructure financing Financial support for production/price guarantees Bus financing (renewing bus fleet) 3: Grants

CO 2 emissions tax on diesel CO 2 emissions tax exemption on natural gas (only for transport purposes) and biogas CO 2 emissions tax on natural gas and biogas for heat and electricity Road tax exemption on natural gas (only for transport purposes) and biogas NOx emissions tax on diesel NOx emissions tax exemption on natural gas (only for transport purposes) and biogas 4: Taxes

Secure investments in technology driven firms (SMEs) that have innovative technologies that can reduce CO2 emissions Secure investment in infrastrunture companies Secure capital through attracting co-investments to investments 5: Investment Fund

Natural gas as a back up Create synergies between biogas implementation and existing natural gas infrastructure Use natural gas as a transitional alternative until biogas is available Stop purchasing of diesel buses 6: Diesel Bus phase out plan!

Regulations and instruments have to be directed towards: Securing the creation of a sustainable biogas system Stimulating the establishment of necesary infrastructure Correcting market imperfections to make biogas competitive Regional and municipal authorities have to become the driving force behind implementation to secure creation of a biogas system National authorities have to back up regional and municipal efforts through programs, grants, investment, taxation of diesel and a total strategy to stimulate establishment of infrastructure and correcting market imperfections Diesel phase out plan Conclusions

Thank you for your attention! Contact: Nelson Rojas HOG Energi Tel: Website: