European Biogas Association Cross-border biomethane trade for supporting the expanded use of methane as transportation fuel in Europe Lodi, 19th June, 2015

Biomethane as vehicle fuel Natural gas (NG) and biomethane are complementary to each other, Bio-CNG and Bio-LNG are blends of NG and bioCH4 to be marketed jointly by NG and biogas industries, The biomethane component improves the GHG emission reduction potential of CNG/LNG, HDV’s, city buses, municipality vehicles, ships, etc. Lodi, 19th June, 2015

Methane as vehicle fuel – forecast 2025 Source: Chris Le Fevre, Research Fellow Oxford Institute of Energy Studies OIES Paper NG84

The functions of cross-border trade: Biomethane trade The functions of cross-border trade: a) balancing supply and demand on regional and European level (beyond national borders) b) enabling production at places/regions with the highest comparable advantage Lodi, 19th June, 2015

Challenges of biomethane trade Value of biomethane: physical (in use) value + intrinsic („bio”) value Intrinsic value: „green”, renewable, sustainable The intrinsic value can be quantified (GHG emission figure) Condition for sustainable biomethane production: intrinsic value must be realised on the market Conditions for biomethane export/import: The „bio” quality must be certified in the producing country The „bio” qualification from the producing country must be acknowledged in the consuming country The mass-balancing requirement must be met Lodi, 19th June, 2015

Well-to-Tank GHG emissions indicative numbers Source: JRC-EUCAR-CONCAWE (JEC) consortium WtT Report 2014

The arts of biomethane trade Lodi, 19th June, 2015

which would address the following biomethane related issues: Potential solution As a potential solution we may suggest an Annex to COM 2010/C 160/01 which would address the following biomethane related issues: sustainability verification for biomethane injected into the European natural gas network, cross-border transfer of volumes and mass balancing of biomethane in the European natural gas network, definition of European natural gas network, definition of national biomethane registries and their role in cross-border mass-balancing, averaging GHG emission figures for biogas raw material mixtures. Lodi, 19th June, 2015

National biomethane registries are needed Independent, neutral, professional organisations Established through government actions or voluntary cooperation of market players Track, confirm and document the biomethane transactions along the contractual chain Administrative support in meeting regulative requirements Independent audit controls Assisting trade development through building market confidence Guarantees of Origin Guarantees of Sustainability Lodi, 19th June, 2015

Summary: Main factors for success Overall development of NGV market Right political priorities, political support for biomethane (as advanced biofuel) Broad marketing cooperation between the natural gas and biogas industries Monetizing the intrinsic („green”) value on the market Reduction of biogas/biomethane production costs Feasible possibilities for cross-border trade Lodi, 19th June, 2015

Thanks for your attention! Dr. Kovács Attila European Biogas Association kovacs@european-biogas.eu Lodi, 19th June, 2015

ILUC Directive Annex IX – list of biogas raw materials qualified for double counting ”non-food cellulosic material” means feedstocks mainly composed of cellulose and hemicellulose, and having a lower lignin-content than ligno-cellulosic material; it includes food and feed crop residues (such as straw, stover, husks and shells), grassy energy crops with a low starch content (such as ryegrass, switchgrass, miscanthus, giant cane, cover crops before and after main crops etc), industrial residues (including from food and feed crops after vegetal oils, sugars, starches and protein have been extracted), and material from biowaste; Lodi, 19th June, 2015

Biogas industry in Europe Biogas production: ~ 15,7 Mrd m3 methane/year, ~ 3% of NG consumption BioCH4 production: ~ 1,0 Mrd m3 methane/year ~ 0,3 Mrd m3 used as vehicle fuel ~ 14.600 biogas plants ~ 300 upgrading units BioCH4 production in: AT, CH, DE, DK, ES, FR, FI, HU, IS, IT, LX, NL, NO, SE, UK Source: EBA Biogas Report 2014

Woodfuel UK Source: REA

Lodi, 19th June, 2015

Biomethane – national markets UK: Fixed FIB + gas market value up to 11,0 €Cent/kWh FR: Fixed FIT 6,4 – 9,5 €Cent/kWh depending on capacity (350 m3/h– 50 m3/h) and substrates example: 150 m3/h, 50% manure+50% org. waste > 9,38 €Cent/kWh DK: Guaranteed biomethane feed-in-bonus (FIB) IT: FIT set by law, 8,0 – 10,0 €Cent/kWh NL: SDE+ scheme, „biotickets” for vehicle fuel use AT: „Technologiebonus“ at green electricity generation DE: Biofuel GHG emission reduction certificates SE: Complex support system, incl. tax relief FI: Tax relief, (high taxes for fossile vehicle fuels) NO: Tax relief till end 2015 Kecskemét, 23rd April, 2015

Biomethane quality will be regulated by CEN standards elaborated in TC 408 a) for grid injection b) for vehicle fuel use Kecskemét, 23rd April, 2015