Decarbonisation

Biomethane: Decree [MITE] 340/2022 makes € 1.7 billion NRRP funds available

Published on 10th Oct 2022

Biomethane | Published Ministry of Ecological Transition Decree [MITE] 340/2022 that disciplines the assignment of € 1.7 billion of NRRP funds for the development of biomethane according to criteria promoting the circular economy

Aim
  • To support the production of biomethane fed into the natural gas grid, in line with the investment support measures of the National Recovery and Resilience Plan, in the ambit of Mission 2, Component 2, Investment 1.4 - "Development of biomethane, according to criteria to promote the circular economy", for a total amount of € 1,730.4 million.
  • To define incentives for biomethane fed into the natural gas grid and produced, in compliance with the sustainability requirements of Directive 2018/2001/EU, by newly built plants fuelled by agricultural matrices and organic waste or by plants for the production of electricity from agricultural biogas undergoing conversion.
    Incentives
    • Capital contribution on eligible investment costs incurred up to a maximum of 40%. 
    • Incentive tariff applied to the net production of biomethane for a duration of 15 years and paid from the date the plant becomes operational, according to two ways:

    - all-inclusive tariff for plants with a production capacity of 250 Smc/h or less;
    - a premium tariff for plants with a production capacity of more than 250 Smc/h and for all production plants that feed biomethane into natural gas networks other than networks with a connection obligation.

    Incentives are not cumulative with other public incentives or support schemes however denominated intended for the same projects.

    Scope of application

    Incentives are available for 

    • newly built plants fuelled by agricultural matrices and organic waste; 
    • plants for the production of electricity from agricultural biogas undergoing reconversion;

    provided that:

    • the works were not started before the publication of the ranking list;
    • the plants are commissioned by 30 June 2026. 

    The so-called companies in difficulty, applicants for which grounds for exclusion under the Public Contracts Code apply, and entities benefiting from the incentive scheme under the Ministerial Decree of 2 March 2018 are excluded from the competitive procedures.

    Access to incentives

    The main requisites for access to the competitive procedures are:

    • the possession of the authorisation for the construction and operation of the plant;
    • the connection estimate issued by the competent network operator (in the case of plants to be connected to the gas transport and distribution networks with the obligation to connect third parties);
    • the implementation of the works on existing agricultural installations (in the case of reconversions);
    • further requirements of compliance with EU and sustainability regulations - see Decree for further details.
    Admissable costs | Capital

    Eligible expenses for the purposes of the capital grant are:

    • the costs of setting up and improving the efficiency of the plant, such as the infrastructure and machinery necessary for the management of biomass and the anaerobic digestion process, for the storage of digestate, for the construction of the biogas purification plant, for the treatment, compression and storage of biomethane and CO2, for the construction of the facilities and equipment for own consumption of biomethane;
    • biomethane monitoring and oxidation equipment, flue gas and fugitive emission monitoring;
    • the costs of connection to the natural gas grid;
    • the costs of purchasing or acquiring computer software to operate the plant;
    • the costs of design, works, supervision of works, testing, consultancy, feasibility studies, purchase of patents and licences, related to the implementation of the above investments, up to a total maximum of 12% of the total expenditure;
    • the costs for the composting phase of the digestate.
    Competitive procedure

    Competitive procedures are launched within the following annual capacity quotas:

      2022 2023 2024 Total
    Total (Smc/h) 67.000 95.000 95.000 257.000

     

    In 2022, only one competitive procedure is launched. From 2023, at least two procedures per year are planned. The tender period is 60 days.
     
    The GSE evaluates the projects and, within 90 days of the closure of each individual procedure, publishes the relative ranking of the admitted projects, highlighting the projects placed in a position allowing them to access the incentives.

    Plants in other States

    Plants located in the territory of other Member States of the European Union and other non-EU States bordering Italy, with which the European Union has entered into a free trade agreement, which physically export their biomethane to Italy may benefit from the incentive scheme under the conditions and according to the modalities set out in art. 13 of the Decree.

     

    Follow this link for a brief overview of the main measures in support of the sector in Italy.

    For further information or clarification please do not hesitate to contact us.

    Share
    Interested in hearing more from Osborne Clarke?

    * This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

    Connect with one of our experts

    Interested in hearing more from Osborne Clarke?

    Related articles