The European Commission has approved a €1.5 billion scheme to support the production of sustainable biomethane to be injected into the natural gas grid to foster the transition towards a net-zero economy.
The measure will be open to new installations with a projected annual production of biomethane of more than 25 GWh per year. Beneficiaries will be selected through a competitive, transparent and non-discriminatory bidding process on the basis of the strike price per MWh of biomethane offered. The installations must be completed and in operation within 36 months after the granting of the aid. The measure is expected to support the production of 1.6 TWh of sustainable biomethane per year.
The Commission has found the notified scheme in line with the conditions set out under the Temporary Crisis and Transition Framework (‘TCTF'). In particular, the Commission has stressed that the aid will be granted on the basis of a scheme with an estimated capacity volume and budget. Furthermore, the Commission has valued positively that the aid will be granted in the form of two-way contracts for difference (‘CfD'), concluded for a duration of 15 years. The amount of aid corresponds to the difference between the strike price, determined in the tender offer of the beneficiary (‘pay as bid'), and the market price of natural gas. If, however, the market price of natural gas is higher than the strike price, the difference between the two prices will be paid back to the State.
The Commission concluded that the French scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are of importance for the implementation of the REPowerEU Plan and the Green Deal Industrial Plan.
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