incentives evaluation report

INCENTIVES EVALUATION

Date of publication: July 2014

Authors: Beate Faßbender, Katharina Laub (IZES), Eric Meers (UG), Santino Di Berardino (LNEG),

David Bolzonella (UV), Lorie Hamelin (SDU)

IEE project: IEE/12/046/SI2.645700 – GR3

Project website: http://www.grassgreenresource.eu/

http://www.grassgreenresource.eu/

Incentives Evaluation

2 IEE/12/046/SI2.645700 – GR3

Disclaimer

The sole responsibility for the content of this publication lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the EACI nor the European Commission are responsible for any use that may be made of the information contained therein.

Le contenu de cette publication n'engage que la responsabilité de son auteur et ne représente pas nécessairement l'opinion de l'Union européenne. Ni l'EACI ni la Commission européenne ne sont responsables de l'usage qui pourrait être fait des informations qui y figurent.

Die alleinige Verantwortung für den Inhalt dieser Publikation liegt bei den AutorInnen. Sie gibt nicht unbedingt die Meinung der Europäischen Union wieder. Weder die EACI noch die Europäische Kommission übernehmen Verantwortung für jegliche Verwendung der darin enthaltenen Informationen.

El contenido de esta publicación solo compromete a su autor y no refleja necesariamente la opinión de la Unión Europea. Ni la EACI ni la Comisión Europea son responsables de la utilización que se podrá dar a la información que figura en la misma.


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TABLE OF CONTENT

Table of content ...................................................................................................................................... 3

List of tables ............................................................................................................................................ 6

List of figures ........................................................................................................................................... 7

1 Introduction ..................................................................................................................................... 8

2 Incentives evaluation Germany ....................................................................................................... 9

2.1 Incentives for different grass origins ....................................................................................... 9

2.1.1 Greenery cuttings ................................................................................................................ 9

2.1.2 Landscape materials ............................................................................................................ 9

2.2 Incentives for the energetic use of grass in biogas plants .................................................... 11

2.2.1 Renewable Energy Sources Act 2009 (EEG 2009) valid from 2009 to 2012 ...................... 11

2.2.2 Renewable Energy Sources Act 2012 (EEG 2012).............................................................. 11

2.2.3 Outlook Renewable Energy Sources Act 1. Oct. 2014-? .................................................... 12

2.3 Effectiveness and challenges in Germany ............................................................................. 14

2.4 References ............................................................................................................................. 16

3 Incentives evaluation Flanders (Belgium) ...................................................................................... 17

3.1 Incentives for different grass origins ..................................................................................... 17

3.1.1 Greenery cuttings .............................................................................................................. 17

3.1.2 Landscape materials .......................................................................................................... 17


3.2.1 Incentives........................................................................................................................... 19

3.2.2 Gate fee ............................................................................................................................. 19

3.2.3 Green Energy Certificate (GSC).......................................................................................... 19

3.2.4 Combined Heat and Power Certificates (WKC) ................................................................. 20

3.2.5 Ecology premium ............................................................................................................... 20

3.2.6 Construction subsidies for biogas plants ........................................................................... 21


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3.3 Effectiveness and challenges in Belgium ............................................................................... 22

3.4 References ............................................................................................................................. 23

4 Incentives evaluation Denmark ..................................................................................................... 24



4.3 Effectiveness and challenges in Denmark ............................................................................. 27

4.4 References ............................................................................................................................. 28

5 Incentives evaluation Portugal ....................................................................................................... 29



5.1.2 Grass from roads and green municipal areas .................................................................... 29


5.2 Energetic use of grass in biogas plants .................................................................................. 32

5.2.1 National financial program – Biogas plants construction ................................................. 32

5.2.2 Incentives for produced energy ........................................................................................ 32

5.2.3 Feed-in tariff – large plants ............................................................................................... 32

5.2.4 Feed-in- tariff – Mini production of electricity .................................................................. 34

5.2.5 Green Energy Certificate (GSC).......................................................................................... 35

5.2.6 Combined heat and power certificates (WKC) .................................................................. 35

5.2.7 Self-consume of electricity ................................................................................................ 36

5.3 Effectiveness and challenges in Portugal .............................................................................. 37

5.4 References ............................................................................................................................. 39

6 Incentives evaluation Italy ............................................................................................................. 40





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6.2.1 Anaerobic digestion plants in operation since 2009 ......................................................... 41

6.2.2 Anaerobic digestion plants in operation since 2012 ......................................................... 41

6.2.3 Anaerobic digestion for biomethane generation (after 2013) .......................................... 42

6.2.4 Effectiveness of incentives in Italy .................................................................................... 42

6.2.5 Indication about the costs involved to the delivery of green cuttings (public) or from

agricultural origin ........................................................................................................................... 43

7 Summary of the main findings ....................................................................................................... 44



8 List of abbreviations ....................................................................................................................... 46


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LIST OF TABLES

Table 1: Basic remuneration and boni for power input from biogas plants by EEG 2009 .................... 11

Table 2: Remuneration for power input from biogas plants by EEG 2012 ........................................... 12

Table 3: Tariff system according to installed el. capacity EEG 2014 ..................................................... 13

Table 4: Remuneration for power input from biogas plants by DL 35/2013 ........................................ 33

Table 5: Remuneration for medium voltage power-long use tariff ...................................................... 36

Table 6: Incentives for organic waste and bio-products ....................................................................... 42

Table 7: Incentives for biological products (like crops) ......................................................................... 42


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LIST OF FIGURES

Figure 1: Cluster of grass at its origin ...................................................................................................... 8

Figure 2: Development of the inventory of German biogas plants (DBFZ 2012) .................................. 15


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1 INTRODUCTION

This evaluation provides an analysis of the incentive measures in the different regions of the project.

The regional partners elaborated the region specific aspects. The incentives in place in the different

countries impacting on the management and energetic valorisation of grass residues are analysed for

their effectiveness.

This chapter classifies the incentives for grass on the basis of the classification of grass like it was

defined in the legal framework analysis of task 1 (see legal framework report WP6). The following

figure illustrates the different origins of grass, clustered towards grass as greenery cuttings from

private and public areas, grass as landscape materials from protected and agricultural areas.

Figure 1: Cluster of grass at its origin

grass origins

greenery cuttings

private areas

households

golf courts

sportsarea

public areas

road sides/ industrial area

airport area

garden, park, cemetery,

sports area

floral remains from river

maintenance

landscape materials

protected areas

(BNatSchG)

agricultural management

nature conservation management

agricultural

areas

extensiv permanent grassland

unexploited grassland


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2 INCENTIVES EVALUATION GERMANY

This evaluation provides an analysis of the incentives for different grass origins in place in the region

of Saarland in Germany.

2.1 INCENTIVES FOR DIFFERENT GRASS ORIGINS

2.1.1 GREENERY CUTTINGS

In Saarland the municipalities are responsible for the organic recycling of greenery cuttings

(composting collection points and plants) (§ 5 II No. 2 SAWG 2007). The greenery cuttings from private

households, commercial companies and other public authorities can be delivered to these locations.

The costs of this public duty (organic recycling of greenery cuttings) are refinanced via direct private

payments (no general waste fees, taxes or premiums) (§ 8 I SAWG 2007). The delivered amount of

greenery cuttings is estimated by the composting plant operator in this case the municipality. For

example, at the composting plant in Saarbrucken for private households the payment up to the 1st m3

per day is not charged. From the 1st m3 deliveries are charged with 8 €/m3 per day. Commercial

companies or other public authorities have to pay 8 €/m3 without any exemptions. Most of the public

authorities are commissioning private companies to maintain the public areas. Within the private

companies budget offer, the private payments for delivering the greeneries to the composting plant

per m3 is already included.

2.1.2 LANDSCAPE MATERIALS

2.1.2.1 GRASS FROM AGRICULTURAL PERMANENT GRASSLAND USED IN BIOGAS

PRODUCTION

The payment of biogas plants for grass from agricultural areas is usually calculated in accordance to

the material or energetic utilization value. By operators of biogas plants in Saarland in 2013 for grass

with a dry matter content of 32 % between 14 €/t FM and 19 €/t FM were paid.

2.1.2.2 GRASS FROM LANDSCAPE PROTECTION AREAS

Furthermore the land in nature conservation areas as well as agricultural permanent grassland is

endowed by the EU and national subsidies or maintenance services by designated national authorities.

1. Landscape protection areas used as agricultural area (arable land, permanent grass land) are

supported by the Single Payment Schemes from the first pillar of CAP. In Saarland in 2013 the

farmers can apply for the single decoupled payment scheme in the amount of about 294 €/ha

*year (regardless of the cultivated crop, permanent grassland).


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2. In 2012, 1,167 ha were engaged under contractual conservation management agreements

(Vertragsnaturschutz) by the Saarland Ministry of the Environment. The preservation of

ecological valuable permanent grassland was supported by the European Agricultural Fund

for Rural Development (EAFRD) (in Germany called ELER). Depending on the time of cutting

(first of June till 15th of July) an amount of 216-316 €/ha*year are paid.

3. In 2012, 260 ha meadow orchards (Streuobstwiesen) with rules regarding the surrounded

grassland (mowing once a year) were also supported by the European Agricultural Fund for

Rural Development (EAFRD). An amount of 500 €/ha* year was paid including tree care.

4. Without stressing EAFRD fond the regional authority for environment protection (LUA body

of the Saarland Ministry of the Environment) supports about 650 ha with an amount of 200

to 270 €/ha* year in landscapes listed as nature protection areas (Naturschutzgebiete) to

defend this areas from bush encroachment and to maintain permanent grassland.

5. Organically cultivated agricultural areas for landscape management are given additional

support ranging from 168 to 116 €/ha*year. This support cannot be combined with support

from EAFRD (like 2. and 3. rule prohibiting double funding)

Landscape management measures in accordance with nature conservation objectives are obligatory

by Federal Nature Conservation Act and Federal Building Act, if an impairment of nature or landscape

will be caused by any construction or spatial planning activity. Unavoidable damage through those

measures has to get compensated in priority (compensatory measures). If compensation measures

cannot be done, the causer has to compensate in other ways (alternative measures). The management

of ecological valuable grass areas can be part of the ecological compensation measures, which are paid

by private causers.


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2.2 INCENTIVES FOR THE ENERGETIC USE OF GRASS IN BIOGAS PLANTS

2.2.1 RENEWABLE ENERGY SOURCES ACT 2009 (EEG 2009) VALID FROM 2009 TO 2012

From 2009 to the end of 2011 the Renewable Energy Sources Act 2009 (EEG 2009) was valid. In this

time about 3,150 new biogas plants were connected to the grid with a total power of 1,418 MW. At

the end of 2011 a total of about 7,200 biogas plants were in operation with a power of 2,850 MW

(DBFZ 2012). The following table lists the basic remuneration and several bonuses (e. g. landscaping

material) for the produced electricity graduated according to the size of the plant. The basic

remuneration and the bonuses for biomass were subject to an annual degression of 1 %.

Table 1: Basic remuneration and boni for power input from biogas plants by EEG 2009

Total plant power

Basic remuneration (2009)

increased bonus for Renewable Resources

Liquid Manure bonus (min 30% of total input)

increased bonus for using mainly Landscaping Material

≤ 150 kWel 11,67 ct/kWhel +7,00 ct/kWhel +4,00 ct/kWhel +2,00 ct/kWhel

≤ 500 kWel 9,18 ct/kWhel +7,00 ct/kWhel +1,00 ct/kWhel +2,00 ct/kWhel

≤ 5.000 kWel 8,25ct/kWhel +4,00 ct/kWhel

2.2.2 RENEWABLE ENERGY SOURCES ACT 2012 (EEG 2012)

By comparison to the preceding years in 2012 distinctly fewer biogas plants and additional power were

implemented. Only 300 new biogas plants were constructed in 2012 (in 2011 about 1300 new biogas

plants). Inclusive the extension of existing plants in 2012 350 MW of power were further extended

(DBFZ 2013).

Based on the amendments made to the EEG, biogas plants connected to the grid from January 2012

have to calculate with other requirements of the remuneration system. The most important changes

compared to the former EEG are:

1. Elimination of the bonus system

2. Implementation of input categories: Grass from permanent grassland and agricultural

grass from arable land are listed in the lower paid category I like maize and whole crop

silage of cereals. Grass as landscape material from protected areas, liquid manure and

grass-clover are listed in the higher paid category II (Table 2: Remuneration for power

input from biogas plants by EEG 2012)

3. It is not allowed to use one kind of input material like e.g. maize, whole crop silage of

cereals or grains more than 60 % by mass.

4. Minimum 35 % of the produced heat of the biogas plants must be utilised outside the

biogas plant.


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The following table shows the remuneration for the produced electric energy of different kinds of

biogas plants and the payment for various kinds of input materials.

Table 2: Remuneration for power input from biogas plants by EEG 2012

Total plant power

Basic remuneration (2012)

Input category I Input category II

Input 80 % liquid manure

Organic waste (90 mass %)

≤ 75 kWel 25 ct/kWhel X

≤ 150 kWel 14,3 ct/kWhel +6 ct/kWhel +8 ct/kWhel 16 ct/kWhel

≤ 500 kWel 12,3 ct/kWhel +6 ct/kWhel +8 ct/kWhel 16 ct/kWhel

≤ 750 kWel 11 ct/kWhel +5/2,5 ct/kWhel +8/6 ct/kWhel 14 ct/kWhel

≤ 5.000 kWel 8,25 ct/kWhel +4/2,5 ct/kWhel +8/6 ct/kWhel 14 ct/kWhel

2.2.3 OUTLOOK RENEWABLE ENERGY SOURCES ACT 1. OCT. 2014-?

The amended German Renewable Energy Act (EEG 2014) sets a binding development corridor for

renewable energies. The steering instruments for this acceleration will be technology oriented

promoted as low-cost technologies. The prior Bonuses and Input Category for single biomass fraction

promotions are reduced or cancelled. Latest in 2017, the acceleration will be steered via public

tenders. For a better integration of renewable energy a mandatory direct marketing is introduced.

The share of biomass is set for 0.5 TWh/ 11 TWh within the RE power mix in 2015 (new installations).

The annual additional installations are limited to max. 100 MW. According to the highly sophisticated

promotion system for biomass, a strong reduced tariff was set with an average biomass tariff about

15 ct/kWh in 2015. Solely a promotion focus via separate tariffs is given for organic residues and

manure. No separate promotion for energy crops and landscaping materials etc. (see EEG 2004 and

EEG 2012) is eligible. New installations do not have any claim for a bio methane bonus. The degression

is up to 2 % but with quarterlies intersections. If a running biogas plant will be expanded after 2014

the EEG tariff from 2014 will be in place.


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Table 3: Tariff system according to installed el. capacity EEG 2014

Capacity Basic fee Organic Waste Fee Manure Fee

≤ 75 kWel 13,66 ct/kWh

15,26 ct/kWh

23,73 ct/kWh

≤ 150 kWel

≤ 500 kWel 11,78 ct/kWh

≤ 5.000 kWel 10,55 ct/kWh 13,38 ct/kWh

≤ 20.000 kWh el 5,85 ct/kWH

Detached from the basic tariffs the payment for organic wastes applies for waste under the waste

codes of the Biowaste Ordinance. Requirement for this higher payment is to prove that there is 90 %

mass input over a year of materials. A heat use obligation is not mandatory, if these criteria are not

matched, the single materials are paid-off in accordance with the basic fee. Otherwise this material is

paid off as Basic fee. Grass from nature conservation areas is under the definition of landscaping

materials classified as wastes. An extra fee for biomass from nature conservation areas is not existing

anymore (see EEG 2004, EEG 2009).

The Organic Waste fee is eligible for grass from:

Sports areas and children playgrounds, garden and park areas, landscaping materials, grass from

nature conservation areas (contracted nature conservation areas), municipal greenery cuttings, grass

from verges, grass from airports, grass from public and private garden and parks, golf areas, grass from

cemeteries, remains from rivers

Grass from agricultural areas is under basic fee tariff for biomasses:

Agricultural permanent grass land, voluntary extensive agricultural grass land, grass from

environmental agricultural subsidy programs, etc.


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2.3 EFFECTIVENESS AND CHALLENGES IN GERMANY

Incentives for different grass origins

In Saarland, the municipalities are responsible for the treatment of grass residues as a part of greenery

cuttings. Most of this grass residues are composted in different plants, which is refinanced by direct

private payments. The budget for composting greenery cutting can also be used for technologies like

methanisation.

The payments to maintain landscapes as described in chapter 2.1.2 helps to create an incentive effect

to recover grass from these extensive locations. If this kind of grass is not used for animal feed and

bedding there is a good chance to serve the supply of a biogas plant if the technical and logistical

requirements are fulfilled.

Incentives for the energetic use of grass in biogas plants

Since the extra promotion of energy crops methanisation for feeding into the power grid (started in

2004) the EEG excluded a combined fermentation of energy crops with organic residues via worse

economic conditions. The precondition of exclusiveness to gain the energy crop tariffs have been

excluded a combined energy crop - organic waste mixture. The consequence of that regulation was,

that if biogas plants under the “energy crop tariff” added grass, mainly grass from agricultural areas

and landscaping materials have been mixed. Grass under the organic waste definition were inserted

input materials of general organic waste plants.

The introduction of the biomass bonus in EEG 2004 was the start up for the acceleration of energy

crops methanisation. A combined fermentation with organic residues was prohibited for getting the

bonus (precondition of exclusiveness). Between 2004 and 2008, a total amount of 2,340 biogas plants

went into operation (in comparison: only 400 biogas facilities in 2000-2003).

The claim for EEG 2009 new defined “energy crop bonus” was only eligible by the precondition of

exclusiveness. A mixture with other input biomasses effects the loss of the “energy crop bonus”. Only

certain other biomasses than manure or landscaping materials as well as some other biomasses given

in the EEG positive list can be combined without losing that claim. Actually an additional bonus is here

cumulatively provided (manure-bonus or landscaping material bonus only in combination with energy

crop bonus). A combination with biomass, listed in negative lists, effect the loss of the energy crop

bonus for the total lifetime of the plant. This is also the fact if only small amounts of these materials

(as e.g. greeneries from garden or parks) are proven. The definition of landscaping materials was wide,

which included as well materials like e.g. grass verges and maize. As a result biogas plants with energy

crops input are in general not mixed with grass as residues (biodegradable waste as from sports

facilities and children playgrounds, garden and park wastes, biodegradable waste as from cemeteries,

etc.). The biogas plant and its digestate are subjected to the waste legislation if grass residues are

included as input substrates. The EEG 2009 (third Amendment) resulted in strong growth of the biogas

sector. From 2009- 2011 approximately 3,150 biogas facilities had been installed.


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Figure 2: Development of the inventory of German biogas plants (DBFZ 2012)

The EEG 2012 changed that boni system towards a category based tariff groups where biomass, which

is hardly to mobilize as well as organic wastes, are separately high tariffed. EEG plants according to

2012 are separately tariffed according to their content of different biomasses. The result is that also

energy crops and organic wastes can be mixed together without any monetary disadvantage.

3,000ß

0

2,000

0ß0

7,000ß

0


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2.4 REFERENCES

BauGB (2009) Federal Building Code – Baugesetzbuch (BauGB) in the version published on 23

September 2004 (BGBI. I p. 2414), as last amended by article 4 of the act dated 31 July 2009 (BGBI. I p.

2585)

BNatSchG (2010) Federal Nature Conservation Act – Bundesnaturschutzgesetz (BNatSchG) in

the version published 29 July 2009 (BGBl. I p. 2542), the act was adopted as article 1 of the act dated

29 July 2009 and is applicable with effect in accordance with article 27 sentence 1 from 1 March 2010.

DBFZ (2012) Deutsches Biomasseforschungszentrum gGmbH: Monitoring zur Wirkung des EEG auf

die Entwicklung der Stromerzeugung aus Biomasse; Leipzig

DBFZ (2013) Deutsches Biomasseforschungszentrum gGmbH: Stromerzeugung aus Biomasse

03MAP259 – Zwischenbericht; Leipzig

EEG (2012) Renewable Energy Sources Act – Erneuerbare Energien Gesetz (EEG) as applicable with

effect from 1 April 2012 (basis: Bundestag printed paper – BT- Drucks. 17/8877 17/9152)

EEG (2009) Renewable Energy Sources Act – Erneuerbare Energien Gesetz (EEG) in the version

published on 25 October 2008 (BGBl. I p. 2074), last amended by article 12 of the act dated 22

December 2009 (BGBl. I p. 3950)

SAWG (2007) Waste Management Law for Saarland - Saarländisches Abfallwirtschaftsgesetz (SAWG)

in the version published on 26 November 1997 (official journal 1997 p. 1352), as last amended by the

act dated 12 September 2007 (official journal p. 2026)


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3 INCENTIVES EVALUATION FLANDERS (BELGIUM)

In Belgium the policy and management of energy and agricultural related issues occur at the regional

level. This has as a consequence that different rules and incentives are applicable for the region of

Flanders (North), Wallonia (South) and Brussels (Center). In this chapter only the incentives for the

Northern region of Belgium (Flanders) are summarized.


3.1.1 GREENERY CUTTINGS 1,2 ,3,4

In most municipalities in Flanders, garden waste of residential areas can be brought to a central

collection point and deposited at no cost for low quantities of cuttings. In some municipalities, a gate

fee (usually around 5 cent per kg) is charged for larger quantities of such greenery cuttings, i.e. larger

than 500 kg.

For large quantities of cuttings that are brought directly to a composting plant, contracts can be made

between the plant manager and the contractor. In this case, the gate fee will be around 30- 40 EUR

per ton (received by the composting plant operator).


No information from Flanders how much is paid for permanent grassland or arable land from the Single

Payment Schemes from the first pillar of CAP and for special treatment like landscape management

from the European Agricultural Fund for Rural Development (EAFRD).

3.1.2.1 GREEN COVER SUBSIDY 5, 6

The Flemish government provides support to farmers who cultivate a green cover crop after the main

crop is harvested. The green cover crop has to make sure the soil stays covered until the field work

starts up again. Green cover crops have many positive effects on the environment as far as

sustainability goes. There are several conditions that have to be fulfilled. For example, the main crop

cannot be temporary or permanent grassland, grasses in nature conservancy and clovers and the green

cover crop has to come from a restricted list of plants. In 2012, the amount of subsidy was averagely

50 EUR/ha. The amount of subsidy (maximum 100 EUR/ha) is calculated, based on the total amount of

eligible hectares that effectively complies with this specific support measure.


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3.1.2.2 SUBSIDIES FOR GRASSLAND 7, 8

If grassland meets the requirements to be recognized as agricultural area the farmer has to first of all

register this in order to receive subsidies. Secondly, he needs to follow certain rules regarding the

maintenance of the grasslands and the protection of his animals, the soil and the wildlife. For every

hectare registered in this way, the farmer will receive 10 to 1000 EUR. These values are not coupled

with the production, but are historical values for each farmer.

If there is a management contract, for example with the Flemish Land Agency (VLM), other rules for

the management of these lands could apply. Therefor it is also possible that for those lands other

subsidies will apply. It is also worth mentioning that there are different registration types and subsidies

if the land is registered as grassland with trees or for set-aside land. All rules are listed by the Flemish

Government, department of Agriculture and Fishery, in reference 7.


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3.2.1 INCENTIVES

At the time of publication, there is no additional direct subsidy related to the energetic use of grass

residues in biogas plants in Flanders as is the case in Germany for example. Subsidies applicable to

grass biomass are the same as for other biogas feedstock.

3.2.2 GATE FEE 4,20

The gate fee for composting grass is around 40 EUR per ton at this moment (received by the

composting plant operator). Currently, there is hardly any digestion of grass in Flanders, but the gate

fee in this case should be similar or a bit lower. The two main factors influencing the actual gate fee

that has to be paid for the disposal of the grass residues is the pollution level and the established

contracts. Road side cuttings are most often more expensive, since they contain more pollution (cans,

plastic, sand, …) . The gate fee for this type of grass waste can go up to 55 or 60 EUR per ton.

This shows that in case the pollution can be withheld from the grass waste flow, the costs for disposal

will go significantly down what will be a significant incentive for the energetic valorization of grass

waste.

3.2.3 GREEN ENERGY CERTIFICATE (GSC) 9, 10 , 11, 12 , 13

Energy producers, such as biogas plants, that produce electricity based on renewable resources can

apply for Green Energy Certificates (Groene Stroom Certificaten, GSCs) at the Flemish Regulator of the

Electricity and Gas market (VREG). Through a system of the free market the certificates can be sold to

an energy supplier, as this latter one needs to provide a minimum number of certificates to the

authorities (VREG). In this case the price paid for the certificates from the energy supplier to the energy

producer (e.g. biogas plants) is set by the rules of the “free market”. Nevertheless, there is an extra

safety-net within the system that assures that the energy producer always receives a minimal fee from

the distribution network operators, as they are obliged to buy all certificates offered on the market

that cannot be sold to the Electricity suppliers. This minimal fee is actually 93 EUR per GSC for biogas

plants that have started up after January 1st 2013 and digest agricultural waste or VGF-waste

(vegetable, garden, and fruit). Grass from nature areas or roadsides are since 2012 seen as part of

agricultural streams, greenery cuttings from gardens that are fine and not woody are part of GFT.

Nowadays there is a significant over-supply of green electricity certificates on the market in

comparison to set quota. Due to this over-supply the Flemish government decided to adjust the

amount of certificates received for each megawatt of green electricity produced by a “banding factor”.

This “banding factor” (Bf) is a factor calculated for the different types of green energy production and


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determines the amount of support a certain type of technology should receive. More information on

this can be found on www.vreg.be. Nevertheless, the current Bf for biogas is 1, meaning that per MWh

of electricity produced, the biogas owner receives 93 EUR.

It is important to note that for the biogas-installations the amount of green electricity that can be taken

into account for the granting of the green energy certificates (GSC’s) also slightly depends on the type

of biomass that goes into the digester. The more energy crops the digester consumes, the lower the

amount of green electricity that will serve for obtaining the GSC’s. This aspect can be an additional

incentive for a biogas plant to switch part of his energy crops feed to grass waste, as grass is not

considered an energy crop.

3.2.4 COMBINED HEAT AND POWER CERTIFICATES (WKC) 10, 11, 13 , 14 , 15

Besides the GSCs, biogas plant operators also gain additional incentive for heat when the biogas is used

in a combined heat and power engine (cogeneration units) in the form of tradable heat certificates

(Warmte Kracht Certificaten or WKCs). This is on the condition that the heat produced by the

cogeneration unit is consumed in the useful way. In Flanders the heat is mainly consumed in different

levels in the installation: heating the digester and surrounding processes (e.g. hygienisation), heating

neighbouring buildings / processes, evaporation of the thin fraction of the digestate (lowering

digestate disposal costs) and/or drying the thick fraction of the digestate (for export). The minimum

support price for installations with 1 January 2013 or later as startup date is 31 EUR per MWh for such

certificates.

On the matter of digesting grass waste or not, there is no difference whether or not there is a lower

level of digestion of energy crop – the number of heat certificates will be equal on all situations.

3.2.5 ECOLOGY PREMIUM 16

In the Flemish Region, biogas projects can apply for an ecology premium for enterprises, managed by

Enterprise Flanders (Agentschap Ondernemen). Only investments that do not benefit from GSCs or

WKCs are eligible for the ecology premium and 80 % of the energy content of the products must be

used as a heat source on-site. In reality this would mean that the biogas produced should be used for

heat-production, and not for the production of electricity and heat in a cogeneration plant.

The amount of subsidies that projects can receive varies from 15 % (for big enterprises) up to 30 % (for

SMEs) of the total investment costs, with a maximum grant of 1 Mio. EUR over a period of 3 years.


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3.2.6 CONSTRUCTION SUBSIDIES FOR BIOGAS PLANTS 11, 17

The Flemish Agricultural Investment Fund (VLIF) can in exceptional cases provide subsidies for the

construction of a digestion plant on the farm level. The support can be up to 28 % of the total

investment costs as part of the investment support related to investments for the realization of

agriculture with a broader scope, sustainable agriculture or the farm reconversion.


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3.3 EFFECTIVENESS AND CHALLENGES IN BELGIUM4, 18 , 19

At this point, grass residues do not have a good reputation amongst the biogas plant operators, despite

the available, yet decreasing financial support measures. The main current challenges for the use of

grass residues in co-digestion can reduced to the lack of sufficiently high and stable economic

incentives versus a more difficult application of grass residues in the digestion plants as compared to

other available and more easily digested biomass. The quality of grass residues brought to digestion

plants is largely fluctuating (e.g. due to a too long period of exposure on the land) and grass residues

streams are often heavily polluted with soil and waste products such as cans and plastic. Additionally

there can be problems with the mixing and consequent formation of floating layer. As always,

perception plays a huge role, too. Another challenge in Belgium is the surplus of nutrients in our soil

so that the farmer has to pay approximately 20 EUR per ton to treat his digestate.


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3.4 REFERENCES

1 http://www.gent.be/eCache/THE/4/216.cmVjPTM4NTgw.html

2 http://www.lochristi.be/index.aspx?SGREF=3407

3 http://www.kortrijk.be/producten/groenafval

4 Willem Boeve, Inagro, personal communication

5 http://lv.vlaanderen.be/nlapps/docs/default.asp?id=137

6 http://lv.vlaanderen.be/nlapps/docs/default.asp?id=3290

7 http://lv.vlaanderen.be/nlapps/docs/default.asp?fid=46

8 http://lv.vlaanderen.be/nlapps/data/docattachments/natuurlijk-beheer-grasland-web.pdf

9 http://www.vreg.be/systeem-groenestroomcertificaten

10 Inverde (2012). Inverde, Forum for green expertise: Graskracht, eindrapport; Brussel

11 Inverde (2012). Inverde, Forum for green expertise: Graskracht, brochure; Brussel

12

http://codex.vandenbroele.be/Zoeken/Document.aspx?DID=1018092&param=inhoud&AID=1111517

13 http://www.vreg.be/sites/default/files/mededelingen/mede-2013-3_2.pdf

14 http://www.vreg.be/wkk-warmte-krachtkoppeling

15

http://codex.vandenbroele.be/Zoeken/Document.aspx?DID=1018092&param=inhoud&AID=1111518

16 http://www.agentschapondernemen.be/artikel/wat-de-ecologiepremie-plus

17 http://lv.vlaanderen.be/nlapps/docs/default.asp?id=1989#2

18 http://www.graskracht.be/images/graskracht_25-11-2011_Elke_Vandaele_Vlaco.pdf

19 http://www.biogas-e.be/sites/default/media/rapporten/Voortgangsrapport_2013.pdf

20. Johan De Beule, Pro Natura , personal communication

http://www.biogas-e.be/sites/default/media/rapporten/Voortgangsrapport_2013.pdf


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4 INCENTIVES EVALUATION DENMARK


There is no information from Denmark how much is paid for permanent grassland or arable land from

the Single Payment Schemes from the first pillar of CAP and for special treatment like landscape

management from the European Agricultural Fund for Rural Development (EAFRD).

At the time of writing, there were no specific incentives in place in Denmark applying for grass. As a

result, grass-based compost (garden waste) is often free of charges. It is thus not possible to provide

an overview of incentives per grass types. Nevertheless, grass is used by some biogas plants. However,

as the price and supplying contracts vary from plant to plant, and as plant managers are typically

reluctant to provide such information, there is no official statistics on the price paid to purchase or

receive grass.

An estimation of average prices paid for various biomass types is nevertheless available in Birkmose et

al. (2013):

Grass from natural areas: 500 DKK per t DM (ca. 7.5 DKK per Euro)

Buffer zones: 1000 DKK per t DM

Roadside grass: 720 - 1.200 DKK per t DM

Garden waste: 100 - 200 DKK per t DM


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As earlier mentioned, there were no incentives, at the time of writing, applying specifically for grass in

Denmark. However, there are significant developments regarding the incentives for biogas as such.

A new Danish Energy Agreement was indeed launched in March 2012 in Denmark (Danish Ministry of

Climate, Energy and Building, 2012). The long-term goal in the Energy Agreement is that the entire

energy supply is to be covered by renewable energy by 2050. The Agreement comprises a variety of

initiatives, some of these covering biogas and a plan for its expansion. Among others, the following

initiatives are mentioned:

Funding of biogas for CHP to continue

Introduction of subsidy equality so that biogas sold to the natural gas grid receives the same

subsidy as biogas used at CHP plants

Introduction of a new subsidy when biogas is used in industrial processes or as a fuel for

transport

The start-up aid for new biogas projects has been increased from 20 % to 30 %

A task force has been established with the view of studying and supporting specific biogas

projects

The Danish AgriFish Agency (under the Ministry of Food, Agriculture and Fisheries of Denmark) (2012)

has funding for biogas plants corresponding to 242 million DKK (ca. 32.3 Mio EU, using a conversion

rate of 7.5 DKK per Euro); (funding for establishment of new biogas plants) (Danish Ministry of Food,

Agriculture and Fisheries, 2012). All uses of the biogas are supported (and not only electricity). The

support is in the form of a minimum price or price supplements depending on the use of the gas. The

latter is paid on the basis of measurements, and recipients must meet certain requirements

Below are some of these subsidies, in quantitative terms, with the rates of 2012:

Biogas used for electricity production:

o Base support (fixed tariff of 0.793 DKK per kWh or a price supplement of 0.431 DKK

per kWh), plus;

o Supplement of 0.260 DKK per kWh (this supplement is reduced by 1 DKK per kWh

when the price for natural gas increases by 1 DKK per kWh (on top of the variable sale

price for electricity in the market), plus;

o Supplement of 0.100 DKK per kWh (this supplement is reduced by 0.02 DKK per kWh

from 2016, until it becomes zero in 2020)


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Delivery to the natural gas grid:

o Base support of 79 DKK per gigajoule (GJ) of upgraded biogas delivered to the natural

gas grid.

o Same supplements as in the case above where biogas is used for electricity production

o Purified biogas supplied to a town gas grid, will receive the same supplement as biogas

supplied to the natural gas network.

Transport:

o Base support (fixed tariff of 39 DKK per GJ of sold biogas), plus;

o Supplement of 26 DKK per GJ of sold biogas (this supplement is reduced by 1 DKK per

GJ when the price for natural gas increases by 1 DKK per GJ), plus


GJ from 2016, until it becomes zero in 2020)

Process Purpose in companies:

o As for transport. The receiver of the support must fulfil some specific requirements.

Other uses:


GJ when the price for natural gas increases by 1 DKK per GJ), plus


GJ from 2016, until it becomes zero in 2020)

Because of the differences in taxes applied whether the energy is produced from biogas or from fossil

sources, it can be said that biogas also benefits from “indirect incentives” (Danish Energy Agency,

2014). Based on price levels of 2012, the Danish Energy Agency (2014) calculated the difference of

such fees to be paid by a decentralized CHP plant runs on natural gas versus one run on biogas: it

amounted to a non-negligible difference of 172.6 DKK per GJ.

Furthermore, it should be mentioned, that it is a condition of the commitment of funding that manure

from livestock accounts for at least 75 % of the biomass used for the production of biogas (measured

in tonnes, yearly average) (Danish Ministry of Food, Agriculture and Fisheries, 2012b; § 11, § 15 and §

16). This could thus been seen as an indirect incentive for using “new” residual biomasses such as

grass.


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4.3 EFFECTIVENESS AND CHALLENGES IN DENMARK

The following is a summary of the recent findings of the Danish Biogas Taskforce, as published by the

Danish Energy Agency (2014). It is not specific to grass as a substrate to biogas, but to the challenges

of biogas expansion as such, in the Danish context. According to this, key barriers include biomass

availability, gas prices, administration and finance.

First, biogas can be incentivized through its use in CHP, as biomethane in the natural gas grid, or as a

process fuel in the industry. Yet, all these uses involve some challenges. When targeting the combined

heat and power market, biogas producers have a hard time to compete with cheaper alternatives to

natural gas such as wood chip boilers. On the other hand, the upgrading costs to get a biomethane

meeting all quality requirements for the natural gas grid are rather prohibitive (ca. 1 DKK per m³

methane; Danish Energy Agency, 2014). The use of the biogas for industrial processes is less attractive,

since less incentivized.

In spite of the new 2012 incentives, potential biogas project developers may be discouraged to go

forward because of some economic difficulties. First, the 10 DKK/GJ and 26 DKK per GJ incentives are

gradually decreasing till 2020 (assuming natural price increases for the latter), while bank and financial

institutions are often reluctant to lend money for biogas projects, these being frequently judged as

risky (Danish Energy Agency, 2014). The need to bear the cost for the establishment of all needed gas

and district heating pipes is also pointed out as a major barrier by the Danish Energy Agency (2014).

Biogas is also subject to extensive energy, environmental and agricultural regulations. Planning for new

plants is a time consuming process and a challenge for both operators and authorities (Danish Energy

Agency, 2014). Another source of challenge pointed out by the Danish Energy Agency (2014) lies in the

use of the digestate: as the use of organic fertilizers are heavily regulated in Denmark, it is anticipated

that it may be difficult to find an avenue for using the digestate as a fertilizer source; many cash crop

farmers may indeed prefer to use mineral fertilizers in the endeavor to lower the regulation burden.

In the perspective of expanding the biogas capacity, it becomes a challenge to find suitable biomass to

supplement the slurry in order to obtain sufficient gas production. Deep litter and straw are included

in significant extent in the plans for both existing and new biogas plants. These biomasses can

potentially replace energy crops and industrial waste as a basis for biogas development, although long-

term evidence of financial viability and operating experience are still missing for these new substrates.

This also applies for residual grasses, although these are not yet a part of existing plans. Biogas typically

costs 130- 142 DKK per GJ to produce (and 154- 166 DKK per GJ in upgraded form). As a fuel for heat

production alone, biogas is clearly not a competitive alternative to other renewable sources for heat

production such as solar heating, wood chip boilers and geothermal heating.


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4.4 REFERENCES

Birkmose T, Hjort-Gregersen K, Stefanek K (2013). Biomasse til biogasanlæg i Danmark - på kort og

langt sigt. Agrotech. http://www.ens.dk/sites/ens.dk/files/undergrund-forsyning/vedvarende-

energi/bioenergi/biogas-taskforce/biomasse_til_biogasanlaeg_endelig_version3_2_0.pdf

Danish Energy Agency (2014). Biogas in Danmark – status, barrierer og perspektiver.

http://www.ens.dk/sites/ens.dk/files/undergrund-forsyning/el-naturgas-

varmeforsyning/Energianalyser/nyeste/biogas_i_danmark_-_analyse_2014_web.pdf

Danish Ministry of Climate, Energy and Building (2012). Energiaftalen 22. Marts 2012. Danish Energy

Agency, Danish Climate and Energy Policy, http://www.ens.dk/politik/dansk-klima-

energipolitik/politiske-aftaler-pa-energiomradet/energiaftalen-22-marts-2012

Danish Ministry of Food, Agriculture and Fisheries (2012). Fordeling af midler til biogas.

http://naturerhverv.dk/servicemenu/nyheder-og-presse/nyheder/nyhed/nyhed/fordeling-af-midler-

til-biogas/and

http://naturerhverv.dk/fileadmin/user_upload/NaturErhverv/Filer/Tilskud/Projekttilskud/Landdistrik

ter/Vejledning_Biogas_maj_2012.pdf

Danish Ministry of Food, Agriculture and Fisheries (2012b). Bekendtgørelse om tilskud til biogasanlæg

m.v. BEK nr 293 af 27/03/2012 Status: Gældende. Offentliggørelsesdato: 29-03-2012.

https://www.retsinformation.dk/Forms/R0710.aspx?id=141185&exp=1#Kap5


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5 INCENTIVES EVALUATION PORTUGAL



In urban areas greenery cuttings are coming from large private and public green areas, roads,

households, airports, sport and golf areas and its treatment and disposal is largely dependent on the

solid waste system.

Since a long time, municipalities have been responsible for the urban solid waste management in

Portugal, including greeneries.

Portugal does not have specific legislation for green wastes, they are classified generally as biowaste.

So, the green cuttings in municipal consequently represent a considerable transportation and disposal

cost for its producer. It cannot be traded without the consent of the local waste management

company. No direct legislative incentives exist to promote any greenery valorization.

The collection of solid wastes is frequently not source separated in Portugal.

Consequently a considerable amount of green wastes from small producers (household greeneries) is

poured in municipal container and collected to the treatment system.

When private producers have green cuttings amounts higher than the accepted limit by the municipal

container (from 120 litre until a limit of 1.0 m³), some municipalities or management systems collect

these green wastes separately. This collection is often requested to the managing body of the system

through a phone number called "número verde". For instance, the municipality of Estarreja, located in

Aveiro District, through its phone collects greens from sweepings, cuttings and maintenance of the

private gardens, provided they are well packed, until a quantity limit of 1.0 m³, covering a single fee of

6.73 EUR per m³. In other places the price vary to 8- 10 €/m³. Others municipalities like Cascais, does

not apply any charge, in order to prevent that the green wastes are left and dry on the road, causing

spread and defile of the public areas. In any case the small producers are not charged additionally for

treatment and disposal.

The scenario is completely different for the big producers (municipalities, greenings cutting

companies) which have to transport on their expenses to the ecocenter and pay a gate fee for

treatment and disposal.

5.1.2 GRASS FROM ROADS AND GREEN MUNICIPAL AREAS

The delivery of grass from roads and green municipal areas in a treatment plant (composting

landfilling, anaerobic digestion or incineration) of the local waste management company imply a gate

fee, according with the company, which is variable: from 20 EUR to around 60 EUR per ton for grass.


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The price varies according to the end use of grass. The lower costs occurs when the grass is delivered

to a composting company. In some cases, when this feedstock is essential for composting, no fee is

applied.

The gate fee constitutes a strong charge for the municipality, which collects waste and for private

companies. Some municipalities try to release its greeneries to home composting people and try to

dispose it, as much as possible, in its humus deficient territory area.

Due to high costs, the companies in charge for removing vegetation from park and riverbanks close or

even inside the towns, frequently favours green wastes pulverising, burying, mulching or in place

composting, instead of carry and transport and delivery the cut wastes to an authorised collection

centre. The greens left in the place act as fertiliser, protect and increase the “humus” layer of the soil.

This solution is more economical. The competition between companies acting in the green cutting and

harvesting is strong. The prices charged for these services are low and frequently not enough to pay-

back, removal, transportation and delivery.


According to the new PAC (Política Agrícola Comum, 2014- 2020) Portugal will have available an

amount of 8.100 Mio. € (2.2 % of EU). Direct payments will continue to be attributed to the farmers. A

greening payment is also introduced for best environmental agriculture practices and young farmers

have a specific financial envelope.

1. Natura 2000 payment

In Portugal, areas classified as "Natura 2000" area represent 21 % of the national territory. In addition,

19.5 % of the forest area and 18.4 % of the utilized agricultural area (UAA) of the continental region

lies in this classified area. In the greater Lisbon Area, due to intense urbanization, the protected areas

are involves 26,177 ha, mainly concentrated in the Sintra and Cascais coastal zone, Tagus estuary. In

the South bank of Tagus there is a protected area close to Caparica coast. Thus, in accordance to the

article 31 of the European Agricultural Fund for Rural Development (EAFRD) Regulation, a Natura 2000

payment is assigned. The amounts are not yet completely defined, but are expected payment levels

differentiated by the degree of conditioning of agricultural activity.

2. Greening payment

The new PAC 2014- 2020 includes a “greening payment” for the sustainable management of natural

resources. Green payment must represent up to 30 % of national envelope for direct payments.

Farmers can benefit if three conditions are fulfilled:

- Crop diversification (10- 30 ha: 2 crops; more than 30 ha: 3 crops);


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- Maintaining permanent pastures intended to sink carbon and maintain biodiversity;

- 5 % of arable land crop land (not pasture or permanent crops) per farm shall be designated as

“ecological focus area” (EFA).

3. Maintenance in less-favored areas

Farmers can benefit from subsidies to maintain agricultural activity in less-favored areas (inside and

outside the Natura 2000 network). The amounts awarded vary depending on the eligible area and the

location, being awarded (2013) a subsidy from 20 EUR per to 320 EUR per ha.

4. Change in the production method

In 2013, crops intended for permanent pasture were supported from 26 EUR per ha up to 172 EUR per

ha if an integrated production method or a biological method was applied.

5. Grass as energy crop

According to the IFAP I.P. in 2013 energy crops can receive an aid corresponding to a unit amount of

45 EUR per ha. In Portugal cultivation of grass is not specific mentioned in the legislation governing the

energy crops promotion, but can be considered on it.

Regarding the cut greenings there is not any specific direct incentive in Portugal for using energetic

crop or grass in anaerobic digesters for co-digestion. The grass receives the same incentives and

support as the solid wastes in Portugal, once it is assumed as bio waste. It means that bio waste has

received a strong financial support from cohesion funds to invest in AD and the biogas output is paid

by a relatively attractive feed inn tariff. A considerable part of the grass ends in solid waste digesters -

directly or indirectly - and contributes to increase biogas production and is submitted to a favorable

treatment and disposal solution.

6. Soil conservation

Financial support is provided to farmers practicing direct seeding or mobilization in line, in the case of

temporary irrigated or dry crops (minimum area of 5 ha), or in permanent crops, when a green cover

is sown between rows (minimum area of 0.3 ha). The allocation of these grants follow a set of criteria

that must be met in order to promote the soil conservation. Maximum levels of support are 900 EUR

per ha for specialized permanent crops, 600 EUR per ha for annual crops and 450 EUR per ha for other

agricultural occupations. Grass crops can be proposed to be used in this purpose.


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5.2 ENERGETIC USE OF GRASS IN BIOGAS PLANTS

5.2.1 NATIONAL FINANCIAL PROGRAM – BIOGAS PLANTS CONSTRUCTION

The Program “Quadro de referência Estrategico Nacional“(QREN) approved by the Resolution of the

council of Ministry nº 86/2007 is an important tool prepared by the government, in order to stimulate

a progressive evolution and modernization in three relevant thematic areas: Valorization and

promotion of the human potential and scientific knowledge; Increase of economic and socio-cultural

competition and innovation capacities; and development and qualification of territory.

This strategic plan was financially supported by the structural and cohesion EC funds in the period

2007- 2013. Its execution is based on operational programs offering financial opportunities, which can

constitute a favorable opportunity for investing in AD. In the case of sludge and municipal solid wastes

digesters provided a financial support variable between 70 and 75 % of the eligible investment.

5.2.2 INCENTIVES FOR PRODUCED ENERGY

Portugal already met the target set for 2020 for the production of electricity, i.e. records of total

production of electricity from renewable sources of 41.2 % (2010). After an auspicious past, the

present time is bleak. The economic and financial crisis that befell the country - in 2010, forced a

renovation request by the Troika - did brake sharply deepening energy conversion, on several fronts:

i) The Government, through the DL 25/2012, suspended until 2014 all applications for injection into

the electricity grid does not yet approved at the time of its entry into force.

ii) For existing contracts, introduced reductions in tariffs for energy from different renewable sources

(micro generation photovoltaic, biogas, Eolic etc.).

In order to allow biogas use for electric energy, the government created a regime for self-consumption

of electricity with simplified authorized procedures, which provides attractive returns in digesters co-

financed from cohesion funds. This way the government saves money in feed-in tariffs in this difficult

period and, at the same time, allows biogas production and electricity selling.

5.2.3 FEED-IN TARIFF – LARGE PLANTS

The electricity from renewable sources in Portugal is mainly promoted through price-regulation in

terms of a feed-in tariff, and operators of renewable energy systems are contractually entitled against

the grid operator to payment for delivered electricity, based on a purchase of electricity contract at a

statutorily set price. The feed-in tariff consists of two elements: a guaranteed payment rate and an

amount calculated by a statutorily set formula.


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The price regulation is defined in DL 225/2007 and revised in DL 35/2013. For the biogas technologies

promotion cannot exceed a total eligible amount of 20 MW for landfill gas and 150 MV for biogas from

fermentation of solid municipal waste, sewage sludge, waste water and waste from the agricultural

and food industries. The predicted amount is enough to finance biogas production from available

wastes in large scale system, biogas potential from sludge anaerobic digesters, existing landfills and

future solid waste digesters. It should be increased to allowing further increase of biogas production

by integrating energetic crops to feed digesters or by promotion of small-scale initiatives. This

established quote is essentially driven by the need to fulfill the environmental obligations for solid

wastes, established by the National Plan on solid wastes (PERSU II). This way it provides an additional

contribution to fulfilling the target established in the EC directives, in terms of reduction of

biodegradable organics landfilling.

The renewable power stations, which are integrated in the biogas plants, are remunerated for

providing electricity to the grid through a complex formula defined in DL 35/2013 of 28 February.

The guaranteed feed-in tariff, in cases of Biogas from fermentation of solid municipal waste, sewage

sludge, waste water and waste from the agricultural and food industries the amount of payment

calculated by using the complex formula provides for (<20 MW power) approximately, the following

feed-in tariffs:

Table 4: Remuneration for power input from biogas plants by DL 35/2013

Source of biogas Basic remuneration (2013)

Digesters 11,7 ct/kWhel

Landfill ≤ 150 kWel 10,4 ct/kWhel

The period of Biogas payment corresponds to the first 15 years of operation. This tariff provides an

income independently of the use of the excess available heat, digestate application and emission gases

control. The price depends only on the produced electric energy and the conditions of delivery.

The proposed price is substantially lower than used in European countries where biogas technology is

widely applied. The structure of the tariff does include any bonus to encourage source waste

separation, energy recovery efficiency and does not promote additional valorization of digested waste.

This approach is favorable to large scale solid waste digesters, when the costs for solid waste collection

and transportation are charged to the consumers and a portion of investments can be obtained from

others funding sources.

The potential return can be attractive only if the investment regards the equipment for cogeneration

and electricity production. The digesters cost should be financed by others mechanisms, to make it

refundable with this tariff.

So, anaerobic digestion today is generally attractive for sludge and municipal solid waste treatment.

Operators have, as main concern, to solve environmental problems and are capable to obtain financial

incentive for digesters construction from others funding programs.


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The possible revenues obtainable with the established does not constitute a potential attractive

business opportunity for producing biogas from others wastes and is not enough to make feasible

investments in bio waste co-digestion, discouraging initiatives.

The national tariff for electric energy produced by AD cannot be joined to any other additional funding

financial programs for private operators, to make the project implementation viable. When this is

consented, it requires separation of costs for agricultural and environmental components from the

energy related investments, making refundable only a portion of the invested capital. The procedures

necessary to compete for funding programs are time-consuming, costly and do not allow a safe

planning of the facility.

For all the above referred reasons the private investment on integrated anaerobic digestion systems

and biogas production facilities based on agricultural crops is still not attractive in Portugal and not

refundable during a reasonable period of time (15 years), even at large and medium scale. The fixed

price does not allow a payback of the cost for collection and transportation. This situation is

unfavorable to GR3 projects objectives.

Improving the revenues provided by biogas project should be included in the list of priorities of political

agenda and should contemplate all the valuables components carried-out from these projects: waste

collection, nutrients, energy, crops, land restoration, avoided emissions, innovation, etc.).

5.2.4 Feed-in- tariff – Mini production of electricity

Portugal has another main mechanism to financing AD plants, with a well-defined regulation. The feed-

in tariff can be also applied to subsidize regime for micro and mini-generation

The activity of decentralized micro/mini electricity facilities through small power installations, is

regulated by DL no. 363/2007 of 2 November, which was amended by DL no. 118-A/2010, of 25

October, by DL no. 34/2011 of 8 March DL no. 34/2011 and by DL no. 25/2013 of February 19. The

concept of mini-generation involves production of energy from renewables, based on a single

production technology, and the power connected to the grid must be equal or less than 250 kW. The

power must not exceed 50 % of the contracted power for the consumer installation.

There are remuneration schemes: the general and the subsidized. In the subsidized regime, which is

more popular, the payment is based on the reference price that is valid on the date of issue of the

exploitation certificate.

In the subsidized regime, there are three levels to be considered, depending on their power:

- level I: for plants not exceeding 20 kW;

- level II: for plants between 20 and 100 kW;

- level III: for plants over 100 KW and less than 250 kW.


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The Decree-Law No. 34/2011 established the payment of micro-generation systems through a

subsidized rate, whose value is a function of the power level of the facility and the type of employed

technology for production. For level I, the remuneration is directly based on a reference tariff that is

valid on the date of issue of the exploitation certificate. For levels II and III, the remuneration is based

on an auction process, in which the rates of discount are proposed by the producers.

Every year it is established the power that can be kept for mini generation. The producer must also

prove that an energetic audit has been done and that the energetic efficiency procedures have been

implemented. The procedures and interactions are also settled in an electronic way.

After the first 15 years of operation of a mini unit, energy has to be sold at the market price, the same

conditions of large power plants. The price is applicable for a total of 15 years, beginning on the first

day of the month following the connection to the grid. This period is divided in two: the first one lasts

for 8 years and the second one for the remaining 7 years.

The aim is always to protect new technologies, until a new industry cluster is established, thus reducing

the costs of mini generation assets.

The mini-production from biomass is paid at 60 % of the reference price according to DL 34/2011,

suffering this rate decreased by 7 % annually, as defined by Ordinance No. 430/2012. In 2014 the

reference price was set at 159 EUR per MWh.

5.2.5 Green Energy Certificate (GSC)

Since 1st of December of 2003 the national grid operator (REN) is currently responsible for RECS

(Renewable Energy Certificate System) and allowed to emit certificates. This entity is member of the

AIB (Association of Bodies Issuing Entity). In the area of electricity the Green Energy Certificate is yet

not available to renewable energy producers in Portugal, such as biogas plants.

It is expected that Green certificates will substitute the feed-in tariff used actually.

5.2.6 COMBINED HEAT AND POWER CERTIFICATES (WKC)

This option is at the moment unavailable in Portugal.


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5.2.7 SELF-CONSUME OF ELECTRICITY

The Decree-law N 237 of 2013 of July 24 on simplified licensing self-consumption introduced a relevant

benefit on electricity production from biogas. The licensing procedure or electro producers units with

less than 1 MVA power relies just on declarations of commitment and is supported by an electronic

decision tool, facilitating the auto consume of the generated electricity.

With this decree, the production of electricity and its use in decentralized facilities through small

power installations, as occur in wastewater treatment or SW plants, is now easily authorized, especially

in public company facilities. These units need a cogeneration system for heating the digester and the

electric energy is an interesting bonus, to attenuate treatment costs.

This way the government avoids spending subsidies for promoting. The biogas producers can save on

the electricity bill, obtaining relevant savings, according to the time of release.

Table 4 shows the price of the electricity according to the national tariff for medium voltage trading.

The electric energy is used in the treatment systems saving the cost of electric energy. Normally the

produced electric energy is used in peak energy demand period, were the cost of electric energy is

higher, much more that the price fixed by the renewable feed-in tariff.

More information can be found in DL 237/2013, which gathers all legislation relating to electricity

generation under this special regime.

Table 5: Remuneration for medium voltage power-long use tariff

Time period Time of release Basic remuneration (2014) €/kWhel

Peak time 0,1287

Periods I, IV Full hours 0,1004

Partial off-peak time 0,0708

Off-peak time 0,0604

Peak time 0,1316

Períods II, III Full hours 0,1030

Partial off-peak time 0,0735

Off-peak time 0,0677


37 IEE/12/046/SI2.645700 – GR3

5.3 EFFECTIVENESS AND CHALLENGES IN PORTUGAL

The evolution of the Portuguese framework over the past two decades, the process of energy

conversion set in motion already allowed Portugal to reach an honorable place in the context of the

European Union, in terms of meeting targets on weight of renewables in final energy consumption.

Wind, solar and hydroelectric are the main renewable sources. Moreover, also managed to produce a

shared awareness about the role of the others energy sources in environmental terms as well as a

greater willingness on the part of private investment in this sector and, in general, the market called

“green economy ".

However the options for energy policy in Portugal, particularly with regard to investment in energy

production from biomass renewable sources, are not yet fully consolidated and therefore the focus on

development of renewable energy is still - to some extent - dependent on fluctuations not only of the

economic cycle, but also political.

For AD plants the potential return can be attractive only if the investment regards the equipment for

cogeneration and electricity production are covered by adequate tariff. The digesters cost must be

financed by adequate alternative mechanisms to have the system feasible. So, anaerobic digestion

today is attractive only for sludge and municipal solid waste treatment operators having, as main

concern, to solve environmental problems and fulfill the targets fixed by the directive on landfill

reduction. The cohesion funds provide high financial incentive for digesters construction and the solid

waste collection and transportation costs are covered by the consumers. Green grass wastes are

involved in this layout and are already partially valorized in AD plants. The main concern is to increase

the delivery of grass in Eco centers, which is hampered by transportation costs, discouraging this

valorization chain.

The private investment on integrated anaerobic digestion systems and biogas production facilities

based on agricultural crops are still not attractive in Portugal and not refundable during a reasonable

period of time (15 years), even at large and medium scale. Stimulate AD based on agriculture wastes

requires additional funding that the government does not want assume today. Funding AD agriculture

based system, does not increase the national production of agriculture machinery or of digesters

technology, which are almost inexistent today. So an indirect return from exporting national

technology is not expected.

The fixed price obtainable from the sale of electricity does not allow paying back the cost for collection

and transportation. This situation is unfavorable to the objective GR3 project. Improving revenues

provided by Biogas facilities should be included in the list of priorities of political agenda and should

contemplate all the valuable components carried-out from these projects: waste collection, nutrients,

energy, crops, land restoration, avoided emissions, innovation, heat, etc.).

In this framework the success of green grass valorisation is hard to achieve, and need a specific

regulatory legislation and promotional measures to overcome existing barriers and increase its use in

AD. The gate fee should be removed and a bonus for grass digestion should be implemented in order

to motivate grass operators to deliver its cuttings and obtain some profit. It is important to emphasize

that a ton of grass from frequently cut gardens represents an economic values range of 40- 50 Euro


38 IEE/12/046/SI2.645700 – GR3

from electric energy sale. Additionally in Portugal the surplus heat from AD has generally no profitable

use, and a part of benefits are lost. The legislation should encourage or oblige, as in Germany and

Belgium, the commercial use of this heat. These measures will change completely the perspectives of

GRASS to AD.


39 IEE/12/046/SI2.645700 – GR3

5.4 REFERENCES

1. [Online] http://www.gpp.pt/PAC2013/.

2. [Online] http://www.ifap.min-agricultura.pt/portal/page/portal/ifap_publico/GC_ajudas.

3. [Online] http://www.ifap.min-agricultura.pt/portal/page/portal/ifap_publico/GC_drural.

4.[Online]http://www.ifap.min-

agricultura.pt/portal/page/portal/ifap_publico/GC_ajudas/GC_montantes/GC_montantes14.

5.http://www.erse.pt/pt/desempenhoambiental/prodregesp/Paginas/DivulgacaoMensaldeInformac

aosobreaPRE.aspx.

6. [Online] http://www.cm-estarreja.pt/seccao.php?s=hl_recolha_seletiva.


40 IEE/12/046/SI2.645700 – GR3

6 INCENTIVES EVALUATION ITALY



According to the Italian legislation grass mowed and collected in urban areas, for example originated

from parks and gardens, cemetery areas, sportive and other recreational areas and roadside, private

household gardens/courtyards is a waste (European Code 20.02.01) and should be collected and

properly disposed of. The stringent and compulsory request for treatment is however limited to grass

collected along roadsides while the rest of grass can be left in place. This last technique is particularly

used in managing parks and gardens because of two main reasons: the high costs of transportation

and treatment of grass in composting plants (around 60 EUR per ton of fresh material in 2013-2014)

and the recovery of humidity and nutrients on land (mulching).

Green waste is collected by public and/or private companies and is paid by citizen. The collected

material is then treated in dedicated treatment facilities: these can be owned by the same companies

involved in collection, or not.

The cost for biological treatment of green or bio waste in anaerobic digestion plants is typically in the

range 70-80 EUR per ton.

In the Veneto Region there is at the moment only one experience of waste grass treatment in

anaerobic digestion (Bassano del Grappa plant, ETRA Spa).

Produced biogas is then converted into electricity and sold to the energy net: Companies managing

anaerobic digestion plants for waste normally get incentives in the form of “green certificates” a

counter-value for renewable energy sold in the market. The 2013 price was 89.28 EUR/MWh sold.

Because of the relatively low energetic density of grass and feed in tariff for energy produced by biogas,

grass is normally not used as a feedstock for treatment plants so these incentives are only theoretically

applied to grass.


There is no information from Italy how much is paid for permanent grassland or arable land from the

Single Payment Schemes from the first pillar of CAP and for special treatment like landscape

management from the European Agricultural Fund for Rural Development (EAFRD).


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6.2.1 ANAEROBIC DIGESTION PLANTS IN OPERATION SINCE 2009

According to the decree July 23th 2009 for renewable energy the tariff for biogas in the agricultural

sector (no waste here!) was 280 EUR per MWh electric energy per 15 years for plants with an installed

power up to 999 kWh and using biomasses recovered within 30 km from the farm where the plant is

installed.

6.2.2 ANAEROBIC DIGESTION PLANTS IN OPERATION SINCE 2012

After decree July 6th 2012 the new legislation for tariffs in the biogas sector has been strongly revised.

The main points to be considered are the following:

a) There is an annual global figure for installed power from renewable energy: it was 160 MW for

2012, then 150 MW for 2013 and so on. So biogas is one of the “renewable” (beside solar,

wind, biomass combustion …) and any new AD plant > 100 kW should be authorized

considering the global figure given above. If you don’t get the authorization you can build the

AD plants but you will not have incentives;

b) Incentives are prolonged for 20 years (instead of 15);

c) As for anaerobic digestion, there is a difference in tariffs depending on the origin of biomass

feedstock: the difference is between by-products / waste (e.g., organic waste, food waste,

livestock manure, agricultural by-products …) and products (like crops).

d) There is a difference depending on the AD plant size in terms of installed power (electric

energy)

e) There is an extra-tariff (bonus) related to heat recovery (10 EUR per MWh) and nitrogen

removal/recovery: the main idea is that you get 30 EUR per MWh when you recover nitrogen

(like ammonium sulfate for example) and 15 EUR per MWh when you remove nitrogen (like in

biological processes for nitrogen removal);

f) In any case there is a reduction of 2 % per year starting from 2012 and 11 % for internal

consumption (always!) so the figures given in table are clearly lower in reality!

g) There still some missing “rules” around the decree and misinterpretation


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Table 6: Incentives for organic waste and bio-products

Installed power (kWe)

Incentives duration (years)

Basic biogas fee (€/MW)

Heat recovery (CHP) (€/MWh)

Nitrogen recovery/removal (€/MWh)

(-60%N+CHP-30%N+CHP-40% N)

1<P300 20 236 10 302015

300<P600 20 206 10 302015

600<P1.000 20 10 302015

Table 7: Incentives for biological products (like crops)

Installed power (kWe)

Incentives duration (years)

Basic biogas fee (€/MW)

Heat recovery (CHP) (€/MWh)

Nitrogen recovery/removal (€/MWh)

(-60%N+CHP-30%N+CHP-40% N)

1<P300 20 180 40 302015

300<P600 20 160 40 302015

600<P1.000 20 140 40 302015

6.2.3 ANAEROBIC DIGESTION FOR BIOMETHANE GENERATION (AFTER 2013)

On December 5th 2013 a new decree regarding biogas upgrade for biomethane generation came in

force in Italian legislation. Up to date, the “technical rules” and the tariff of the incentive are not

defined so biomethane is not a reality.

6.2.4 EFFECTIVENESS OF INCENTIVES IN ITALY

In the following 3 years after the decree of July 23th 2009 for renewable energy some 1000 new AD

plants were built, for a global installed power around 800 MW (electric energy).

Because of the complicated framework and uncertainties after the decree of July 6th 2012 only few

new plants were built in the last 2 years.

We may consider also the fact that, as stated above, different incentive tariffs are recognized even if

the material is waste or is a by-product.


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6.2.5 INDICATION ABOUT THE COSTS INVOLVED TO THE DELIVERY OF GREEN CUTTINGS

(PUBLIC) OR FROM AGRICULTURAL ORIGIN

The materials on topic are classified as wastes or not. It depends on specific circumstances. The costs

for the assignment to plants as the case may be zero, positive or negative.

It must be emphasized that before the diffusion of biogas plants, green public residue was given as

waste to composting plants, paying to the plant a cost of placing. And this occurred in particular by

public bodies, which gave to installations typically owned privately and then with a range of prices

quite variable. Costs were zero instead of green management of agricultural origin which was used to

easily and directly within the same farm.

The market needs time to be able to deal and overcome various circumstances currently present.

Today therefore it cannot be a general case study and standard costs. Today different incentive tariffs

are recognized even if the material is waste or is a by-product. In addition today there is a decrease in

access to material composting plants as you prefer going to the biogas plant, which could further

modify the logic of the price.


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7 SUMMARY OF THE MAIN FINDINGS


In Flanders subsidies for grassland and to maintain grassland and to protect wildlife, soil and animals

is paid. But yet there is no effect on using grass in biogas plants.

There were no specific incentives in place in Denmark applying for grass. As a result, grass-based

compost (garden waste) is often free of charges. Nevertheless, grass is used by some biogas plants.

In Portugal waste is not always separated. Small quantities of greenery cuttings (less than 110 l) are

collected at no cost to the waste system or send to the Ecocenter, being treated by AD, when a plant

is available. Municipality pays a gate fee to the company for waste treatment and management. There

are some payments to maintain landscape protection areas. Grass from roads and green municipal

areas have to pay a gate fee and today there is low use of this grass in biogas plants. Operators

generally ignore that grass may represent an economic values ranging from 40 to 50 Euro through

electric energy sale. In Portugal the legislation should remove the gate fee and provide a bonus for

grass digestion. Additionally the use of surplus heat from digestion should be commercialized. These

measures can change completely the perspectives of grass to ad.

In Italy greenery cuttings are separately collected and declared as waste and sometimes composted.

In the Veneto Region there is at the moment only one experience of waste grass treatment in

anaerobic digestion

In Germany grass from greenery cutting is refinanced via direct private payments or waste fees. The

budget for composting greenery cutting can also be used for technologies like methanisation. But in

Saarland the digestion of grass from greenery cuttings is not practiced yet. The payments to maintain

landscapes helps creating an incentive effect to recover grass from these extensive locations. There is

no use of this grass residues in Saarland but in other states of Germany in combination with electricity

feed in tariffs (EEG 2009- 2011) for landscape materials!


45 IEE/12/046/SI2.645700 – GR3


There is no additional direct subsidy related to the energetic use of grass residues in biogas plants in

Flanders. Subsidies applicable to grass biomass are the same as for other biogas feedstocks.

No incentives are applied specifically for grass in Denmark. However, there are significant

developments regarding the incentives for biogas as such.

The fixed price obtainable from the electricity selling does not allow paying back the cost for the

collection and transportation of grass in Portugal. This situation is unfavorable to GR3 projects

objectives. In this framework the success of valorisation of the green grass is hard to achieve, and need

a specific regulatory legislation and promotional measures to overcome existing barriers and promote

its use in AD.

In Italy with the decree of July 23th 2009 for renewable energy the tariff for biogas in the agricultural

sector (no waste here !) was 280 EUR per MWh electric energy per 15 years. In the following 3 years

after the some 1000 new AD plants were built, for a global installed power around 800 MW (electric

energy). Because of the complicated framework and uncertainties after the decree of July 6th 2012

only few new plants were built in the last 2 years.

Extra promotion of energy crops methanisation for feeding into the power grid started in Germany

with the Renewable Energy Sources Act (EEG) in 2004. Due to changes in the German EEG act in 2009

and 2012 and now in 2014 the payment system changed too. This influenced always the amount of

grass from different origins used in biogas plants and the increase of new installations.


46 IEE/12/046/SI2.645700 – GR3

8 LIST OF ABBREVIATIONS

AD Anaerobic Digestion

ct cent

ct/kWh cents per kilowatt hour

DL Decree Law

DR. “Declaração de Correção” or Statement of Correction

€/ha euro per hectare

€/m3 euro per cubic meter

FM fresh matter

kWel. kilowatt electrical power

kWhel kilowatt hour of electricity

SAWG Saarländisches Abfallwirtschaftsgesetz – Waste Management law for Saarland

t ton

incentives evaluation report

Documents

incentives evaluation

ni leaci ni

gr3 project website

gr3 disclaimer

cette publication nengage

eaci noch

european commission

european union