The European Commission has today (Monday, August 8) approved a €4.5 billion scheme to support biomethane production in Italy.

The scheme, which was made available through the Recovery and Resilience Facility (RRF), is part of Italy’s strategy to reduce greenhouse gas (GHG) emissions and increase its share of renewable energy.

Aid provided by the EU will promote the construction and operation of new or converted biomethane production plants, and the use of sustainable biomethane in the transport and heating sectors.

Executive vice-president, Margrethe Vestager said the scheme will also help reduce the EU’s dependence on Russian fossil fuels, and accelerate the green transition. She said:

“The Italian aid measure will help Italy meet its emission reduction targets, reduce its dependence on Russian fossil fuels, and improve its security of gas supply while limiting possible distortions of competition.”

The scheme will run until June 30, 2026 and is partly funded by the RRF, following the commission’s positive assessment of Italy’s Recovery and Resilience Plan, and its adoption by the European Council.

Biomethane production

In order to qualify for aid in the form of investment grants of €1.7 billion in total, and incentive tariffs with a total budget of €2.8 billion, biomethane production must comply with the requirements set out in the EU Renewable Energy Directive.

Investment grants covering up to 40% of the eligible investment costs will be paid at the end of the construction phase, while incentive tariffs (€/MWh) determined on a pay-as-bid principle will be paid during the operational phase for 15 years.

The projects will be selected through a bidding process, whereby beneficiaries will compete for the lowest amount of the incentive tariff needed for an individual project to go ahead, the commission said.

Meanwhile, the commission also approved €149 million under the RRF to support renewable hydrogen production in Romania.

The scheme will run until December 31, 2023, and aims to help the country in replacing natural gas, coal and oil in hard-to-decarbonise industries and transport sectors.