New Biomethane Decree In Italy

On 15 September 2022, pursuant to the Italian Recovery and Resilience Plan (the "NRRP"), the Minister of Ecological Transition has issued a new decree (the “New Biomethane Decree”) aimed at defining a new framework for incentive measures for the development of biomethane plant by using funds available under the NRRP.

On 26 October 2022, the New Biomethane Decree has been published in the Official Gazette.

The New Biomethane Decree extends the scope of the previous regime, which was limited to biomethane used in transport also to biomethane used in the heating, industrial, residential, tertiary and agricultural sector.

In particular, the New Biomethane Decree, in order to support and promote the biomethane production provided for in the NRRP, regulates the modalities for the allocation of incentives to biomethane injected into the natural gas network and produced, in accordance with the criteria laid down in the RED II Directive, from newly built plants or biogas plants undergoing reconversion.

The most relevant measures introduced under the New Biomethane Decree for plants respecting the requirements set forth therein are:

a) a capital contribution equal to the 40% on the eligible costs of the investment incurred; and

b) an incentive tariff scheme applied to the net production of biomethane, disbursed from the date of commissioning of the plant and for a duration of fifteen years (to be calculated as indicated under the decree).

The access to the incentives will take place upon the awarding of a competitive tender procedure. The first competitive procedure is set to take place before the end of 2022, and at least 2 procedures per year are envisaged until the 2024.