Market & Regulatory Overview

Italian State Incentives for Biomethane

The Decree of 3 March 2018, revised in September 2022, provides a comprehensive incentive framework for biomethane injected into the national gas grid and for advanced biofuels used in transport.

• Biomethane is a green alternative to fossil methane, suitable for both light and heavy vehicles.
• Supports EU targets (Directive 2018/2021) including the transport RES quota and biofuel share.
• €1.93 billion allocated for plants becoming operational before 30 June 2026.
• At least 2.3 billion m³ of biomethane production targeted for transport & industrial uses.
• Non-repayable grant covering up to 40% of eligible CAPEX.
• 15-year price support mechanism administered by GSE.

On 30 October 2024, Algae & Algae secured a Feed-in Tariff of €1.27/Sm³ for 15 years under the “advanced biomethane” regime.

European Market Outlook (RePowerEU)

The EU aims to accelerate renewable gas to enhance energy security and affordability. The European Biogas Association (EBA) targets growth from ~3 bcm today to 35 bcm by 2030, driven by upgrades of existing biogas plants and new capacity additions.

Why Biomethane (per EBA)

• High ROI supported by state-backed tariffs and grants.
• Sustainable feedstocks (agri-residues, sequential crops, organic wastes).
• Affordability: production cost ~€55/MWh vs natural gas ~€100/MWh.
• Infrastructure-ready: leverages the existing gas grid—no large new networks needed.
• System flexibility: continuous, storable output helps balance variable renewables.
• Digestate valorization: displaces chemical fertilizers, improves soils and carbon retention, reduces import dependence.
• EU value chain & jobs: direct impact on growth and rural economies.

Scale-Up Needs by 2030

• €48 billion for ~4,000 medium-size units.
• €35 billion for ~1,000 large-scale plants.
• Feedstocks: waste streams, agricultural residues, and sequential crops.

References: GSE · European Biogas Association (EBA)