Italian support scheme for advanced biofuels approved

By Erin Voegele | March 05, 2018

On March 1, the European Commission approved an Italian support scheme for the production and distribution of advanced biofuels, including advanced methane, for use in the transportation sector. The scheme has an indicative budget of €4.7 billion ($5.92 billion) and will run from 2018 through 2022.

A notice released by the European Commission notes that advanced biofuels and methane are the most sustainable and environmentally friendly biofuels, and have a much higher production cost than the fossil fuels they replace. Under the scheme, producers of advanced biomethane and biofuels receive a premium that allows them to compensate for these higher costs and complete with fossil fuels in the transportation sector. The premium can be increased if producers also make investments to improve the distribution and liquefaction of advanced biomethane.

In addition, the scheme provides incentives to farmers to produce biofuel and biomethane from manure and other agricultural residues.

The European Commission noted that the level of the premium will be updated annually in relation to production costs to ensure that producers are not overcompensated.

The scheme will be financed by fuel retailers who are required to include a certain percentage of advanced biofuels and biomethane in their fuel blend.