Biomethane as an energy resource for achieving sustainable production: Economic assessments and policy implications

Abstract

Circular bioeconomy models aim to reduce dependence on non-renewable and unsustainable use of resources, involving also the inclusion of gas in the green taxonomy. Thus, biomethane represents a flexible and clean resource for combating climate change. This work aims to show that biomethane is a feasible energy resource that can meet sustainable production requirements. We perform an economic analysis on biomethane plants, obtained from the organic fraction of municipal solid waste (OFMSW) varying from 100 to 500 m 3 /h capacity, based on Net Present Value for two distinct policy scenarios in Italy: i. Certificate of Emission of Biofuel in Consumption (Baseline Policy Scenario) and ii. Tariff Premium (Alternative Policy Scenario). In addition, the Break Even Point will be calculated for the critical variables. The results show that the cost of biomethane production varies from 0.54 to 0.78 €/m 3 and the profitability changes depending on the policy scenario. The 200 m 3 /h plant is the one in which the minimum profitability condition is achieved, which significantly depends on variables such as, the size of the plant, the type of incentive, the value of the incentive, the selling price of biomethane, and the net revenue associated with the treatment of OFMSW. In addition, this work quantifies the potential for unused biomethane in Italy associated with OFMSW, which ranges from 464 to 678 million m 3 , showing that could generate economic profits from about 41 to 2068 million € and from about 59 to 3027 million € in two different scenarios (characterized by a higher rate of separate collection). Policy implications are provided to enable further penetration and development of this renewable resource.