Incentive policies in biomethane production toward circular economy

Giovanni Catalano, Idiano D'Adamo, Massimo Gastaldi, Abdul-Sattar Nizami and Marco Ribichini

Renewable and Sustainable Energy Reviews, 2024, vol. 202, issue C

Abstract: The transportation sector is marked by high emissions, and new sustainable solutions are required to solve this problem. Biomethane, also known as green gas, has the potential to regenerate certain wastes, promoting resource circularity. This study aimed at evaluating the profitability of small- and medium-sized plants using the organic fraction of municipal solid waste (OFMSW) and by-products, considering a new incentive decree within the mature biogas-biomethane market of Italy. Net present value (NPV) was used as a key indicator, and sensitivity, scenario, and risk analyses were proposed. The results showed that a high subsidy for by-products contributed to the profitability of by-products plants across multiple contexts. Conversely, stringent incentive values for the OFMSW led to diminished profitability for plants treating this substrate. Consequently, profitability was verified for 100 m3/h plants with by-products and 300 m3/h plants with the OFMSW. The break-even point analysis showed that the tariff value determining project profitability, contingent on size and substrate, ranged from 0.61 to 0.95 €/m3 for the OFMSW and 0.76–1.01 €/m3 for by-products. The results provide valuable policy and managerial insights, emphasizing the support needed for biomethane – a renewable and circular resource – to achieve the twin goals of energy independence and a low-carbon economy. Consequently, biomethane has the potential to contribute to the achievement of Sustainable Development Goals 7 and 12.

Keywords: Biomethane; Circular economy; Economic analysis; Subsidies; Sustainability (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1364032124004362
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:rensus:v:202:y:2024:i:c:s1364032124004362

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/bibliographic
http://www.elsevier. ... 600126/bibliographic

DOI: 10.1016/j.rser.2024.114710

Access Statistics for this article

Renewable and Sustainable Energy Reviews is currently edited by L. Kazmerski

More articles in Renewable and Sustainable Energy Reviews from Elsevier
Bibliographic data for series maintained by Catherine Liu ().