The implications of economic instruments on biogas value chains: a case study comparison between Norway and Denmark

Kari-Anne Lyng, Lise Skovsgaard, Henrik Klinge Jacobsen and Ole Jørgen Hanssen
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Kari-Anne Lyng: Ostfold Research
Lise Skovsgaard: Technical University of Denmark
Ole Jørgen Hanssen: Ostfold Research

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2020, vol. 22, issue 8, No 1, 7125-7152

Abstract: Abstract This paper studies biogas value chains and the effect from various economic support instruments on these value chains. This is done by comparing two European countries that are quite similar in size, income levels and environmental ambitions, but which are using very different instruments to support biogas development. Norway provides investment support combined with support for inputs, while Danish support is focused on the biogas output side. The aim of the comparison is to clarify whether the policies in use have affected the design of biogas value chains such that they are determined by national support and are not viable under alternative support structures. Based on the findings, possible modifications of national support and other biogas regulation policy are suggested. The comparative study assesses the costs and income of an exemplary Norwegian value chain and a Danish value chain. The cases are evaluated by assessing the economic consequences of implementing the Danish instruments for a Norwegian value chain and vice versa. We find that structural and regulatory conditions have a large impact on the configuration of the value chains. The Danish value chain in Norwegian settings results in a large deficit (− 12.7€/tonne), while it was profitable in Denmark (+ 4.9€/tonne). The same is observed for the Norwegian value chain, but to a lesser extent. The policy implication of end-use support in Denmark is large-scale plants, maximising the output through co-digestion of manure and high-yield substrates, while avoiding losses. Investment support in Norway has increased biogas production from organic waste with less emphasis on efficient gas usage, while input support regarding manure has led to an increase in the usage of manure as substrate.

Keywords: Biogas; Environmental policy; Regulation; Value chain (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (7)

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DOI: 10.1007/s10668-019-00463-9

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