Biomethane and public policies: Which support for which production model?

Biométhane et politiques publiques: quel soutien pour quel modèle productif ?

Tom Leclercq Ollivier ()
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Tom Leclercq Ollivier: CEC - Chaire Economie du Climat - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres

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Abstract: While several articles have already examined the techno-economic characteristics of a given type of biomethane producer, this article focuses on the relationship between various producers and the support policies they may benefit from. To that end, it gives an overview of the biogas-to-biomethane industry by characterizing three production models that policymakers consider differently. Once this distinction is made, a generic production cost function is developed, and its implications regarding support policies are discussed throughout the article, with a focus on plant specific economies of scale and changing cost determinants from one production model to another. As an illustration, a qualitative analysis is conducted on the French support policies and their result since 2010. Various pitfalls to avoid when supporting the industry are then presented, including the sole focus on energy production, and alternatives are proposed. From this perspective, a dynamic vision of the industry considering the challenges posed by biomass availability is developed, and a quantitative assessment of the significant financial benefits that can be derived from biomethane by-products is conducted. A first attempt is finally made to characterize the relationship between industry related externalities, production models and support policies, which questions the interest of supporting biomethane with the same instruments that were put in place for other renewable energy sources.

Keywords: Externalities; Economies of scale; Support Policies; Biogas; Renewable natural gas; Biomethane; Biométhane; gaz naturel renouvelable; biogaz; politiques de soutien; économies d'échelle; externalités (search for similar items in EconPapers)
Date: 2025
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