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Support schemes for biogas and biomethane in Flanders

biogas plant

Environment and (renewable) energy are regional competences. Hence, subsidies for biogas projects are regulated and decided on a regional level. Meaning that the system described in the following is only applicable to Flanders and not to the other two Belgian regions of Brussels and Wallonia.

As of 2019, biogas plants in Flanders can apply for financial support from the following institutions:

  1. Flemish Energy Agency (Vlaams Energie Agentschap – VEA)
  2. Department of Agriculture and Fisheries (Departement Landbouw & Visserij)
  3. Public Waste Agency of Flanders (Openbare Vlaamse Afvalstoffenmaatschappij – OVAM)
  4. Federal Public Service Finance (Federale Overheidsdienst Financiën)

The Flemish Energy Agency is the main institution to subsidize biogas in Flanders. Biogas plants processing manure from livestock may receive additional support from the Department of Agriculture and Fisheries and biogas plants processing municipal food waste may receive additional subsidies from the Public Waste Agency of Flanders.

Subsides from the Flemish Energy Agency (VEA)

As of 2019, the Flemish Energy Agency gives two kinds of financial subsidies: operational subsidies in the form of certificates for green electricity and primary energy savings as well as investment subsidies. Only newly built projects can apply for these subsidies.

Operational subsidies – The certificate system

Biogas plants apply for certificates at the Flemish Energy Agency. They then receive certificates on a monthly basis. The amount of certificates depends on the so called bandingfactor. The bandingfactor (Bf) is awarded on plant basis each for green electricity as well as primary energy savings. They remain the same throughout the period the plant receives certificates. The bandingfactors are calculated annually by the Flemish Energy Agency and are meant to account for the operational cost of a plant as well as the investment necessary for making a plant financially feasible, i.e. the higher the investment with lower IRR, the higher the bandingfactor; the lower the investment and higher IRR, the lower the bandingfactor and hence less certificates. Each year the Flemish minister of Energy ratifies the final bandingfactor for each category. This final bandingfactor can have a lower value than the calculated one.

The certificates can be either sold to the distribution network operator for a predefined minimum price or to electricity suppliers for the price negotiated between the electricity producer and the supplier.

In fall 2019 the newly formed Flemish government announced to gradually decrease this form of subsidy and abolish it completely by 2025 (for renewable electricity) and 2030 (for cogeneration).

Certificates for green electricity (GSC) - Groenestroomcertificaten (GSC)

Since 2013 producers of electricity from biogas receive GSC based on the net produced renewable electricity (EGSC), expressed in MWh, and the bandingfactor (Bf). The bandingfactor is determined by the start date of the plant, the input material the biogas is produced from and the capacity of the engine used to produce electricity.

amount of GSC = EGSC x Bf

The net produced renewable electricity is calculated considering the share of renewable resources, and the energy needed for the transportation of the feedstock, the pretreatment of the feedstock, and the ancillary services for the electricity production. Alle energy paramters are expressed in MWh.

EGSC = G*(Ebruto – Eanc) – Epre – Etrp

Ebruto: the total electricity production

Eanc: energy required for the ancillary services of the electricity production, e.g. the cooling circuit of a combustion engine

Epre: energy required for the pretreatment of the feedstock

Etrp: energy required for the transport of foreign feedstock up to the border of Flanders

Overview of the final GSC-bandingfactors since January 2019

Input material Capacity (U) Start date on or after1
1.1.2020
Agricultural or industrial 10 kWe < U 5 MWe

0.8

5 MWe < U 20 MWe 0.8
Municipal food waste 10 kWe < U 5 MWe 0.8

1start date: submission date of the application for the operational subsidy.

Certificates for green electricity are awarded for a period of 17 years for plants starting from 2020 on. There is a maximum amount of certificates an installation can receive. The maximum amount of certificates is calculated as the theoretical maximum of certificates an installation could receive when operating for 15 years on full load.

GSC can be sold either:

  • for a fixed minimum price of 93€/GSC to the distribution system operator; or
  • for a bilaterally negotiated price to one of the electricity suppliers.
Certificates for primary energy savings (WKC) - Warmte-krachtcertificaten (WKC)

While GSC are awarded to renewable fuels only, certificates for primary energy savings (WKC) are awarded to combined heat and power (CHP) units run on fossil fuels as well. In this scheme it is not the generation of energy that is subsidized, but the fuel (expressed in MWh) saved by using a CHP unit compared to the fuel that would have been necessary for the separate generation of the same amount of heat (e.g. boiler) or electricity (e.g. electric power station). Basically the efficiency of the CHP unit is being rewarded. The subsidy is based on the fuel that was saved due to that increased efficiency. 

Amount of WKC = actual fuel savings (or primary energy savings) x WKC-Bf

Overview of the final WKC-bandingfactors since January 2019

Input material Capacity (U) New CHP/ substanially renewed CHP Start date on or after
1.1.2020
Agricultural or industrial 10 kWe < U 5 MWe New CHP 1
Substanially renewed CHP 1
5 MWe < U 20 MWe New CHP 1
Substanially renewed CHP 1
Municipal food waste 10 kWe < U 5 MWe New CHP 1
Substanially renewed CHP 1
Landfill gas 10 kWe < U 5 MWe New CHP 1
Substanially renewed CHP 1

 

Certificates are awarded on a monthly basis for a period of 10 years. If the plant is substantially renovated, the subsidy can be awarded again. A CHP unit is substanially renovated when the old engine is replaced after 10 years by a new engine.

WKC can be sold either:

  • for a fixed minimum price of 31€/WKC to the distribution system operator; or
  • for a bilaterally negotiated price to one of the electricity suppliers.

Investment subsidies

VEA-Investment Subsidy

Biogas plants with so called micro-CHP units can apply for this investment subsidy since 2018. It has been created because the administrative burden was deemed too high compared to the amount of subsidies such small-scale projects received under the certificate system. In order to be subsidised under this scheme the CHP-unit needs to be ≤10 kWe.

The costs related to purchase and installation of the CHP unit and the digester are eligible, but limited to 4700 €/kWe. The share of the total costs that can be reimbursed by the subsidy, depends on the size of the enterprise. Only specific CHP-units are subsidised under this programme. The list of eligible technology is updated periodically.

Share of eligble costs in relation to the size of the enterprise

  % of eligible costs
Small-sized enterprises or applicants that are not an enterprise 65
Middle-sized enterprises 55
Large enterprises 45
Maximum in €/kWe 4.700
 
Call for Green Heat - Call groene warmte

The call takes place at least once a year and is an investment subsidy for:

  • green heat;
  • residual heat;
  • heat networks;
  • production of biomethane.

This means biogas is actually not subsidised by this scheme. However, the production form biomethane from biogas is. In 2020 the maximum amount available for biomethane projects was €250,000. Under this call SMEs receive more support than large enterprises as well (the same percentages apply as in previous table).

Applications are ranked according to cost-efficiency and anticipated CO2 reduction-efficiency (-CO2kg/€). The highest ranking application receives the amount it applied for. The remaining budget (in case there is any), is then awarded to the following rank and so on. Applicants must also state the minimum amount of biomethane they expect to produce which they will be held accountable for after the subsidy has been awarded.

The initially mentioned certificate system and the investment subsidy under the call for green heat can only be combined if the biomethane is utilized in a CHP unit. A mass balance needs to be conducted in order to guarantee that the biomethane is indeed being utilized by the designated CHP unit.

Subsidies from the Department of Agriculture and Fisheries

VLIF-Investment Subsidy

This subsidy is exclusively for farming. Investments for equipment that increase the environmental performance of farms is subsidised with 40%. Equipment with the main purpose to generate renewable energy is subsidised with 30%.

Under this scheme the anaerobic digester itself is not subsidised, but peripheral equipment such as pumps or storage tanks for the digestate, etc. are subsidised. This subsidy operates with a list of eligible technology which is updated every three months.

Subsidies for innovative projects in farming

Innovative projects that use technology that is not proven yet (and therefore not on the list of the list of eligible technology of the VLIF-investment subsidy) can apply for a 40% subsidy on the initial investment. The subsidy is capped with 200,000€.

Subsidies from the Public Waste Agency of Flanders (OVAM)

Subsidies for local authorities

Local authorities can also receive 20% on their net investment (with an annual maximum of 1.5 million €) for anaerobic digestion plants for organic waste from the Public Waste Agency of Flanders (OVAM).

Support from the Federal Public Service Finance

Investment deductions are available on profit made from investments on energy-saving measures. Depending on the specific circumstances the tax cuts can range from 3.5% to 20.5%. The aim is to increase efficiency on existing plants and to promote the use of renewable energy sources in general. This can be combined with all the afore mentioned subsidies.

As finance is a federal competence, this is the only support mentioned in the presented overview that applies to the Brussels-Capital Region and the Walloon Region as well.

Biogas-E is happy to answer any further questions and provide additional information upon request (info@biogas-e.be).

picture: ©Jan Nijman (pixabay)

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