Support schemes for biogas and biomethane in Flanders

The Flemish Energy and Climate Agency currently gives two types 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 and Climate Agency. Subsequently they receive certificates on a monthly basis. The amount of certificates depends on the so called bandingfactor. The bandingfactor is awarded on plant basis for both green electricity and primary energy savings. They remain the same throughout the period the plant receives certificates.

The bandingfactors for new installations are calculated annually by the Flemish Energy and Climate 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.

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

Since 2013 producers of electricity from biogas receive GSC based on the net produced renewable electricity (E_GSC), 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 = E_GSC x Bf

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

E_GSC = G*(E_bruto – E_anc) – E_pre – E_trp

E_bruto: the total electricity production

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

E_pre: energy required for the pretreatment of the feedstock

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

Overview of the final GSC-bandingfactors.

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 onwards. 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.

New biogas installations, starting from 2021, will not receive GSC for the electricity produced during periods when the day-ahead prices on the Belgian spot market are negative for at least six consecutive hours. With this measure the Flemish government wants to stimulate the flexible production of electricity. Coming regulation may tighten this further to any installation receiving operational support and for every quarter of negative prices.

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 (in the past also those who run on fossil fuels). 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.

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 substantially renovated when the old engine is replaced after 10 years by a new engine.

New biogas installations, starting from 2021, will not receive WKC during the periods that the day-ahead prices on the Belgian spot market are negative for at least six consecutive hours. With this measure the Flemish government wants to stimulate the flexible production of electricity. Coming regulation may tighten this further to any installation receiving operational support and for every quarter of negative prices.

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.

VEKA-investment subsidy micro-CHP

Biogas plants with so called micro-CHP units can apply for this investment subsidy since 2018. It has been created because the administrative burden 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 electrical capacity of the CHP-unit needs to be ≤ 10 kWe.

The costs related to the purchase and installation of the CHP unit and the digester are eligible, but limited to €4,700/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 technologies is updated periodically. This subsidy will be evaluated and possibly abolished due to insufficient applications. 

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

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.

Companies investing in the production of green heat with biogas (minimal thermal input or extension from 300 kW_th up to 1 MW_th), can apply for an investement subsidy if the project is not eligble for the certificate system. The maximum amount per green heat project is €1,000,000. 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. At least one project, or if multiple projects applied, 10% of the lowest scoring projects are eliminated from the granting process. 

VLIF-investment subsidy

Subsidies for productive investments

This subsidy comes from the common agricultural policy (CAP) and is exclusively for farming. The farm has to comply with the definition of active farmer and must have a standard earning capacity of at least €20,000. Under the scheme 'VLIF-support for productive investments' specific equipment related to anaerobic digestion is subsidised such as peripheral equipment like pumps or storage tanks for the digestate, etc. The support can amount up to 40% of the investment in this part, depending on the sustainabillity.  

A 10% increase is possible when it concerns a 'young farmer' that is requesting the support. Moreover, a further increase by 5% is possible when a combination of investments is made ('claim pocketvergisting'). The latter is not granted automatically, application is necessary. A separate budget is foreseen for specific ammonia reducing investments. The percentage of support can amount up to 80%.

Subsidies for investment in replacement

Real estate investments, such as for example certain peripheral infrastructure for farm-scale digesters, could be replaced with support through VLIF if the replacement occurred at least 10 years after the invoice date of the original investment. Since the new CAP period, this rule does not longer apply. Support is now available for a replacement, regardless of when the previous investment was made. However, any initial support will be reclaimed proportionally if a subsidized investment is replaced within 5 years of the payment of the support. Furthermore, the VLIF conditions must still be met to be eligible for such support.

Subsidies for innovative projects in farming

Innovative projects that use technology that is not proven yet (and are therefore not on the list of eligible technology of the VLIF-investment subsidy) can apply for a 50%-80% subsidy on the initial investment. 

In general, VLIF-support can not be combined with increased investment deduction.

Local authorities can receive 20% on their net infrastructure and equipment investment (with a maximum of €1.5 million) for anaerobic digestion plants treating seperately collected municipal organic waste (GFT) from the Public Waste Agency of Flanders (OVAM).

Investment deductions are available on taxable profit made from investments on energy-saving measures. From 1 January 2025, the increased investment deduction is reformed with fixed percentages and simplified rules. A basic deduction of 10% applies to small enterprises, while thematic investments, such as in energy efficiency and renewable energy, will be eligible for an increased deduction of 40%. The exact investments are laid down in Royal Decrees, but the interpretation of these lists is not yet published. It is therefore unclear for now which components of biogas plants, such as fermentation reactors or heat exchangers, are eligible. As this is a tax benefit it can be combined with all the aforementioned 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.

Ecologiepremie +

The Flemish government awards companies who invest in climate-friendly technologies. Biogas produced from biomass or waste water is included on the limitative technology list which entitles to an investement support. The biogas has to be used for the production of process heat and not for the production of electricity. Only installed capacities of less than 1 MW biogas are elegible. SMEs receive up to 55% of the invesment, large companies a maximum of 45%.