Regulations and policy instruments for introducing biogas

1. Regulations and policy instruments for introducing biogas Nelson Rojas Project Manager Tartu, 23rd March 2011

2. Agenda • About HOG Energi • Introducing biogas in Hordaland and Bergen • Policy and instruments study - Baltic Biogasbusproject • How can politics make biogas a viable fuel alternativ? • The policy landscape • 6 areas of policy action • Conclusions www.balticbiogasbus.eu

3. About HOG Energi • Interest organization that seeks to improve terms and conditions for developing and growing business across all energy sectors in the Hordaland region • HOG Energi have achieved significant results with many important issues regarding methane for the region such as: • Development of infrastructure for natural gas • Increased use of natural gas in public transport • Gas buses in Bergen • Gas ferries • Natural gas in vessels • LNG facilityat Kollsnes • Pipeline from Kollsnes plant to Mongstad raffineri www.balticbiogasbus.eu

4. A successful natural gas story! www.balticbiogasbus.eu

5. Biogas The next chapter in Bergen… www.balticbiogasbus.eu

6. Some quick facts about our region • Quick facts Hordaland county: • Norway’s third largest county (19 counties) • Aprox. population 470 000 • 33 municipalities • Aprox. 800 buses • Quick facts Bergen city: • Norway’s second largest city • Aprox. population 253 000 • Aprox. 500 buses • 81 on methane www.balticbiogasbus.eu

7. Introducing biogas in Hordaland and Bergen Decision from Hordaland County Council: • 75 new gas buses to be purchased in Bergen • Climate Plan for Hordaland county states that use of biogas and other renewable energy sources will be increased towards 2020. Biogas will be a priority in public transportation Decision from Bergen City Council: • Produced biogas from Rådalen production facility shall be used in the public transport sector • Rådalen production plant will be operative from 2014

8. Policy and instruments study in Baltic Biogasbus project • Three different reports on the works: • Biogas as fuel • Framework for participating in decision-making • Comparative analysis of policies • What have we done?: • We have reviewed different countries’s practices • We have analyzed which practices have worked • We identified 6 areas of action

9. How can politics make biogas a viable fuel alternativ? • Secure the creation of a sustainable biogas system • Stimulate establishment of necesary infrastructure • Correct market imperfections to make biogas competitive It sounds easy but it is a complex landscape …

10. Policy Level The policy landscape Policy Dimension National International R&D Capital Policy Target Waste Management Climate & environment Road & transport Innovation & new enterprise Agriculture & forestry Technology Energy Competition Regional Local Related industries

11. We identified 6 areas of action www.balticbiogasbus.eu

12. 1: Key Strategic political decisions (1) • The most importantdecisions at a national levelare: • Set up a renewablesstrategyequipedwith clear targets for biogas, backed up by a porfolioofincentives to regional and municipalauthorities and to the private sector. The portfolioofincentivesshouldinclude programs, grants, investment funds and taxation/prising mechanisms. • The incentivesare ment to back up thefollowingdirectives: • Regions/Municipalitiesareobliged to have a waste management system thatensuresthecollection and availabilityofsourcesof biogas • Regions/Municipalitiesareobliged to secure biogas production • Regions/Municipalitiesareoblige to secure a biogasbus fleet

13. 1: Key Strategic political decisions (2) • Securecollection, production and the purchasing of buses. In other words ensure the establishementof a biogas system: • All produced biogas will be used on buses (or set a target number/percentage) • All new buses to be purchased from 2012 will run on biogas or other renewable energy source (or set a target number/percentage)

15. 2: Programs • Innovation programs for promoting new enterprise • Innovation programs directed to SMEs • R&D in all different aspects of biogas • Technology cooperation programs between private sector & R&D

16. 3: Grants • Infrastructure financing • Financial support for production/price guarantees • Bus financing(renewing bus fleet)

17. 4: Taxes • CO2emissions tax on diesel • CO2emissions tax exemption on natural gas (only for transport purposes) and biogas • CO2emissions tax on natural gas and biogas for heat and electricity • Road tax exemption on natural gas (only for transport purposes) and biogas • NOx emissions tax on diesel • NOx emissions tax exemption on natural gas (only for transport purposes) and biogas

18. 5: Investment Fund • Secure investments in technology driven firms (SMEs) that have innovative technologies that can reduce CO2 emissions • Secure investment in infrastrunture companies • Secure capital through attracting co-investments to investments

19. 6: Diesel Bus phase out plan! • Natural gas as a back up • Createsynergiesbetween biogas implementation and existing natural gas infrastructure • Use natural gas as a transitional alternative until biogas is available • Stop purchasingof diesel buses

20. Conclusions • Regulations and instruments have to be directedtowards: • Securingthecreationof a sustainable biogas system • Stimulatingthe establishment ofnecesaryinfrastructure • Correcting market imperfections to make biogas competitive • Regional and municipalauthorities have to becomethe driving force behindimplementation to securecreationof a biogas system • National authorities have to back up regional and municipaleffortsthrough programs, grants, investment, taxationof diesel and a total strategy to stimulate establishment ofinfrastructure and correcting market imperfections • Diesel phaseout plan

21. Thank you for your attention! Contact: Nelson Rojas HOG Energi Tel: +47 97 76 45 46 Email: nelson@holga.no Website: www.holga.no