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Italy passes biomethane, large gas user decrees

Staff Writer |
Italy's Economic Development Ministry (MISE) signed two new energy decrees Friday, just prior to national elections which have returned no clear winner to date.

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The decree includes measures to aid large gas consumers and incentives for biomethane in transport for Eur4.7 billion ($5.8 billion), following EU clearance of the measures the previous day, the ministry said Friday evening, Platts reported.

Besides those two subjects, MISE also said it has officially sought State Council approval on a decree to establish a list of secure energy suppliers and started the process for new renewable incentives and a shake-up of the energy efficiency "White Certificates" market, it said.

The new decree will mean a review of the current system of costs paid by large industrial consumers of natural gas, with the aim of creating an incentive scheme similar to that planned for large energy users and financing carbon reduction measures, MISE said.

Italian industrial gas consumers used 14.3 TWh, or around 19% of national gas demand in 2017, according to data from grid operator Snam.

The definition of "large gas consumer" will be aligned to EU State Aid guidelines while the Ministry will draw up new criteria regarding the stacking up of incentives for the large consumers, particularly those that are also large electricity consumers.

The decree will also extend to companies that consume natural gas as a raw material, such as chemical and fertilizer companies, with demand greater than an established level, and will allow them to be exempted from certain tariff components related to carbon reduction, MISE said.

The decree regarding biomethane follows EU approval last week of proposals first made in 2016 for investment of Eur4.7 billion in incentives to push up the country's use of biofuels in road transport.

Italy's objective is 10% of renewbales in the sector, and a secondary target for second generation biofuels of a 0.9% share by 2020 and a 1.5% share by 2022.

The incentives would be financed solely by charging operators in the road fuels sector, MISE said.

There would also be a move towards domestically produced biomethane to substitute imported biodiesel where possible, MISE said.

In the renewable sector, the decree will pave the way for a potential new capacity of 6 GW, with a potential output of 11 TWh per year which could be awarded between 2018 and 2020, MISE said.

The decree would cover onshore wind, solar PV, hydro, traditional geothermal and landfill and sewage gas, MISE said, noting these are the most competitive technologies.

Access to incentive would be principally through competitive procedures based on economic criteria, with the aim of reducing the impact on consumer bills and ensuring competitive pricing of components, while environmental and regional impact would also be considered during project approval.

The proposals are being put forward to the Environment Ministry and would then be submitted to the regions, the regulator and the European Commission before any measures would come into force.

Among the other measures in the decree, MISE said it intends to to modify the white certificates energy efficiency market amid an ongoing price rally.

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