The Agreement on cooperation for the development of the biogas and biomethane sector is signed

The Minister of Climate and Environment, Anna Moskwa, and representatives of the government administration and stakeholders of the biogas and biomethane sector signed the "Agreement on cooperation for the development of the biogas and biomethane sector" in Warsaw on 23 November 2021. The document is the result of a process begun with the letter of intent of 13 October 2020 and is meant to become a platform for cooperation between the government, investors, science and financial institutions.

Who signed

On the government side the document was signed by the ministers of climate and environment and of funds and regional policy, secretaries of state in the ministries of agriculture, climate and education, and two government plenipotentiaries: for renewable energy sources (Ireneusz Zyska) and for the reform of research institutes. They were joined by investors, supply chain companies, business organisations, banks and insurers, and the scientific community. Any other interested party can join the agreement by sending a written declaration to the Minister of Climate and Environment.

Aims of the agreement

The parties set out five aims: to strengthen the role of biogas and biomethane in the economy, to create a biomethane market and promote its use, to increase the share of Polish companies and technologies in building and operating installations (so-called local content), to multiply national benefits – economic, environmental, technological, energy-related and social – and to support the diversification of energy sources, the delivery of EU climate goals and recovery after the pandemic.

The agreement set up seven working groups. It contains no quantitative targets, such as biomethane volumes or installed capacities. The only ambition of a general nature is to produce in the future such a quantity of green gas as will cover a significant part of the demand for natural gas.

Changes in the law

Legislative work was announced in the Ministry of Climate and Environment on amending the Act on Renewable Energy Sources and the Act on biocomponents and liquid biofuels. They are to create stable incentives for investors building installations that produce and clean biogas and produce biomethane, and also to make it easier to expand or rebuild gas grids so that biomethane can be injected. No deadlines were given.

Significance for the market

For the industry the agreement confirms political support, but the document itself creates neither a support system nor obligations. Its value depends on whether the working groups prepare proposals for regulations and whether these are taken into account in the legislative process. For investors the local content provision is a signal that the government intends to support Polish technology suppliers.

What next

The next steps are the work of the working groups and the drafting of amendments to the acts. For biogas producers, the key question is whether the new rules will be adopted in time to allow investment planning.

Context

The agreement is the result of thirteen months of talks since the October letter of intent. During that time Orlen and PGNiG announced plans to build a network of biomethane plants, the Polish Power Exchange (TGE) and PGNiG concluded an agreement on the market, and the Sejm passed an amendment to the Act on Renewable Energy Sources extending the support systems for biogas.