Italy: first FER 2 call for biogas plants and biomass opens — 10 MW and a tariff of 233 EUR/MWh

GSE, the Italian support-scheme operator, opened on 16 December 2024 the first public call under the FER 2 decree (ministerial decree of 19 June 2024) for group A installations fuelled by biogas and biomass. The quota of the first call is 10 MW, and applications will be accepted until 14 February 2025. For small biogas plants, the decree provides an all-inclusive tariff of 233 EUR/MWh for 20 years. The decree had been awaited since the end of 2016, when the previous one expired.

What the FER 2 decree regulates

The decree remains in force until 31 December 2028 and provides for at least one call per year. The 150 MW quota is shared by biogas and biomass. Biogas plants may have a capacity of up to 300 kW electrical. According to Consorzio Italiano Biogas (CIB), the previous decree, of 23 June 2016, ceased to have effect on 31 December 2016, so the industry waited almost eight years for its successor.

Tariff

The all-inclusive tariff for biogas is 233 EUR/MWh for 20 years. For biomass up to 300 kW, 246 EUR/MWh is provided for 2024/2025 (according to IEA Bioenergy). Base tariffs are reduced by 3% a year, but small plants (up to 300 kW) are exempt from the minimum 2% reduction bid and from the 3% reduction in 2025; they begin to feel it only from 2026 (according to CIB). The decree assumes periodic updates of the tariffs on the basis of GSE monitoring, so as to prevent a lack of profitability or excessive compensation.

Requirements

Biogas installations must meet environmental and efficiency requirements:

• a digestate storage tank with biogas recovery with a capacity corresponding to at least 30 days of production;
• recovery and on-site use of heat from the process;
• at least 80% of the feedstock from by-products listed in Table 1 part A of the decree, with the remainder from part B;
• at least 51% of products and by-products from the plant's own farm production cycle;
• no works started before the ranking list is published, and commissioning within 31 months of its publication.

The tariff can be combined with other forms of support, but percentage deductions then apply, which according to CIB have so far discouraged companies.

Significance

According to CIB, the decree finances energy from innovative sources or those with higher feedstock supply costs, which in practice means biomass. For a comparison with the Polish market, see the 2023 RES reference prices, and for the Italian biomethane path, the biomethane decree 340/2022.