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Regulations and policy instruments for introducing biogas

Nelson RojasProject Manager

Tartu, 23rd March 2011

Agenda

• About HOG Energi• Introducing biogas in Hordaland and Bergen• Policy and instruments study - Baltic Biogasbus

project• How can politics make biogas a viable fuel

alternativ?• The policy landscape• 6 areas of policy action • Conclusions

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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 facility at Kollsnes– Pipeline from Kollsnes plant to Mongstad raffineri

www.balticbiogasbus.eu 3

www.balticbiogasbus.eu 4

A successful natural gas story!

The next chapter in Bergen…

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Biogas

Some quick facts about our region

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Quick facts Bergen city:•Norway’s second largest city•Aprox. population 253 000•Aprox. 500 buses•81 on methane

Quick facts Hordaland county:•Norway’s third largest county (19 counties)•Aprox. population 470 000 •33 municipalities•Aprox. 800 buses

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

• 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

Policy and instruments study in Baltic Biogasbus project

• Secure the creation of a sustainable biogas system• Stimulate establishment of necesary infrastructure• Correct market imperfections to make biogas competitive

How can politics make biogas a viable fuel alternativ?

It sounds easy but it is a complex landscape …

Innovation &

new enterprise

R&D

Climate & environment

Capital

Technology

Waste Management

Agriculture &

forestry

Road &

transport

Related industries

EnergyCompetition

InternationalNational

Regional Local

Policy Level

Policy Dimension

Policy Target

The policy landscape

We identified 6 areas of action

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• The most important decisions at a national level are:– Set up a renewables strategy equiped with clear targets for biogas,

backed up by a porfolio of incentives to regional and municipal authorities and to the private sector. The portfolio of incentives should include programs, grants, investment funds and taxation/prising mechanisms.

• The incentives are ment to back up the following directives: – Regions/Municipalities are obliged to have a waste management

system that ensures the collection and availability of sources of biogas

– Regions/Municipalities are obliged to secure biogas production– Regions/Municipalities are oblige to secure a biogasbus fleet

1: Key Strategic political decisions (1)

• Secure collection, production and the purchasing of buses. In other words ensure the establishement of 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)

1: Key Strategic political decisions (2)

Municipal companyGas company

Transportation Company

Collection

Biogas Production Upgrade

Transport

Filling Vehicle

IDEAL ORGANIZATIONAL STRUCTURE FOR BIOGAS AS FUEL

• 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

2: Programs

• Infrastructure financing• Financial support for production/price guarantees• Bus financing (renewing bus fleet)

3: Grants

• CO2 emissions tax on diesel• CO2 emissions tax exemption on natural gas (only

for transport purposes) and biogas• CO2 emissions 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

4: Taxes

• 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

5: Investment Fund

• Natural gas as a back up• Create synergies between biogas implementation

and existing natural gas infrastructure• Use natural gas as a transitional alternative until

biogas is available• Stop purchasing of diesel buses

6: Diesel Bus phase out plan!

• Regulations and instruments have to be directed towards:• Securing the creation of a sustainable biogas system• Stimulating the establishment of necesary infrastructure• Correcting market imperfections to make biogas

competitive• Regional and municipal authorities have to become the

driving force behind implementation to secure creation of a biogas system

• National authorities have to back up regional and municipal efforts through programs, grants, investment, taxation of diesel and a total strategy to stimulate establishment of infrastructure and correcting market imperfections

• Diesel phase out plan

Conclusions

Thank you for your attention!

Contact:Nelson Rojas HOG EnergiTel: +47 97 76 45 46Email: nelson@holga.noWebsite: www.holga.no