The Polish government has adopted a bill amending the Renewable Energy Sources Act that is expected to facilitate the development of biogas and biomethane projects. This draft legislation, which was sent to the lower chamber of the Polish Parliament (Sejm) for legislative work on 8 May, represents another initiative (further to the draft Biogas Act described at CMS Law-Now a few weeks ago) aimed at boosting the biogas and biomethane market in Poland. The key changes to be introduced are presented below.
Definition of biomethane
The bill introduces a definition of biomethane, meaning “gas derived from biogas, agricultural biogas and renewable hydrogen, purified, fed into gas grid or transported in compressed or liquefied form by means of transport other than the gas grid or used to fuel motor vehicles”. In addition, in order to be fed into the distribution or transmission gas grids, the biomethane must meet the quality requirements set out in the regulations issued under the Energy Law Act.
Clarifying the definition of agricultural biogas
The bill clarifies the definition of agricultural biogas due to the fact that doubts have arisen over the interpretation of the possibility of using food-processing waste to produce agricultural biogas. In the Supreme Administrative Court’s opinion, food-processing waste has been excluded from the list of raw materials that can be used to produce agricultural biogas. The current bill explicitly includes food-processing waste among the materials from which agricultural biogas can be produced.
Defining the rules for biomethane production
The bill sets out the provisions on the rules and conditions of the production of biogas generated to produce biomethane or the business activity of producing biomethane from biogas, and:
- the production of biogas or the production of biomethane from biogas will be a regulated activity subject to registration in an open register of biogas producers kept by the President of the Polish Energy Regulatory Office (ERO), upon an application submitted by the producer; and
- the production of biomethane from agricultural biogas will be a regulated activity subject to registration in an open register of agricultural biogas producers kept by the Director General of the National Centre for Agricultural Support (Polish Agricultural Authority).
The bill also sets out detailed data to be included in the applications and other issues relating to the operation of the registers.
Introduction of a biomethane operational support system
Currently in Poland, the support available for biomethane production is limited because only installations producing agricultural biogas and the feeding of this biogas into the gas distribution grid are subsidised. The bill is about to change this by providing for the support of all kinds of biomethane (including gas derived from biogas, agricultural biogas and renewable hydrogen) fed into the gas grid.
The bill introduces a whole new chapter that sets out the detailed requirements for the support mechanism for producing biomethane in renewable energy source installations with the installed capacity of a renewable energy source to produce biomethane of up to 1 MW. The support will be based on a feed-in-premium scheme (contract for difference or CfD), under which biomethane producers are free to sell biomethane on the market but have the right to settle the negative balance resulting from the difference between the market price and the reference price. To this end, the bill defines the installed capacity of a renewable energy source to produce biomethane meaning the total nameplate capacity expressed in MW of energy contained in biomethane, as well as a reference price for biomethane used to calculate the negative balance for the producer.
The support will be available for up to 20 years from starting the first sale of biomethane from an installation.
The introduction of a feed-in-premium mechanism is one of the most popular solutions currently in operation in those EU member states that have set their sights on biomethane development. According to the bill, this was the preferred approach of market participants. It is expected that the adoption of the support system solutions will contribute to the dynamic development of the biogas and biomethane sector in the coming years.
For more information on legislative developments and opportunities in the Polish energy sector, contact your CMS client partner or local CMS experts.