Biomethane in Sweden: Governmental Incentives and Market Trends CNG and Biomethane manager Global Biomethane Congress 2012
Outline The Swedish context Figures and market trends Political instruments and policies Biomethane prices Future trends 2012-10-09 2
Swedish Gas Association A member-funded organization dedicated to promote a greater use of energy gases in Sweden Safety and technology Information and public opinion 2012-10-09 3
The Swedish context Total final consumption (392 TWh) District heating 13% Electricity 32% Oil products 29% Transport Industry Biofuels, peat, waste etc. 19% Natural gas and LPG 3% Coal and coke 4% Residential, services etc. 2012-10-09 4
The Swedish context 13-15 TWh of natural gas Eurogas 2012-10-09 5
Biogas production: 1,5 TWh Wastewater treatment is the largest source Wastewater treatment plants Co-digestion plants Small-scale on-farm plants Industrial plants Landfills TREND: Landfill biogas decreases co-digestion, on-farm and industrial plants increase 2012-10-09 6
Biogas utilization pathways BIOGAS PRODUCTION FLARING HEAT SMALL-SCALE POWER/CHP UPGRADING VEHICLE GAS LARGE-SCALE POWER/CHP GAS GRID INJECTION 2012-10-09 7
Market trends - utilization of biogas: 50% vehicle gas, 38% heat TREND: Vehicle gas use increases rapidly heat, power and flaring decrease 2012-10-09 8
Market trends - vehicle gas: 60 % biogas, 40 % natural gas (1,2 TWh) Natural gas Biogas Total sales of vehicle gas 2012-10-09 9
g CO 2 /MJ fuel Why biogas in transport? Up to 90 % reduction in CO 2 emissions 100 80 60 79 76 76 63 40 20 0 28 28 17 4 Biogas and natural gas: 80-90 % reduction in NO X and PM emissions 2012-10-09 10
Biomethane/CNG filling-stations in Sweden 136 public stations, September 2012 2012-10-09 11
Market trends - gas vehicles Rapid growth in the last ten years mainly company cars 37 000 1 500 550 2012-10-09 12
Incentives to promote gasvehicles and other clean cars 40 % reduction of income tax for use of company gas-vehicles 1100 EUR clean car subsidy Five year exemption from vehicle tax for clean cars (on average 660 EUR in total) Free parking benefits in many cities Stockholm congestion tax exemption 2004 2006 2008 2010 2012 2014 2003 2005 2007 2009 2011 2013 Stockholm Airport: High priority queue for clean taxis Ordinance of government purchase and leasing of clean vehicles (100 % clean vehicles as of February 2009) 2012-10-09 13
National grants Investment support for biogas Climate investment programmes (KLIMP) Biogas technology development grant Investment support for farm-based biogas 2004 2006 2008 2010 2012 2014 2003 2005 2007 2009 2011 2013 Gas stations grant 2012-10-09 14
EUR/MWh No tax on renewable fuels A strong incentive for biogas Biogas has a competitive tax advantage equivalent to about: - 68 EUR/MWh compared to petrol - 52 EUR/MWh compared to diesel - 16 EUR/MWh compared to natural gas 80 60 40 20 0 2009 2010 2011 2012 2013 2015 No energy tax on natural gas Petrol Diesel Natural gas has a competitive tax advantage equivalent to about: - 52 EUR/MWh compared to petrol - 36 EUR/MWh compared to diesel Full tax exemption until end of 2013 2012-10-09 15
New legislation helps distribution - The green-gas concept Biomethane Households Industry Natural gas Vehicles New tax legislation from 2011 makes it possible to use the green gas concept across different local grids. Allows consumer to order 100 % biogas and the tax exemption can follow. 2012-10-09 16
Vehicle gas price development Petrol Diesel Vehicle Gas Source: Statistics Sweden and FordonsGas Sverige The biomethane price is influenced by the oil price as the fuels are exchangeable on the same market. 2012-10-09 17
SEK/kWh Biomethane prices - competing with diesel 2,0 add. cost add. cost VAT VAT VAT add. cost 1,0 VAT CO 2 tax energy tax DIESEL at pump VAT distribution and station BIOGAS production upgrading CO 2 tax energy tax DIESEL at pump distribution and station BIOGAS production upgrading CO 2 tax energy tax DIESEL at pump VAT distribution and station BIOGAS production upgrading 2010 2011-2012 2011-2012 2012-10-09 18
What is the additional costs for the customer in Sweden? Gas-car och diesel-car differ in energy-efficiency and price In this example the diesel-vehicle is almost 50 % more effective than the gasvehicle Gasvehicle Dieselvehicle Example: Volkswagen Passat TSI 150 EcoFuel Masters (gas) vs. TDI 140 BlueMotion Technology (diesel) How much energy is needed to drive 100 km? 66,8 kwh/100 km 45 kwh/100 km Aditional cost for a gas-vehicle: 3 cents/km A new car is owned during 7 years The car in driven 15 000 km per year The exemption from vehicle-tax during 5 years for both cars. Therafter a yearly approx 90 Euro higher tax for the diesel-vehicle than the gasvehicle. The purchase price is approx 3500 Euro higher for the gas-vehicle 2012-10-09 19
Future trends Growing market for liquified biomethane and natural gas: Substituting diesel in heavy duty vehicles (Volvo and Scania) Substituting oil in ships Lowering distribution-costs when fueling passenger cars The first passenger ferry in Sweden will be in traffic in January 2013. (Viking Line) 2012-10-09 20
The liquified biogas plant in Lidköping - Inauguration next week! The film: http://www.youtube.com/watch?v=hiaee8x41pm&feature=youtube_gdata 2012-10-09 21
Thank you! Swedish Gas Association Michelle Ekman Swedish Gas Association Box 49134 SE-100 29 Stockholm +46 70 685 4403 michelle.ekman@energigas.se