Technical and socio-economic analysis of supply chains for the production of biomethane

The Ministerial Decree on Biomethane (15 September 2022), approved by the Italian government, promotes advanced biomethane production, supported by 1,73 billion euros from the PNRR. The goal is to reach 2,3 bcm/year by 2026, aligning with Italy’s PNIEC strategy. The 2023 PNIEC revision targets 5,7 bcm/year by 2030, aiding the phase-out of Russian gas, transport decarbonization, and waste valorization. The study estimates the maximum availability of biomethane feedstocks in Italy (2022), considering the lack of a national tracking system. Various data sources are used to assess theoretical biomethane potential based on biochemical methane potential coefficients, estimating a value equal to 5.654.043.573 cm/year. The analysis also considers the current uses of feedstocks, highlighting that not all residues can be allocated to energy production. An evaluation of the actual biomethane production is conducted (250.149.000 cm/year) and biogas produced at the national level (4.357.833.333 cm/year) allows to estimate the extractable biomethane potential from biogas plants via upgrading technologies (2.614.700.000 cm/year). Italy, having one of Europe’s largest biogas sectors, expects significant biogas-to-biomethane conversions under the Biomethane Decree. The remaining untapped potential, equal to 2.789.194.573 cm/year, could be leveraged through new plant construction. The study also quantifies biomethane-related emissions, associating emission factors with different feedstocks. A well-to-tank analysis accounts for all greenhouse gas emissions from feedstock supply to biomethane distribution, enabling a comparison with fossil natural gas. Technology improvements further enhance biomethane’s environmental competitiveness. Three scenarios for biomethane development until 2040 are presented: 1.??Reference scenario (2022 production levels) 2.??Scenario with the impact of the Biomethane Decree 3.??Full exploitation of theoretical potential (aligned with the 5,7 bcm PNIEC target) Each scenario considers Italy’s gas demand forecasts and the resulting biomethane-related emissions. Special focus is given to social costs of avoided emissions, using Social Cost of Carbon (SCC) analysis to quantify climate change mitigation benefits. Comparing the results obtained through the implementation of these three scenarios, the percentage of emissions reduction varies between – 4,36% and -11,8% if the reference scenario is contrasted with respectively the second and third scenario. With regard to social costs, the difference in monetary value between the case where overall gas demand is met solely with natural gas and the three scenarios leads to a range of cumulative results to 2040 which varies between $2.846M of the reference scenario and $91.033M of the third scenario, with the second scenario at $43.764M. A discount rate of 3% has been applied, however these values were calculated also for discount rates equal to 2,5 and 5%.