Italian Biomethane Towards 5.7 Billion Cubic Meters. Incentives and Sixth Auction Coming Soon

GSE announces a new round of incentives to support biomethane production in Italy after the PNRR, with the goal of reaching 5.7 billion cubic meters per year by 2030. A sixth auction is also coming, as well as a plan to promote the use of renewable gas in hard-to-abate industrial sectors.

A new round of incentives for biomethane production in Italy could be announced by the end of 2025. This was stated by Paolo Arrigoni, president of GSE (Energy Services Manager), who confirms a possible joint intervention with the Ministry of the Environment and Energy Security (MASE). After having achieved the intermediate objective set by the PNRR for 2026, the priority now is to hit the 2030 target set by the PNIEC (National Integrated Energy and Climate Plan) , which estimates an annual production capacity of 5.7 billion cubic meters of biomethane .

The Biomethane Outlook 2024 , produced by the Energy & Strategy Department of the Politecnico di Milano, highlights several critical issues in the development path of the sector. To date, only four of the five planned auctions have been completed, and the assigned production capacity was significantly lower than the available quota.

In particular, the fifth auction financed with PNRR funds allowed the assignment of 95% of the expected quota, but the exhaustion of the 1.7 billion euro budget allowed capital financing of only 148 of the 298 admitted projects . It follows that the overall production threshold, equal to 122,842 cubic meters per hour , is still distant.

The experts at the Polytechnic are raising a clear alarm: without new economic support measures and a solid, long-term development plan, many plants risk being shut down once they reach their operational limit of around 15 years.

The new support scheme should come into force at the end of the PNRR, scheduled for June 2026, and aims to ensure continuity of investments in the production of renewable gas from organic waste and biomass . MASE has already confirmed its intention to develop an incentive mechanism based on contracts for difference and operating tariffs , with the aim of progressively assigning 2.7 billion additional cubic meters per year . The quota is expected to be divided into four or five annual tenders of 400–500 million cubic meters each.

A further innovative element of the plan concerns industrial demand. The GSE is in fact working on a competitive procedure dedicated to the purchase of biomethane by hard to abate sectors , that is, those industrial sectors that are particularly difficult to decarbonize. The so-called “biomethane release” should facilitate the medium-long term energy planning of energy-intensive companies, supporting the transition to renewable sources also on the demand side.

In parallel, MASE has started a discussion with the European Commission to obtain new resources through the remodeling of the PNRR . The outcome of this negotiation will be crucial: without new funds for capital contributions, many projects risk not being fundable and could be withdrawn from the rankings.

In the event of a positive outcome, the GSE is ready to launch a sixth auction to assign the residual quota, estimated at around 100 million cubic meters per year . However, time is running out: all interventions must be completed by 30 June 2026 , the official closing date of the PNRR. For this reason, it is essential that political and operational decisions arrive quickly, so as not to jeopardize the strategic contribution of biomethane to the national energy transition .