Factors which are limiting the utilization of biomethane in the

overcome these barriers

From an economic point of view, the most problematic operators are the feedstock producers, especially agricultural biomass producers. If feedstock utilization is more expensive than the biogas plant gate-fees, biogas production is an attractive option. It seems that for waste feedstock, such as biowaste, WWTP sludge and for some agricultural wastes, biogas production may be an attractive option. However, if the traditional utilization options for example of manure are cheaper, it is hard to get manure into a biogas plant. There might be some subsidies which are affecting strongly other manure utilizations, and therefore, manure is not directed to the biogas process.

For straw, other utilization options such as ploughing into ground are very cost efficient.

5.1 Synthesis 133 From cultivated biomass the producers are expecting to get price instead of paying gate-fees. This limits strongly the use of dedicated energy crops in biogas production.

For a biogas producer, gate-fees should be high enough to make biogas plants feasible.

According to the results, biomethane production is unfeasible if the biomethane producer has to pay for the feedstock. This may confine the utilization of cultivated feedstock very strongly. On the other hand, large scale biogas production would need feedstock from agriculture, especially dedicated energy crops. According to the results, the biomethane potential in case Finland is approximately 10 TWh a^–1. The majority of the potential is in agricultural biomasses, but especially in populated areas, biowaste and WWTP sludge have also importance. From technological perspective in some cases, the operation of digester could be a problem. For example straws are relatively dry material, and therefore, they have to be digested with a wetter feedstock. Manure could be a good option for co-digestion with straw. On the other hand, in some regions, the straw potential might be higher than the manure potential, which may cause problems. There are several different kinds of previous potential studies for different regions in Finland. The results between different studies vary at a relatively high level due to different assumptions. Pöyry Energy has estimated that the maximum biogas potential for Finland would be 6.6 TWha^–1, which is less than the 10 TWh a^–1 calculated in this study (Ministry of Employment and the Economy, 2009). Even higher potentials have been estimated. For example according to Rasi et al. (2012), the theoretical biomethane potential in Southeast Finland and Southwest Finland regions was approximately 0.5 TWh a^–1 more than the potentials studied in this dissertation. The difference is mainly due to grass biomethane potential estimations. A biomethane potential study by Kahiluoto & Kuisma (2010) estimated a similar biomethane potential for the Satakunta region, but their estimation for Southern Savonia region was a little lower. (Kahiluoto & Kuisma, 2010)

For a distributor, the investment on the distribution network seems to be a key issue. If long pipelines have to be built, the feasibilities decrease quite rapidly. Therefore, the existing gas grids seem to have an important role in the wider scale utilization of biomethane. Technological challenges can be related to distribution and gas-operated vehicle technology. In the studied case in Southern Finland, the refuelling station network could support higher biomethane utilization, but in other parts of Finland, the distribution network limits the growth of biomethane utilization. However, if the biogas production and utilization are on a high enough level, biomethane grids can be built as has been done in Sweden (IEA 2010). In these cases, the additional gas may have to be transported from the NG grid as the backup gas. Backup gas is needed to ensure the gas delivery in cases when there are problems in the biomethane production. (Torri, 2012) For consumers or vehicle owners biomethane is a cheaper option than petrol at least when the annual driving distances are long. The feasibility of gas-operated vehicles can be improved by lower taxation, and on the other hand, there is a risk of lower feasibility if the maintenance costs are higher for gas-operated vehicles. For a consumer there

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might be an additional risk that the residual value of a gas-operated vehicle is lower if the biogas production decreases over time. Political decisions related to biomethane have varied for example in Finland. The taxation of gas-operated vehicles has also changed, and it has probably lifted the threshold to buy operated vehicles. The gas-operated vehicle technology does not seem to put major limitations for the growth as it can be seen that in several countries gas-operated vehicles can be the main vehicle type.

Maybe more research could be carried out on gas-operated vehicles in northern climate.

The main technical disadvantages of gas-operated vehicles seem to be shorter range with gas and smaller space in boot due to gas tanks.

In addition to feasibility for different operators the feed-in tariff for electricity produced by biogas has effects on the big picture. It is highly likely that the feed-in tariff increases biogas production and use in electricity and heat production. If the feed-in tariff increases the electricity and heat production and heat cannot be utilized, the total GHG emission savings may be lower than with the transportation use. According to the results, biogas use is highly dependent on current policies and subsidies. However, there is a risk that the subsidies are not directing biogas use into the most potential direction.

In addition to electricity and heat production, biogas use as a transportation fuel should also be subsidized equally.

Based on this result, the government and communities could subsidize biomethane utilization by approximately 140 € annually per each gas-operated car because of the reduced external costs. This could be directed for example to biomethane car prices and taxation or for subsidizing biomass producers to direct their feedstock for biomethane production instead of alternative utilization options. As was seen in the economical results section, the support based on political decisions would be needed in some parts of biomethane production and utilization chain. There are however huge uncertainties related to external costs and their evaluation.

By using biomethane as a transportation fuel Finland could, in theory reach the EU’s biofuel targets. Meeting the targets would demand long term development in gas utilization in the transportation sector. Italy had the fastest growth in gas-operated vehicles in 2009–2011. It has increased the gas-operated vehicle amounts by approximately with an average of 0.23% of all vehicles annually. Sweden posses the second fastest growth which has been approximately 0.08% annually during last ten years. Finland could reach the maximum of 60 000 gas-operated vehicles by year 2020 with the Italian growth rate. This amount of cars is only 5–6 % of the passenger cars in Finland. If those vehicles were passenger cars, they would consume approximately 600 GWh gas annually. This amount could be relatively easily produced by using feedstock with the easiest access, such as biowaste and WWTP sludge. What are the factors that have led to higher gas-operated vehicle amounts in different countries? According to IEA (2010), there are several factors which drive the expanded utilization of gas-operated vehicles. These factors are for example air quality, freeing up oil for exports,

5.1 Synthesis 135 reducing governmental spending on subsidies, promotion of local vehicles, improving security and overall gas market development. Taxation and subsidy policies seem to be the most important factors to affect the growth rate of gas-operated vehicles. (IEA, 2010)

The approach to study the limiting factors for biomethane use in the transportation sector can be further developed to be used for all of the transportation energy systems.

To find out the key issues, which may limit the increasing utilization of new transportation energy options, the following perspectives should be taken into account:

technology, economy and policy. All of these perspectives should be studied along the life cycle of the product. From the technology perspective, the production potential, distribution infrastructure and vehicles should be studied. From the economic perspective, the feasibility for different operators along the life cycle should be studied.

From the political perspective, subsidizes should be directed to the bottle necks along the life cycle. Subsidizes can be based on the reductions from the external costs by utilizing alternative transportation fuel options compared to the options in use. Another option could be to reduce subsidizes for fossil fuels. This may however, be very difficult. Using methods presented in this dissertation could be further utilized for local studies for example for hydrogen and electric cars. In addition, there may also be some smaller additional limiting factors, which are not applicable for biomethane but for other fuels.

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Figure 8. Systematic approach for recognizing limiting factors for transportation energy systems.