January 5, 2023. Estonian Minister of Economic Affairs and Infrastructure Riina Sikkut has signed a regulation extending the subsidization of biomethane used in transport until June 30, 2024.
“Estonia has been developing the biomethane market for some time but the need for it has become even more urgent during the energy crisis as the availability of natural gas has become a problem in all of Europe. The local production of environmentally friendlier biomethane is necessary so that we can further shift away from natural gas of fossil origin and make ourselves less dependent on energy sources from other countries,” Sikkut said.
The subsidization period for biomethane was supposed to conclude at the end of 2023 but increasingly ambitious renewable energy targets and a supporting budget have enabled to extend the period. The leftover funds for the development of the biomethane market total 11.8 million euros. The funds come from revenues from carbon dioxide quota trading.
The subsidy for biomethane supplied for the transport sector is 100 euros minus the average monthly price of natural gas per megawatt-hour for the ongoing month. Support is not paid if the price of gas is higher than the upper limit.
The state-owned transmission system operator (TSO) Elering has been paying the subsidy based on the produced biomethane that has been made available for consumption directly to producers from 2018. As at 2022, the paid out subsidy totaled 25.3 million euros.
The subsidy contributes to achieving the objective that renewable energy should equal at least 65 percent of domestic final consumption by 2030. Renewable energy used in road and rail transport should account for at least 14 percent of all energy consumed in the transport sector by 2030.