The European Commission approves support scheme for advanced biofuels in Italy

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Type of post: NEWS IN BRIEF.

Last week, the European Commission approved under EU State aid rules an Italian support scheme for the production and distribution of advanced biofuels, including advanced biomethane (see press release IP/18/1441, 1/3/2018).

Key points:
Scope
It supports the production and distribution of advanced biofuels for use in the transport sector.
Indicative budget
4,700 M€.
The scheme will be financed by transport fuel retailers who are obliged by law to include a certain percentage of advanced biofuels and biomethane in their fuel blends.
Duration
From 2018 until 2022.
Guidelines
- Producers of advanced biofuels will receive a premium which allows them to compensate for higher production costs than fossil fuels and compete with them in the transport sector.
- The premium can be increased if producers also make investments to improve the distribution and liquefaction of advanced biomethane.
- The scheme will also incentivise farmers to produce biofuel and biomethane from manure and other residues originating from their farming activities and use them in turn to power their agricultural machines and vehicles.
- The level of the premium will be updated each year in relation to the production costs to ensure that producers are not overcompensated.

The Commission has concluded that the measure will help Italy reach its 2020 target for the use of renewable energy in transport, fight climate change and replace fossil fuels in the transport sector, while at the same time limiting distortions of competition, in line with the Commission's 2014 Guidelines on State aid for environmental protection and energy. The Guidelines allow Member States to support advanced biofuels under certain conditions. As part of the EU 2020 strategy, the Renewable Energy Directive requires all Member States to ensure that at least 10% of all energy consumed in transport come from renewable sources by 2020.

 The non-confidential version of this decision will be made available under the case number SA.48424 in the State Aid Register on the Commission's competition website once any confidentiality issues have been resolved.

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