Biomethane in Sweden:

Governmental Incentives and Market Trends

Michelle Ekman, Swedish Gas Association
CNG and Biomethane manager

Global Biomethane Congress 2012

Outline
• The Swedish context
• Figures and market trends
• Political instruments and policies
• Biomethane prices
• Future trends

Michelle Ekman, Swedish Gas Association 2012-10-09 • 2

Swedish Gas Association
A member-funded organization dedicated to promote
a greater use of energy gases in Sweden

Safety and technology Information and public opinion

Michelle Ekman, Swedish Gas Association 2012-10-09 • 3

The Swedish context
Total final consumption (392 TWh)

District heating
13%

Electricity Transport
32%
Oil products
29% Industry

Residential,
Biofuels, peat, services etc.
waste etc.
19%
Coal and coke
Natural gas and 4%
LPG
3%
Michelle Ekman, Swedish Gas Association 2012-10-09 • 4
The Swedish context
13-15 TWh of natural gas

Eurogas

Michelle Ekman, Swedish Gas Association 2012-10-09 • 5

 Biogas production: 1,5 TWh
Wastewater treatment is the largest source

Wastewater treatment plants

Co-digestion plants

Small-scale on-farm plants

Industrial plants

Landfills

TREND: Landfill biogas decreases – co-digestion, on-farm and industrial plants increase

Michelle Ekman, Swedish Gas Association 2012-10-09 • 6

Biogas utilization pathways

BIOGAS PRODUCTION FLARING

HEAT SMALL-SCALE
UPGRADING
POWER/CHP

VEHICLE
GAS
GAS GRID
LARGE-SCALE
INJECTION
POWER/CHP

Michelle Ekman, Swedish Gas Association 2012-10-09 • 7

Market trends - utilization of biogas:
50% vehicle gas, 38% heat

TREND: Vehicle gas use increases rapidly – heat, power and flaring decrease

Michelle Ekman, Swedish Gas Association 2012-10-09 • 8

Market trends - vehicle gas:
60 % biogas, 40 % natural gas (1,2 TWh)

Natural gas Biogas Total sales of vehicle gas

Michelle Ekman, Swedish Gas Association 2012-10-09 • 9

 Why biogas in transport?
Up to 90 % reduction in CO2 emissions

100
79
g CO2/MJ fuel

80 76 76
63
60
40 28 28
17
20
4
0

Biogas and natural gas: 80-90 % reduction in NOX and PM emissions

Michelle Ekman, Swedish Gas Association 2012-10-09 • 10

Biomethane/CNG
filling-stations in Sweden
• 136 public stations,
September 2012

Michelle Ekman, Swedish Gas Association 2012-10-09 • 11

Market trends - gas vehicles
Rapid growth in the last ten years
– mainly company cars

37 000

1 500

550

Michelle Ekman, Swedish Gas Association 2012-10-09 • 12

Incentives to promote gas-
vehicles and other clean cars

40 % reduction of income tax for use of company gas-vehicles

1100 EUR clean Five year exemption from vehicle tax

car subsidy for clean cars (on average 660 EUR in total)

Free parking benefits in many cities

Stockholm congestion tax exemption

2004 2006 2008 2010 2012 2014

2012-10-09 •

2003 2005 2007 2009 2011 2013

Stockholm Airport: High priority queue for clean taxis

Ordinance of government purchase and leasing of clean

vehicles (100 % clean vehicles as of February 2009)

Michelle Ekman, Swedish Gas Association 13

National grants
Investment support for biogas

Climate investment Biogas technology

programmes (KLIMP) development grant

Investment support
for farm-based biogas

2004 2006 2008 2010 2012 2014

2003 2005 2007 2009 2011 2013

Gas stations grant

Michelle Ekman, Swedish Gas Association 2012-10-09 • 14

No tax on renewable fuels
A strong incentive for biogas
Biogas has a competitive tax advantage equivalent to about:
- 68 EUR/MWh compared to petrol
- 52 EUR/MWh compared to diesel
- 16 EUR/MWh compared to natural gas Full tax exemption
until end of 2013
80
60
EUR/MWh

Petrol
40
Diesel
20
0
2009 2010 2011 2012 2013 2015

No energy tax on natural gas

Natural gas has a competitive tax advantage equivalent to about:
- 52 EUR/MWh compared to petrol
- 36 EUR/MWh compared to diesel
Michelle Ekman, Swedish Gas Association 2012-10-09 • 15
 New legislation helps distribution
- The green-gas concept

Biomethane
Households

Industry

Natural gas Vehicles

• New tax legislation from 2011 makes it possible to use the

green gas concept across different local grids. Allows
consumer to order 100 % biogas and the tax exemption can
follow.

Michelle Ekman, Swedish Gas Association 2012-10-09 • 16

 Vehicle gas price development

Petrol
Diesel
Vehicle
Gas

Source: Statistics Sweden and FordonsGas Sverige

• The biomethane price is influenced by the oil price as

the fuels are exchangeable on the same market.

Michelle Ekman, Swedish Gas Association 2012-10-09 • 17

 Biomethane prices
- competing with diesel…
SEK/kWh

2,0

add. cost

add. cost VAT VAT VAT add. cost

VAT VAT
VAT distribution
1,0 CO2 tax CO2 tax
and station
distribution
CO2 tax energy tax energy tax distribution
and station and station
energy tax BIOGAS
BIOGAS DIESEL production DIESEL BIOGAS
DIESEL production at pump upgrading at pump production
at pump upgrading upgrading

2010 2011-2012 2011-2012

Michelle Ekman, Swedish Gas Association 2012-10-09 • 18

What is the additional costs
for the customer in Sweden?
Gas-car och diesel-car differ in energy-efficiency and price

Example: Volkswagen Passat

TSI 150 EcoFuel Masters (gas) vs. TDI 140 BlueMotion Technology (diesel)

How much energy is needed to drive 100 km?

In this example
the diesel-vehicle
Gas- 66,8 kWh/100 km is almost 50 %
vehicle more effective
than the gas-
Diesel- 45 kWh/100 km vehicle
vehicle
Aditional cost for a gas-vehicle: 3 cents/km
– A new car is owned during 7 years
– The car in driven 15 000 km per year
– The exemption from vehicle-tax during 5 years for both cars. Therafter a
yearly approx 90 Euro higher tax for the diesel-vehicle than the gas-
vehicle.
– The purchase price is approx 3500 Euro higher for the gas-vehicle

Michelle Ekman, Swedish Gas Association 2012-10-09 • 19

Future trends
• Growing market for
liquified biomethane and
natural gas:
– Substituting diesel in heavy duty
vehicles (Volvo and Scania)
– Substituting oil in ships
– Lowering distribution-costs when
fueling passenger cars

The first passenger ferry

in Sweden will be in
traffic in January 2013.
(Viking Line)

Michelle Ekman, Swedish Gas Association 2012-10-09 • 20

The liquified biogas plant in Lidköping
- Inauguration next week!

The film:
http://www.youtube.com/watch?v=hIAEe8X41PM&feature=youtube_gdata
Michelle Ekman, Swedish Gas Association 2012-10-09 • 21
 Thank you!

Swedish Gas Association

Michelle Ekman
Swedish Gas Association
Box 49134
SE-100 29 Stockholm
+46 70 685 4403
michelle.ekman@energigas.se