The implications of economic instruments on biogas value chains – a case study comparison between Norway and Denmark

Kari-Anne Lyng, Lise Skovsgaard Nielsen, Henrik Klinge Jacobsen*, Ole Jørgen Hanssen

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

This paper studies biogas value chains and the effect from various economic support instruments on these value chains. This is done by comparing two European countries that are quite similar in size, income levels and environmental ambitions, but which are using very different instruments to support biogas development. Norway provides investment support combined with support for inputs, while Danish support is focused on the biogas output side.
The aim of the comparison is to clarify if the policies in use have affected the design of biogas value chains such that they are determined by national support and are not viable under alternative support structures. Based on the findings possible modifications of national support and other biogas regulation policy are suggested. The comparative study assesses the costs and income of an exemplary Norwegian and a Danish value chain. The cases are evaluated by assessing the economic consequences of implementing the Danish instruments for a Norwegian value chain, and vice versa. We find that structural and regulatory conditions have a large impact on the configuration of the value chains. The Danish value chain in Norwegian settings results in a large deficit (-12.7€/tonne), while it was profitable in Denmark (+4.9€/tonne). The same is observed for the Norwegian value chain, but to a lesser extent.

The policy implication of end-use support in Denmark is large-scale plants, maximising the output through co-digestion of manure and high yield substrates, while avoiding losses. Investment support in Norway has increased biogas production from organic waste with less emphasis on efficient gas usage, while input support regarding manure has led to an increase in the usage of manure as substrate.
Original languageEnglish
JournalEnvironment, Development and Sustainability
ISSN1387-585X
DOIs
Publication statusAccepted/In press - 2020

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