Monday, 29 March 2021
Italian oil and gas major Eni SpA have entered an agreement with FRI-EL Greenpower to acquire 21 biogas plants. Eni is seeking to convert the production to biomethane, which should see them become the market leader in the Mediterranean nation.
The deal, announced by Eni on 22 March 2021 sees its subsidiary Ecofuel taking ownership of the Greenpower company, FRI-EL Biogas Holding, which currently uses the biogas produced from organic municipal wastes to generate electricity.
The upgrading of the biogas to biomethane should see an annual production of 50 million cubic metres, equivalent to 0.5 TWh. The venture is aligned with Eni's object of the elimination of all emissions from its industrial processes and products by 2050.
The upgraded biomethane will be able to fulfill demand for green natural gas used in industrial processes and the transport industry, where Eni has already acted to increase supply of both CNG and LNG (Compressed/Liquified Natural Gas) to Italian customers.
Claudio Descalzi, Eni’s CEO, said “With this deal, we have laid the foundations for strong growth in the biomethane sector, which will be distributed in Eni’s service stations, both as compressed natural gas and as liquefied natural gas."
Continuing, "This is a strategic business area for us on the path to completely eliminating our emissions, and represents a significant contribution to decarbonizing transport and our ability to offer sustainable products to our customers. It provides a new and significant level of substance to continue on the path outlined in our strategy”.
The agreement is subject to certain conditions precedent, including the authorization of the relevant Antitrust authorities.
Italy is already one of the largest producers of biogas in Europe, with EurObserv'ER ranking the nation third in output in 2018, only behind the UK and Germany.
The Italian government has also promoted biomethane as a transport fuel via a Biomethane Decree, which came into force in 2018. This has encouraged the proliferation of biomethane plants, the Italian Biogas Consortium (CIB) reporting 22 biomethane plants as of the end of October 2020, with a combined capacity of just under 20 000 cubic metres per hour. This suggests a national annual production of around 160 million cubic meters of biomethane, meaning Eni would own approximately one-third of the country's current production means.
Despite relatively high production and a friendly legislative environment, Italy does not have a functioning biomethane Guarantees of Origin (GO) register to allow trading of green attributes of biomethane independent from the physical gas, although this will likely be developed in the near future once the provisions of the recast RED II relating to GOs for renewable gasses are adopted.