Green Gas – On the way to decarbonisation

Within the framework of an active climate and energy policy, challenging targets are set at the EU and Austrian level. These require a reduction of greenhouse gas emissions by at least 40 percent by 2030 compared to 1990 and an increase in the share of renewable energy sources from currently 33.5 percent to 100 percent by 2030. Renewable gas, which includes biomethane, hydrogen and synthetic methane, can be easily stored and produced, among other things, by means of recycling.

To this end, the Gas and Heat Association and the WKO Industry Division have commissioned an economic analysis of renewable gas. The Economica Institute of Economic Research and the Vienna University of Economics and Business formed a research partnership to conduct this study.

Austria can build on important advantages in the conversion to renewable gas. It already has a solid gas storage infrastructure, and its large industrial consumers primarily use gas as an energy source. Sufficient biomethane can be produced from residues and liquid manure fermentation to supply the space heating market in a completely CO2--neutral way. A massive expansion of wind power and photovoltaics would be essential for the production of hydrogen or synthetic methane – significant quantities would be available from 2035 at the earliest.

If the decarbonization of entire markets is to succeed, the decision making has to consider an array of aspects. Cost efficiency and positive side effects such as the reduction of noise and fine particulate matter must be taken into account when it comes to sequencing the order in which markets are to be decarbonized. In Austria it makes sense to supply the space heating market first, followed by transport with renewable gas.

As a political control element, a smart market premium model is appropriate. At auctions, green gas suppliers undercut each other in terms of market price, and the cheapest one wins the contract. Financing could take the form of a flat-rate surcharge on the network costs or income from the natural gas levy.

The common quota model for raising the green gas share encourages the purchase of gas from abroad, while the market premium model encourages the construction of own biogas plants. Since the raw materials used are also domestic, local biogas production and processing represents a significant stimulus for the domestic economy. Each job in a biogas plant secures up to two additional jobs in Austria.

Applied methods

By means of a meta-study and the inclusion of relevant technical literature, the state of research on the Austrian potential, production and application possibilities of renewable gas was surveyed. The market model analysis assessed the control effects and efficiency of common political promotion models. The value added effects triggered by the construction and operation of a biogas plant were calculated by means of an input-output analysis.

Your contact for queries

Gisela Szügyi
Tel.: +43 676 3200 400
Mail: gisela.szuegyi@economica.at