The European Commission has given the green light to a €1.5 billion French State aid scheme aimed at ing sustainable biomethane production. This initiative is part of 's efforts to transition towards a net-zero economy. 5u2l3

The French scheme, notified under the State aid Temporary Crisis and Transition Framework (TCTF), focuses on the production of sustainable biomethane to be injected into the natural gas grid. The initiative is designed to enhance 's renewable energy capabilities and reduce its dependence on imported fossil fuels.

Key Features of the French measure

The measure targets new installations with an annual production capacity of over 25 GWh of biomethane. The beneficiaries will be chosen through a competitive bidding process, ensuring transparency and non-discrimination. Selected projects must be operational within 36 months of receiving aid.

The aid will be granted through two-way contracts for difference (CfD), lasting for 15 years. Moreover, the aid amount is determined by the difference between the strike price set in the bid and the market price of natural gas. If the market price exceeds the strike price, the beneficiary must return the difference to the state.

Projected impact

The scheme aims to the production of 1.6 TWh of sustainable biomethane annually. This significant increase in renewable energy production will help meet its climate goals and contribute to the EU's broader Green Deal objectives.

Compliance with EU regulations

The European Commission has confirmed that the French scheme aligns with the TCTF conditions. The aid will be provided based on an estimated capacity volume and budget, and must be granted by the end of 2025. Measures are also in place to ensure the aid does not distort competition, maintaining a level playing field in the Single Market.

Margrethe Vestager, Executive Vice-President in charge of competition policy, stated, “This €1.5 billion scheme will the production of sustainable biomethane in . By reducing reliance on imported fossil fuels, it will contribute to the achievement of the EU’s strategic goals. This measure is an important step in the transition to a net-zero economy, while protecting the level playing field in the Single Market.”

Background on the TCTF

The TCTF was adopted on March 9, 2023, and amended on November 20, 2023, and May 2, 2024. It aims to foster measures in key sectors crucial for transitioning to a net-zero economy. The framework includes:

- Renewable energy rollout: Simplified tender procedures for investments in all renewable energy sources.

- Industrial decarbonisation: for decarbonising industrial activities to reduce dependency on fossil fuels.

- Investments in key sectors: for manufacturing strategic equipment and components for renewable energy production and recycling.

The TCTF is designed to accelerate the green transition across the EU, with Member States able to grant aid until the end of 2025.

The approval of the €1.5 billion French aid scheme marks a significant milestone in the EU's efforts to promote sustainable energy solutions. By fostering biomethane production, is taking a crucial step towards achieving its net-zero ambitions and ing the EU’s broader environmental goals.