EU supports Portugal’s €320 million biomass scheme

In order to support biomass energy installations that are located close to forest areas regarded as ‘critical’, Portugal has started a scheme that has received backing from the European Commission.

Under EU State aid rules, the European Commission has approved the Portuguese biomass scheme to implement new installations that will produce both electricity and combined heat and power (cogeneration).

The scheme aims to incentivise forest owners to clean the forests that are at risk by using forest residues to produce biomass energy. Portugal hopes that this will help to prevent future fires from starting. A feed-in premium (a top-up payment over the market price) delivered to every installation for every unit of electricity produced is to be supplied to provide aid to the at-risk forests.

An environmental tariff premium called PDIF is also to be introduced for the use of the biomass that will be produced from the Portuguese forests that are in ‘critical’ areas.

According to a European Commission statement, Portugal expectshat the scheme will run for 15 years. It will have a budget of around €320 million ($407 million) whilst also receiving funding through an increase in energy tariffs.

The European Commission has determined that the Portuguese scheme meets the requirements of the 2014 Guidelines on State Aid for Environmental Protection and Energy. As the scheme will help the country increase the share of electricity produced from renewable resources, it will also help Portugal meet its climate targets, in line with the environmental objectives of the EU.

The Commission also concluded that the scheme is in line with the 2014-2020 Agricultural Guidelines.