The implications of economic instruments on biogas value chains: a case study comparison between Norway and Denmark
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The implications of economic instruments on biogas value chains: a case study comparison between Norway and Denmark Kari‑Anne Lyng1,2 · Lise Skovsgaard3 · Henrik Klinge Jacobsen3 · Ole Jørgen Hanssen1,2 Received: 21 February 2019 / Accepted: 26 August 2019 © Springer Nature B.V. 2019
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 whether 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 value chain 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. Keywords Biogas · Environmental policy · Regulation · Value chain
* Henrik Klinge Jacobsen [email protected] 1
Ostfold Research, Stadion 4, 1671 Kråkerøy, Norway
2
NMBU, Faculty of Environmental Sciences and Natural Resource Management, Norwegian University of Life Sciences, 1432 Aas, Norway
3
DTU Management, Sustainability Division, Technical University of Denmark, 2800 Kgs. Lyngby, Denmark
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1 Introduction Biogas production from organic resources is seen as a measure to reduce greenhouse gas (GHG) emissions in several sectors. A large variety of policies have been proposed and implemented to increase and improve biogas production. In this paper, we aim to clarify how these policies can affect biogas value chains, specifically by evaluating the effect of regulatory measures. This is done by comparing two countries, Denmark and Norway, with similar income level, size and policy objectives, but different structural conditions for biog
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