Converting Biogas to Biomethane: When It's Worth It
For a plant that is no longer eligible for the electricity incentive, switching to biomethane means upgrading the gas to grid quality and feeding it into the grid, rather than burning it to generate electricity. This is often the option that allows plants to continue generating revenue after the incentive period ends, but it is a major investment decision: a complete conversion costs millions, and the application window for PNRR support closed in June 2026. Those with a concession agreement are now building the plant according to the terms; those without one are evaluating the conversion based on the fundamentals. It isn’t a viable option for every plant: suitability comes first, then the financials.
The Challenges of Conversion
Once the preliminary feasibility has been established, the economic viability hinges on a few key factors, which we will analyze using the plant’s actual figures.
Upgrading and Grid Connection
Following anaerobic digestion, the gas passes through an upgrading unit, which removes CO₂ and impurities and brings the gas up to grid quality. The upgrading unit alone costs in the range of 1–2.5 million euros, while the complete conversion of an agricultural facility runs into the millions. This is the capital investment that the return on investment must justify. The amount depends on the scale and configuration of the original facility.
Gas Line Connection
The distance from the feed-in point and the cost of the connection have a direct impact on feasibility and must be assessed first. Under ARERA’s revised regulations, a portion of the connection costs remains the responsibility of the producer. This is the factor that most often renders an otherwise sound project unfeasible, so it must be assessed before reviewing the detailed financial projections.
PNRR Incentive
The support is administered by the GSE as a subsidy: a capital grant on eligible expenses, subject to caps, plus a tariff on energy fed into the grid for fifteen years. The application period closed in June 2026, and no new application window has been announced: those with a concession agreement retain the support as long as they comply with its terms. Waste-derived biogas falls under the category of advanced biomethane, which is more heavily rewarded in the economic model. For more details, see the biomethane incentives page.
Timeline and Implementation
The window for concession agreements closed in June 2026: each agreement allows for approximately two years before the project becomes operational, with an actual timeline around 2028. Permitting, grid connection, and construction must be completed within those timeframes, as any delay could result in the loss of support. For those without an agreement, the viability is assessed based on key factors: guarantees of origin, the renewable gas market, and a comparison with the BIO-PMG.
Matrices and Sustainability
The availability, continuity, and traceability of feedstocks determine both the yield and eligibility for the advanced biomethane category—which is produced from waste and byproducts and commands a higher price. This is an issue that must be resolved before making the investment, as it affects the income statement throughout the plant’s entire lifespan.
Business Plans and Value Beyond Incentives
Subsidies, tariffs, operating costs, and long-term value—from guarantees of origin to the transmission market—determine a project’s bankability. We develop and test the financial models because that is what a bank or investor looks at before committing, and because the market value of renewable gas remains over the long term—beyond fifteen years.
What do we look at to make a decision?
Ultimately, conversion is or isn't worth it for a few fundamental reasons.
Cost-effectiveness compared to BIO-PMG
How much more does converting yield compared to staying on the minimum benefit, over a period of several years?
Bankability
The soundness of the financial statements, contracts, and hedges is what makes the project bankable.
Risk of Delays and Lapse
The realistic likelihood of meeting the terms of the support without losing the incentive.
Value Beyond the Incentive
What Remains After Fifteen Years: Guarantees of Origin and the Renewable Gas Market.
Based on our findings
How We Support You
We conduct a technical and economic assessment of the conversion, verify its feasibility and timeline, and, if the project moves forward, we oversee its implementation through to operation, ensuring compliance with the terms of support for those with a concession agreement—all handled by the same team that conducted the assessment.
Go to related pages
Where to learn more, within the world of Onirico Suisse.
A First Reading of the Conversion.
Tell us about your system: size, valves, and distance from the gas line. We’ll respond with an initial technical and economic assessment—provided confidentially—that evaluates the feasibility and cost-effectiveness of the conversion.