CORPORATE BPA AND ETS COMPLIANCE

1. CBPA and Publication of the New Application Rules to the Biomethane DM.

The term "BPA" (biomethane purchase agreement) refers to the category of long-term contracts having as their object the supply of a certain volume of biomethane produced by a generation plant - under development and, therefore, to be realized, or already realized - to a purchasing party. The purchaser may be, alternatively, a "trader" or a final customer, as of the effective date of Law No. 101/2024, which converted Decree-Law No. 64/2024 ("DL Agricoltura"). In particular, Article 5-bis of DL Agricoltura provides for the extension of the definition of self-consumed biomethane also to biomethane consumed, at a site other than that of production, by an end customer active in the so-called "hard to abate" sectors who has signed with the producer a special contract for the purchase and sale of biomethane, i.e., a so-called corporate BPA or CBPA. 

On May 16, 2025, the GSE published the new application rules ("Application Rules") under Article 12 of the MASE Decree of September 15, 2022 ("Biomethane DM"), which better details the main terms and conditions of CBPAs, the main objective requirements to be met by the relevant biomethane plant from time to time and the subjective requirements of the parties involved in signing a CBPA.

2. Characteristics of the Plant

With reference to the requirements for the facilities underlying a CBPA:

• the plant must produce biomethane from the anaerobic digestion of biomass from the performance of agricultural, forestry, livestock, food and agro-industrial activities, i.e., it must be a so-called agricultural plant;

• the plant shall be eligible for the incentive tariff under the Biomethane DM.

3. End-customer characteristics

With reference, on the other hand, to the subjective requirements relating to the parties to a CBPA, in the case where the plant underlying the CBPA is connected to a public network, the Application Rules have specified that the end customer must be primarily active in a sector identified as "Hard to Abate," which includes (by way of example) cement factories, steel mills, paper mills, glass mills, steel and chemical companies. In contrast, this subjective requirement is not required with reference to the case where the facility covered by the CBPA is connected to a closed network.

4. Features of the Biomethane Purchase and Sale Agreement

The biomethane purchase and sale agreement referred to in Article 5-bis of the DL Agricoltura may be signed either before or after the commissioning of the biomethane plant relevant from time to time and must be transmitted to the GSE. Moreover, said type of agreement will necessarily have to comply with minimum requirements and contents detailed in the Application Rules and listed below.

First, the CBPA should cover the entire volume of biomethane produced by the relevant plant from time to time and its guarantees of origin.

Second, the duration should be at least one year.

Finally, the CBPA will need to include additional of provisions to ensure that the producer is subject to the instructions of the final self-consumer customer.

5. Concluding remarks

In light of the above, the Application Rules make it possible to complete the panorama of regulatory and normative sources necessary for the negotiability of corporate biomethane purchase agreements, which could take on a fundamental and growing importance within the contractual landscape of the Italian energy market given both the spread of an increasing number of plants generating biomethane from the purification of biogas from anaerobic fermentation of agricultural biomass and the relevance that agreements of this type can have for end customers with particular reference to internal sustainability and decarbonization objectives as well as the fulfillment of obligations under the European ETS (Emission Trading Scheme).