The Czech biomethane market is about to change significantly from January 2026. The current system of “green” grants, which have been set on an administrative basis but failed to be widely used in practice, is to be replaced by an auction system. The auction system will be based on an “auction bonus”, an amount determined in CZK per MWh of heat of combustion. This change represents a major opportunity for biomethane producers.
Who are the potential recipients of the support?
Most of the biomethane is likely to originate from existing converted biogas plants.
The key auction parameters will include: the output range of the plants, the time needed for them to become operational, the minimum share of advanced biomethane, the maximum allowable greenhouse gas emissions, and the minimum monthly quantity of biomethane supplied. A bidder wishing to succeed in the auction will have to meet these requirements in its bid.
After evaluating the bids, the Ministry of Industry and Trade (the “Ministry”) will send the successful bidders a decision on the granting of the right to receive support. However, they become entitled to receive the support only after the plant becomes operational within the specified time limit and only after it reaches the corresponding output.
When does the support scheme take effect?
The auction-based support scheme for biomethane production will take effect on 1 January 2026. From this date on, biomethane producers may start using the new support scheme.
How much can you get from the support scheme?
The Ministry will announce an invitation to participate in the auction, which will be limited by overall output / volume of biomethane demanded. The Ministry may – but is not required to – set a maximum auction price and an annual adjustment procedure (i.e. indexation). After that, bidders will submit their bids offering an “auction bonus”, i.e. the auction price at which they are willing to supply biomethane.
The mechanism for paying the bonus will be designed to guarantee producers certainty at low market prices while avoiding overpayments at times of high prices. Biomethane will be purchased by an entity designated by the Ministry at the current average market price. If the market price is lower than the auction price awarded, OTE, the Czech energy market operator (“OTE”), will pay the difference to the producers to receive their auction prices awarded. On the other hand, if the market price of the biomethane exceeds the auction price, there is no entitlement to receive support in the given month, and the producer pays the difference back to OTE. Both the emission savings and the guarantees of origin of the biomethane produced will accrue to the Czech state.
How and where to apply for the support?
You can apply for the support, i.e. being awarded an auction price, by registering through OTE. The biomethane producer must enter all the necessary data about the biomethane plant in the OTE system, carefully timing its individual steps. The registration is completed once OTE confirms the registration, informing the producer of the date of its registration.
Conclusion
The new auction support scheme for biomethane production is an important step towards using renewable energy sources efficiently and strengthening Czechia’s energy security. If you are considering building, renovating and/or buying a biogas plant and participating in the auctions, please do not hesitate to contact our dedicated energy law team.
