European Commission gives €3.7 billion to Czech Republic for biogas production

The European Commission has approved a €3.7 billion Czech scheme to support the construction of biogas/biomethane production stations in line with the objectives of the Clean Industrial Deal. The scheme was approved under the Clean Industrial Deal State Aid Framework (CISAF) adopted by the Commission on 25 June 2025.

Czechia notified to the Commission a €3.7 billion scheme to support the production of biogas that would be used in transport, heating and industry. The scheme will run till 2030.

The scheme will support new capacity in both newly-built biomethane stations and existing biogas stations that are converted into biomethane stations. The scheme will be open to biomethane producers holding a gas production licence in the Czechia. To qualify for aid under the scheme, biomethane production must comply with the requirements set out in the EU Renewable Energy Directive. The measure is expected to benefit mostly small and medium-sized farms.

The aid will take the form of a direct price support scheme, with a two-way contract for difference that provides a bonus for each MWh of biomethane produced for a duration of 15 years, based on a so-called strike price. If market prices of natural gas are lower than the strike price, the State will pay the producers. If they are higher, the companies will pay back the difference. The beneficiaries will be selected through a competitive tendering procedure.

The scheme is expected to support installations with a total output of 350 million standard cubic meters of sustainable biomethane, which contributes to the objectives of the Clean Industrial Deal.

The Commission assessed the scheme under EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the EU (‘TFEU’), which enables Member States to support the development of certain economic activities subject to certain conditions, as well as under the CISAF.

The Commission found that the Czech scheme is in line with the conditions set out in the CISAF. In particular, the aid will be granted based on a scheme with a clear estimated volume and budget, and the aid will be provided as direct price support through a two-way contract for difference, which will be awarded via a competitive bidding process.

The Commission concluded that the Czech scheme is necessary, appropriate and proportionate to accelerate the transition towards a net-zero economy and facilitate the development of certain economic activities, which are of importance for the implementation of the Clean Industrial Deal.

It has been held in official statement that on this basis, the Commission approved the aid measure under EU State aid rules.