The development process for a biogas plant | In Principle

Growth of agricultural biogas plants is an essential component of Poland’s energy transition. In the second article of our series on biogas plants, we present the most important aspects and pitfalls of the development process for these facilities.

The stages of the development process

To simplify, the investment process can be divided into the following stages:

• Conceptual stage. Here, first of all, the investor needs to make a business case for the project, in particular taking into account the financing of the project. While the finances are fundamental to the investor, that issue is beyond the scope of this article. We will focus instead on the environmental regulations. In this respect, the concept for the project must be tied to the waste management plans, and the project must be correctly classified from several points of view, bearing in mind how this will impact the development process and the responsibilities of the investor and, later, the operator of the facility
• Siting and construction. At this stage, it should be determined:
  • Whether the facility will be situated based on the local zoning plan or on an individual land-use decision
  • Whether an environmental impact assessment will be required, and if so, what type (which depends on appropriate classification of the project)
  • What type of building permit will be required.
• Handover. This stage raises two major issues:
  • The approvals required to put the completed facility into operation
  • The type and scope of required environmental permits.

The starting point for the rest of this article will be reconciling the development aims with the waste management plans.

Waste management plans and the development process

Under the EU’s Waste Framework Directive (2008/98/EC), Poland’s Waste Act requires adoption and implementation of waste management plans. This is one of the most important legal instruments applied in the handling of waste, which is regulated primarily in Chapter III of the directive. On the ground, the system of waste management plans in Poland is currently limited to plans at the province level, as the previously envisioned plans at the county and commune level were eliminated. (Which is not to say there is no planning at the national level, currently in the form of the National Waste Management Plan for 2028 adopted by government resolution no. 96 of 12 June 2023.) For the purpose of this article, we will focus on the province plan, of which the investment plan is an indispensable component (Waste Act Art. 35(4)).

The investment plan should identify the needed infrastructure for municipal waste, including construction and demolition waste, with the processing capacity to limit generation of this waste and manage the waste that is generated. This is necessary to achieve the objectives set by EU law.

If the planned biogas plant is to be part of the infrastructure related to management of municipal waste, it should be noted that under Art. 35(9) of the Waste Act, with regard to limiting and managing municipal waste (including construction and demolition waste), inclusion in the investment plan is a condition for municipal waste projects to be eligible to receive subsidies from EU funds or national funds for environmental protection and water management.

Classification of the development aims

At the initial stage of the development process, a number of requirements for the investor will be driven by the classification of the aims of the development, as a “venture”, an “installation,” or a “communal installation.”

The project as a “venture”

The starting point is classification of a project as a “venture” under Art. 3(1)(13) of the Environmental Impact Assessment Act, defined as intended construction or other interference with the environment involving a change in the method of land use, including extraction of minerals. Technologically related projects qualify as a single venture even if implemented by different entities. An example is implementation of a project divided into a biogas plant and a biogas purification plant for obtaining biomethane, which, pursuant to the act, are technologically related.

Thus it is clear that the project of a biogas plant is a “venture” for purposes of the EIA Act. But for the investor, the basic question is whether the project is “a venture that may significantly affect the environment,” and if so, whether it is a venture that is always presumed to negatively affect the environment (first group) or will only potentially negatively affect the environment (second group).

The implementing regulation for the EIA Act (government regulation of 10 September 2019) lists 53 types of ventures in the first group (§2(1)) and 108 types of ventures in the second group (§3(1)). If by its nature the project is “a venture that may significantly impact the environment,” it will be necessary to obtain a decision on environmental conditions.

It may also be necessary to conduct an environmental impact assessment. This is mandatory for ventures in the first group and sometimes also necessary for projects in the second group.

A plant intended for production of biogas from biomass may be classified as a venture that is always presumed to have a significant impact on the environment. This depends on the legal status of the biomass used for biogas production. This classification will be necessary when the biomass used for biogas production has the status of hazardous waste (§2(1)(41) of the regulation), or, if the biogas produced at the plant will not have the status of agricultural biogas, the installation’s waste acceptance capacity exceeds 10 tonnes per day (§2(1)(47)).

The project as an “installation”

The next classification involves the notion of an “installation” and will be relevant from two perspectives:

• At the stage of the development process, in terms of a potential environmental impact assessment (whether it meet the requirements for a given type of installation)
• At the stage of handing over the finished facility for use (in terms of the type of environmental permits required for the installation).

The concept of an “installation” is fundamental for emissions law (protecting the environment from pollution, regulated mainly in the Environmental Protection Law).

Under the definition in Art. 3(6) of the Environmental Protection Law, an “installation” is a stationary technical device or a set of technologically linked stationary technical devices, legal title to which is held by the same entity, located on the premises of one plant, also including structures that are not technical devices or sets of technical devices but operation of which may generate emissions (for more, see M. Górski, commentary to Art. 3(6), in M. Bar et al., Environmental Protection Law: Commentary (3^rd ed., Warsaw 2019)). If the project is by its nature an “installation” (as a biogas plant undoubtedly is), it will be necessary to:

• Comply with the general rules for operation of installations, directly binding under the Environmental Protection Law, and
• Obtain the relevant emission permit, if required by law.

In terms of the obligations of the operator of an installation, Art. 76(1)–(2) of the Environmental Protection Law conditions the possibility of putting a newly constructed or reconstructed structure, set of facilities or installation into operation on:

• Implementation of technical environmental protection measures required by law or an administrative decision
• Application of appropriate technological solutions stemming from laws or decisions
• Obtaining the required decisions defining the scope and conditions of environmental exploitation.

The project as a “communal installation”

The term “communal installation” (instalacja komunalna) is relatively new, introduced into the Waste Act by the amending act of 19 July 2019. In the amendment, the parliament abandoned the use of communal waste management regions and the associated regional communal waste treatment installations (RIPOK). Pursuant to Art. 35(6) of the Waste Act, a communal installation is an installation for processing of mixed (unsegregated) municipal waste or residues from the processing of such waste, included in the list referred to in Art. 38b(1)(1) of the Waste Act, meeting the requirements for best available techniques referred to in Art. 207 of the Environmental Protection Law or the technology referred to in Art. 143 of the Environmental Protection Law, ensuring:

• Mechanical and biological processing of mixed (unsegregated) municipal waste, and separation from such waste of fractions suitable in whole or in part for recovery, or
• Storage of waste generated in the mechanical and biological processing of mixed (unsegregated) municipal waste and municipal waste sorting residues.

Art. 38b of the Waste Act also requires the province governor to maintain on the Public Information Bulletin a current list of:

• Operating installations meeting the requirements for communal installations that have been handed over for use and hold the required decisions for processing of waste, as referred to in Art. 35(6), and
• Communal installations planned to be built, expanded or upgraded.

Entry on the list is made upon written application by the operator of the communal installation.

The obligation to build such installations rests primarily with communes (gminy), under Art. 3(2)(2)(a) of Act on Maintaining Cleanliness and Order in Communes. Art. 9e of that act requires an entity collecting municipal waste under a contract with property owners to transfer mixed (unsegregated) municipal waste collected from property owners directly to a communal installation.

This rule must be taken into account by head of the commune (e.g. the mayor of a city or town) when drafting the procurement documentation for collection of municipal waste from inhabitants of the commune (Art. 6d(4)), and subsequently in the contract for collection (or collection and management) of municipal waste from property owners (Art. 6f(1a)). Operation of a communal installation is overseen by the head of the commune and and the governor of the province.

However, for a biogas plant project, this classification is not of decisive importance, because by its nature a biogas plant in the form of a standalone installation is not regarded as a communal installation. However, one might wonder whether erection of a biogas plant as part of a larger “technological line,” including facilities listed in Art. 36(6) of the Waste Act as potential communal facilities, would give the biogas plant the status of a communal installation. However, this would be relevant only in the context of facilitating access to financial resources supporting projects related to municipal waste management, or possibly in the context of ensuring a steady supply of waste for processing at the installation.

Concluding remarks

Implementation of agricultural biogas plants requires compliance with a number of obligations stemming from several different laws governing waste and other environmental issues. This poses numerous problems and pitfalls for the investor, which can significantly prolong the development process.

One key to the development process for agricultural biogas plants is correct classification of the project under the relevant environmental laws. The particular classification can greatly expedite or delay the entire process. Therefore, each case requires individual analysis, with particular attention to local law and local conditions.

We will provide further information on the development process for agricultural biogas plants in future articles. We encourage you to read the whole series.

Prof. Marek Górski, attorney-at-law, Dr Adrianna Ogonowska, attorney-at-law, Karol Maćkowiak, Environment practice, Wardyński & Partners