In December 2013, the Italian Ministry for Economic Development finally started the long-awaited incentive program for biomethane grid injection and biomethane for transportation, which opens up new opportunities for alternative applications of biogas which are expected to bring additional environmental benefits. Because of the wider range of feasible options and of the increased complexity of incentive structures, identifying most suitable alternatives becomes more and more difficult for entrepreneurs and local authorities. Biomass feedstock is a scarce resource and the profitability, environmental and social impact of biogas projects are affected by decisions on technology, location and capacity, which are interdependent. The aim of this paper is to explore the mutual links between such decisions, and their impact on sustainability indicators at the light of Italian energy policies. Mixed integer linear programming is used to develop a biomass supply chain model to deal with strategic planning issues of biogas supply chains. The model is applied to a case study of a local community including 15 municipalities in Friuli Venezia Giulia, where a number of breeding, cropping and greenhouse farms could be involved in a joint biogas project or in the development of multiple, small scale initiatives. It is found that upgrading technologies become feasible under the new support mechanism, but optimal capacity and utilization paths are very sensitive to boundary conditions such as local feedstock and land availability.
