LAUSR

The paper explores the potential of the main state economic incentive (Conto Termico) designed to promote the use of renewable energy sources for heating and cooling purposes in residential buildings, aiming to reduce primary air emissions from residential biomass combustion (RBC). For this purpose, an emission reduction scenario involving the technological transition of biomass residential heating appliances was implemented in the lowland small‐medium municipalities of the Lombardy region in Italy, where households are connected to the natural gas grid but RBC is often practiced for economic reasons, contributing to severe air pollution problems related especially to particulate matter (PM) emissions. This technological turnover scenario (i.e. all biomass appliances in the area replaced by state‐of‐the‐art pellet appliances) resulted in a significant reduction of particulate matter emissions, while having only a minimal impact on NOx emissions. The incentivized cost for technological turnover (€15/kgPM10 avoided) was in line with the social costs associated with health impacts related to PM10 in a rural setting such as the study area. Given the one‐off investment support provided by a recently adopted national decree (DM 15/09/2022), biomethane emerges as a promising renewable energy alternative to decrease PM and NOx emissions from RBC in Lombardy region, characterized by an extensive natural gas distribution network and potential waste feedstock for biomethane production. Despite the still elevated production costs, an analysis restricted to the incentivized segment reveals that supporting biomethane production through investment incentives is more cost‐effective (€8/kgPM10 avoided) than promoting technological turnover.