Is biomethane the long term solution to stabilising EU energy markets?

In addition to various climate goals, natural gas prices and volatility pave the way to alternative energy sources, which are not just a means to reduce national carbon footprints, but more and more a sector of strategic importance. European institutions, where bioenergy has become a hot topic, expect significant growth from the industry. 

Biogas and its upgraded, impurities-free version, biomethane, are the two forms of bioenergy best positioned to decarbonise areas in the energy system that low-carbon electricity cannot reach. 

These two gases can increase the flexibility of renewable, electricity-based power systems, as proven by the Danish example. Since the beginning of the war in Ukraine, the percentage of biomethane in the Danish gas grid has grown significantly, reaching 35 percent of the total gas injected towards the end of the year. 

According to the International Energy Agency , over 60 percent of biogas production capacity lies in Europe and North America. Europe is the leading biogas-producing region, with 20,000 biogas and biomethane plants.

RNG also raises other environmental questions, as it would provide incentives for industrial activities that are riddled with different problems. Similarly, sourcing the gas from farm manure could encourage the environmentally harmful practices of large factory farms that produce the methane.

Current biogas and biomethane production

A 2017 report by the Oxford Institute for Energy indicated that the European growth mainly occurred during a six-year window (2009 and 2015), when the number of biogas plants in Europe jumped from 6,000 to 17,000. After Germany, Italy, and France are the two countries with the most biogas plants.

Developments depend on policy frameworks, mostly incentive schemes like feed-in tariffs, but also which feedstocks can be used to produce biogas. 

For example, Germany’s biogas boom slowed down when a law aiming to reduce the use of energy crops like maize was introduced in 2014. Authorities are trying to avoid using feedstocks that could enter food production chains. The recent regional food crisis due to geopolitical tensions with Russia has made this reasoning easier to understand.

Industry objections remain: before they make the necessary investments and cut imported natural gas, they want long-term certainties and streamlined bureaucracy.

The Danish case

Denmark has decided that energy crops will be completely phased out by 2030. It will shift its attention to waste and feedstocks. About one-third of Danish biogas comes from slurry, with pig slurry representing 10 percent of biogas production. The remaining two-thirds of biogas production comes from agriculture and domestic organic waste.

Denmark is currently the European country set to grow the most in this domain. Biogas production increased from about 1.39 TWh (0.14 bcm) in 2014 to 7 TWh (0.7 bcm) in 2021, when biogas accounted for about 25 percent of total gas consumption. Denmark has the highest percentage of biogas and biomethane relative to total gas consumption, with 24 percent, followed by Sweden (20%) and Slovakia (12%). 

“There’s the new tender system, approved in 2020 and turned into legislation in 2021. We just miss the state aid approval from Brussels. We hope to get it very fast,” commented Bruno Sander Nielsen, director of the Danish Biogas Association. 

The position of the Danish biogas sector should improve further as the European institutions agree on more accessible state aid for specific sectors, and cooperation with neighbouring countries increases. Bioenergy should be one of the less politically sensitive sectors.

"The increase in biomethane production, as well as the drop in natural gas consumption due to price increases, can lead to a total substitution by the end of 2027," said Nielsen. In other words, the country might soon be completely independent of fossil gas.

The Danish industry will not just rely on subsidies. There are also implicit incentives, like CO2 reduction obligations for the transportation sector, which will force stakeholders in the value chain to find new fuels. "Biogas is very competitive. This means that some of the biogas production within the support schemes will turn into unsubsidised biomethane." Currently, 80 percent of the biogas is turned into biomethane and injected into the grid.

Long-term potential and targets 

Italy is another European country with strong potential due to a short winter season and consolidated agricultural production. Unlike Denmark, it currently uses most biogas directly for heat and power generation, rather than upgrading it into biomethane. The country is working on reversing this situation.

According to local agricultural associations, around 100 new consortia could produce biogas in Italy in the next couple of years. After a 10 percent growth over the next 12 months, production could grow 500 percent by 2026, says the Italian Biogas Association (CIB), an institution representing biogas production in the agricultural sector. 

CIB explains that the Italian government expects biomethane production to reach 2.3/2.5 bcm in 2026. According to CIB, the agricultural sector could produce 6.5 bcm of biomethane by 2030. An additional 1.5 bcm would come from urban waste processing by 2030. This would also happen through EU funding. 

"The European Commission's REPowerEu plan recognises the important strategic role of biomethane in energy transition: more than 35 bcm of biomethane are expected to be produced in the EU by 2030. Moreover, European biomethane potential can reach production of well over 167 bcm by 2050, covering 35-62 percent of the 2050 gas demand," explained CIB.

CIB has presented a roadmap for the agroecological conversion of Italian agriculture, whose aim is to promote a circular economy and reduce emissions in line with EU objectives. Italy, in particular, is promoting sequential cropping, which consists in growing two or more crops in sequence on the same field during the same year, providing both agricultural products for food production and organic material for biogas production.

"This model was born 10 years ago in Italy. We are very far ahead. The potential to 2050 comes from there. The strategic importance of the biogas sector has also to do with the fact that we have to restore nutrients to the soil in the Mediterranean, where erosion is a widespread phenomenon," said David Chiaramonti, vice-rector at the University of Turin.

Not all big EU agricultural producers (Spain, France, Poland, Romania, Germany) have climatic conditions that allow a straightforward implementation of sequential cropping. Still, northern member states like Denmark are also looking into it.

Chiaramonti underlined that current discussions are ongoing at the European level, and should end within the year, including the debate on the new Renewable Energy Directive (RED3 ).

Integrating biomethane and hydrogen 

Despite the recent opposition to using energy crops for biogas production in Germany, local experts are also seeing growth in the EU's leading economy, due to the federal government’s change of mind following current geopolitical tensions. 

"There is a gap between the electric targets and where we are at the moment. At the end of December, we had a couple of days where the biogas industry was the third greatest electricity producer in Germany, because of no wind and sun. The government is realising the importance of biogas," says Manuel Maciejczyk, COO of the German Biogas Association. 

The debate on Germany’s biomass strategy is expected to continue for the rest of the year. The core question is which input materials will be used in biogas plants in the future. Other questions are whether to use the biogas directly to produce electricity and power (Combined Heat and Power), or produce biomethane for other sectors, including transportation.

"It is feasible to integrate Power-to-Gas into biogas plants, because when you produce biomethane you have a lot of CO2 which you can use to produce methane from hydrogen. This would bring projections for biogas and biomethane in Germany to 180 TWh (18.42 bcm) and 230 TWh (23.54 bcm),” said Maciejczyk. In other words, biogas and biomethane technologies are mature, but innovation and integration with other energy sources, if encouraged, could bear sustainable fruit.

Biogas prevents nitrogen pollution and captures methane emissions that would otherwise escape from landfills or manure lagoons. However, it should be noted that an academic paper by three Imperial College London researchers, published in One Earth, suggests that emissions from the biomethane and biogas supply chains may have been underestimated so far due to high methane loss rates.

Cross-border trade, technological improvement, and a rethinking of agricultural processes could lead to a decrease in the prices of biogas and biomethane, which are already competitive on the local level. For instance, France's energy company ENGIE expects cost reduction to reach 30 percent by 2030. Improvements are also set to push emissions down in the bioenergy industry.

As a result, the Gas for Climate association expects biogas and biomethane to increase significantly in the two decades between 2030 and 2050, growing three-fold on average in Germany, France, Italy, and Denmark. Still, the projections vary greatly, in terms of both time frame and according to the source. This is for two reasons: production estimates are particularly complicated because biogas and its derivatives are normally consumed near the point of production, and data relies on the regulatory framework, which is taking shape, though, some might say, too slowly.