Is biomethane the long term solution to stabilising EU energy markets?
Biogas and biomethane can reduce the amount of CO2 released into the atmosphere and increase energy flexibility. Policy frameworks, technological improvements and increased cooperation between countries are making biogas and biomethane more accessible, with projections for the two energy sources to triple between 2030 and 2050.
Biogas and biomethane
Biogas is a combustible gaseous fuel that is collected from the microbial degradation of organic matter in anaerobic conditions. Biogas is principally a mixture of methane (CH4) and carbon dioxide (CO2) along with other gases. Biogas can be collected from landfills, covered lagoons, or enclosed tanks called anaerobic digesters. Biogas is commonly produced from animal manure, organic wastes, and sludge settled from wastewater. However, biogas can also be made from almost any feedstock containing organic compounds, both wastes and biomass (energy crops). Methane is also the main component in natural gas, a fossil fuel. Biogas can be used to replace natural gas in many applications, including cooking, heating, steam production, electrical generation, vehicular fuel, and as a pipeline gas. While combustion of biogas, like natural gas, produces carbon dioxide (CO2), a greenhouse gas, the carbon in biogas comes from plant matter that fixed this carbon from atmospheric CO2. Consumption of fossil fuels replaced by biogas, under the right conditions, would lower CO2 emissions. It’s “renewable” in the sense that the feedstock could theoretically continue in perpetuity and could convert climate-warming methane to the less potent greenhouse gas carbon dioxide. But emissions reductions vary widely depending on the project.
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 wint