EU Biomethane Market Analysis

Biomethane is a clean, sustainable gas produced from organic material such as green waste; food waste; agricultural waste and industrial waste, through a biological process known as anaerobic digestion (AD). This gas can be combusted to generate electricity and heat or can be cleaned to remove impurities and upgraded to biomethane, to be injected into the gas distribution network, used as a vehicle fuel or to displace natural gas in commercial and industrial applications. Biomethane is set to become an important element of the global future energy strategy, helping to meet environmental targets while reducing reliance on gas imports.

Since the launch of the REPowerEU plan in May 2022, there is an urgency to transport Europe’s energy system and biomethane is expected to make a significant contribution. As a result, NNFCC was approached by a global sustainable energy producer with a keen interest in investing in the European AD market. With good knowledge and data of markets across Europe, and strong connections in key active and interested member states, NNFCC was engaged to explore and analyse market opportunities.

As part of the engagement, the team undertook a high level analysis of the AD sector in six European countries: the Netherlands, Germany, Denmark, France, Ireland and Italy gathering information about national and local energy strategies, sustainability policies and current or future planned biomethane incentive mechanisms. At the same time, data was collated on national feedstock availability, current AD capacity and existing transport, storage and distribution infrastructure, to establish where the greatest potential and most imminent opportunities were evident.

In addition to the country-specific analysis, it was also necessary to map out details of national biomethane trading schemes and relevant trading platforms, to determine where cross-border trade was permitted and likely to occur. To do this, key stakeholders in the biomethane market (production, handling and use) were identified and mapped.

A high level options appraisal was then performed, to identify how and where opportunities could align with the clients’ existing business interests, and to select priorities for further consideration. 


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