European Biomethane Reaches 7% of Natural Gas Demand in 2023

Biogas and biomethane production in the EU reached 22 billion cubic meters in 2023, representing 7% of total natural gas consumption. This growth, driven by massive investments, could revolutionize Europe's energy sector.

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Biogas and biomethane production in Europe hit a significant milestone in 2023, reaching 22 billion cubic meters (Bcm), according to the latest report by the European Biogas Association (EBA). This represents 7% of the total natural gas consumption in the European Union (EU). These volumes exceed the combined gas demand of countries like Belgium, Denmark, and Ireland.

Specifically, biomethane production increased by 21% within the EU, reaching 4.9 Bcm in 2023. This growth was primarily led by countries such as Italy, France, Denmark, and the United Kingdom, which are among Europe’s leaders in the sector. The EBA also reported an increase in installed production capacity, which now stands at 6.4 Bcm/year as of the first quarter of 2024.

Versatile Applications of Biomethane

In 2023, 23% of the biomethane produced was used in the transport sector, 17% in buildings, 15% for electricity generation, and 13% in industry. These multiple applications underscore its pivotal role in Europe’s energy transition. “Biomethane is a key resource for reducing Europe’s energy dependency while supporting the growth of other renewables,” said Harmen Dekker, CEO of the EBA.

Ambitious Targets for 2030

The REPowerEU initiative, launched in 2022, sets a target of 35 Bcm/year for biomethane production by 2030. Achieving this would require an annual growth rate of 35.9%. The EBA report highlights that 950 new biomethane plants are expected to be established over the next five years, adding 6.9 Bcm/year of additional capacity, mostly in European countries.

However, realizing these goals will depend on continuous investments and suitable regulatory frameworks. By 2040, the EBA estimates that biomethane production could cover 80% of the EU’s natural gas consumption, representing a €27 billion investment in the sector.

The Growing Role of Bio-LNG

Simultaneously, bio-LNG (renewable liquefied natural gas) is playing an increasingly important role in decarbonizing transportation. Currently, 14 EU countries produce bio-LNG, with 59 operational plants. This number is expected to rise to 105 plants in 2024, increasing the total capacity to 15.1 TWh/year.

Pablo Molina, technical officer at the EBA, explained that 80% of bio-LNG production would be allocated to road transport, particularly heavy-duty vehicles, which are challenging to electrify. The maritime sector is also showing growing interest in this energy due to sustainability pressures.

Market Challenges

Despite this growth, the market faces challenges. Guarantee of origin (GO) prices for biomethane in Germany, the Netherlands, and Denmark reached historic lows in December 2023, reflecting still insufficient demand. Additionally, bio-LNG prices remain elevated, with costs at €86.987/MWh in Rotterdam as of December 2023, representing nearly a €39/MWh premium over traditional gas indices.

To address these challenges, the EBA calls for faster permitting processes and more strategic planning to invigorate the market and encourage project developers.

Teréga and GRDF have commissioned a backfeed station in Lot-et-Garonne, showcasing their cooperation to adapt gas networks to the rise of locally produced biomethane in Nouvelle-Aquitaine.
Anaergia’s Italian subsidiary has been selected by Nortegas Renovables to build a biomethane facility in Andalusia using agricultural residues.
Mondi SCP will build a new biomass power plant in Ružomberok to boost energy self-sufficiency from 75% to 90% by 2027, with a €120mn ($129mn) investment supported by the European Union’s Modernisation Fund.
With a new EnviThan facility in Aube, EnviTec Biogas reaches 40 units in operation in France and confirms its deployment pace in the biomethane market.
Southwest Gas has submitted an agreement to the California Commission to inject biomethane produced from food and wastewater into its network, in line with SB 1440 regulatory requirements.
Quercus Real Assets and Elionia finalise a €76 mn bank financing to build three biomethane plants in Italy, with 50% of the debt guaranteed by SACE.
VINCI, through its subsidiaries, has established itself in the construction of Spain’s largest second-generation biorefinery, a €1.2bn project aimed at supplying 500,000 tonnes of sustainable fuels per year.
Ameresco commissions a biomethane facility in Lee County, processing 4,500 cubic feet of landfill gas per minute, and directly injects this renewable gas into the transmission network to reduce emissions and strengthen energy security.
A $24mn financing supports the construction of a 4.8 MW biomass plant designed to replace diesel in Opitciwan, bringing jobs and enhanced energy security for the Atikamekw community.
SUEZ and RATP Group formalise a supply contract for 100 GWh of renewable electricity per year, over a maximum period of sixteen years, powering the operations of the world’s third largest urban transport operator.
Valmet has secured a contract to supply a biomass boiler and flue gas cleaning system to Saica Group for its production site in El Burgo de Ebro, Spain, as part of its decarbonisation plan.
Qarlbo Biodiversity signed a memorandum of understanding with Woodland Biofuels for the delivery of thinned pine wood from managed forests in the United States to supply the Canadian company’s biomass operations.
The Canadian group Thermal Energy International has secured a CAD 1.4 million contract to install a heat recovery unit at a European malted barley producer, aiming to reduce energy costs and polluting emissions.
The asset takeover process of Global Bioenergies, under a pre-pack disposal procedure, has been extended until 18 July at noon, following requests from potential bidders seeking additional time to assess the French company's financial situation.
SIAAP and SUEZ have inaugurated a new biogas production unit at the Seine Aval wastewater treatment plant, the largest in Europe, as part of a modernization project to strengthen the energy sovereignty of the Paris region.
Canadian company Hydron Energy will supply its innovative INTRUPTor-Mid technology to produce renewable natural gas in Ontario, marking its first commercial order in the biomethane sector with a promise of significant cost reductions.
US President Donald Trump has ratified a law extending until the end of 2029 the tax credit on renewable natural gas production from biomass and animal manure, aiming to boost the rural economy.
Valmet secures a contract to deliver a bubbling fluidized bed biomass boiler and flue gas handling equipment to Kraftringen Energi's upcoming combined heat and power plant, aimed at strengthening energy supply in Sweden.
Elcimaï Environnement has completed a methanisation unit integrated into Laon's wastewater treatment plant, now enabling the conversion of sludge and bio-waste into biomethane injected into the local grid, meeting the annual energy needs of 1,150 households.
Infrastructure manager Teréga and GRDF inaugurated in Auch, Occitanie, the region’s first biomethane reverse-flow station, designed to facilitate biomethane transfer from the distribution to the transport network, representing an investment of €3mn ($3.27mn).

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