A first tranche worth around EUR 18 billion has been set aside by the biogas industry up to 2030 to ensure the scale-up of biomethane production and support both Europe’s energy security and climate mitigation ambitions according to a new report by the European Biogas Association (EBA).
Following the announcement of the REPowerEU target one year ago, the EBA estimated that reaching 35 billion Nm3 (bcm) of sustainable biomethane (aka renewable natural gas – RNG) production will require an investment effort of EUR 83 billion by 2030 depending on plant size, location, and type of sustainable feedstock.
Released on June 5, 2023, the 1st EBA Investment Outlook on Biomethane shows that a first tranche of EUR 18 billion has been set aside by the industry up to 2030 to ensure the scale-up of biomethane production and support both Europe’s energy security and climate mitigation ambitions.
These investments make additional whole-system benefits available to society, worth up to EUR 7.9 billion per year.
Matching policies, stable framework conditions, and pathways for long-term end-use are critical to secure the announced capital injection the EBA notes.
The first edition of the EBA Investment Outlook on Biomethane shows these efforts are taking shape: EUR 4.1 billion will be invested in the coming two years, EUR 12.4 billion by 2030 and an extra EUR 1 billion has been allocated with no specific timeframe. The EBA outlook will be regularly updated as investments ramp up, said Mieke Decorte, Technical and Project Manager at EBA.
Favorable policies attracting investment
According to the outlook, investments are mostly located in France (EUR 1.4 billion) and Italy (EUR 1.1 billion) thanks to favorable conditions in those Member States.
They are followed by the Netherlands (EUR 951 million), Spain (EUR 948 million), Germany (€658 million), Sweden (EUR 635 million), and Poland (EUR 429 million).
Additionally, EUR 5.5 billion of capital injection will stay in the EU with the final destination still open and EUR 3.3 billion will target non-EU territories, including the UK and Ukraine.
Tuning in the EU Taxonomy with the REPowerEU objectives for biomethane will steer capital flows into the sector, as investors indicate compliance with the specific EU regulation on sustainable finance is key to leveraging green investments.
A harmonized EU-wide cross-border trading system is of great importance as well, especially for unsubsidized projects.
Biogenic CO2 usage
The use of biogenic CO2 to replace products based on fossil-derived CO2 is included in the majority of business plans analyzed.
EBA notes that the importance of biogenic CO2 in offsetting CO2 of fossil origin is often underestimated, however; efforts should be made to assess its value fairly.
One of the highlighted uses of biogenic CO2 is the production of green synthetic methane (using green hydrogen), which could add substantial volumes of sustainable green gas to the energy system.
