"Biomethane produced in Europe is right now 30 percent cheaper than fossil natural gas and can reduce EU energy dependency on external suppliers. Clear political support would give investors confidence to support biomethane deployment and a rapid scale-up is needed if the EU 27 is to achieve a biomethane production of 10 percent by 2030," says the European Biogas Association (EBA).
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Today, the natural gas price stands at EUR 80 per MWh (excluding carbon prices for users under Emissions Trading System – ETS) compared to EUR 18 per MWh a year ago. Prices for next winter are expected to remain at a similarly high level, according to current estimations.
While governments are struggling to reduce the impact of soaring energy prices on citizens’ energy bills, they have a solution within reach: scaling up the production of sustainable biomethane, aka renewable natural gas (RNG).
In contrast, the price of biomethane can be 30 percent lower than the current natural gas pricing. Biomethane can be produced starting from EUR 55/MWh, whereas natural gas costs around EUR 80/MWh, with an additional EUR 18/MWh if applicable given that the carbon price under the ETS has reached EUR 90/tonne.
Supportive legislative support needed
The European Biogas Association (EBA) reckons that this renewable gas will likely remain cheaper than natural gas in the short and also in the long term. Whilst other renewable gases such as green hydrogen need time to scale up and are still 2-4 times more expensive – up to EUR 180/MWh, biomethane is available and scalable within the coming eight years left to 2030.
The rapid scale-up of biomethane across Europe could provide at least 34 billion m3 (bcm) of renewable gas by 2030 if underpinned by a supportive legislative framework.
This amount represents approximately 10 percent of total EU gas demand by 2030. This potential is reflected in many recent reports from different sources, including the European Commission. According to the EBA, if the growth trend continues, by 2050 the biomethane industry could cover 30-40 percent of the EU gas demand.
Energy security
The deployment of biomethane made in Europe can help stabilize the current gas price increase related to disruptions of gas supply from third parties. There is an urgent need to reduce dependence on external gas suppliers, as the EU produces today less than 15 percent of its gas demand.
The current conflict between Russia, Europe’s biggest gas supplier, and Ukraine, could exacerbate the energy crisis due to a shortage of gas supplies. Soaring gas prices are having a direct impact on the energy bills of millions of EU households. This situation is forcing national governments across Europe to invest billions of euros into measures to protect consumers.
Call for new public-private partnership
Clear political support is needed to draw more investments into the sector and unlock the full potential of biomethane. The whole biomethane value chain is ready to boost biomethane production in the European continent.
EBA calls for a new public-private partnership to produce 40 bcm of biomethane by 2030. On top of the 34 bcm of sustainable biomethane by 2030, 6 bcm more can be produced in Ukraine.
This would provide additional renewable gas supplies while supporting economic growth in that country. Biomethane can be transported through the existing gas grids, which reduces additional costs of infrastructure deployment.
A strong sense of urgency is growing to secure investments and ensure the deployment of biomethane facilities across Europe. Additional partnerships, such as the recently launched Sustainable Biomethane Initiative, showcase the interest from industry users, producers, and other major companies within the value chain, on the deployment of this renewable gas right now. Fostering the rapid scale-up of biomethane means supporting climate change mitigation, reducing dependency on external gas supplies, and dealing with an unprecedented natural gas price increase. A clear legislative framework will provide certainty for long-term investments on the roll-out of sustainable biomethane, said Harmen Dekker, CEO of the EBA.
