Europe’s biomethane market is undergoing seismic regulatory and commercial shifts, opening as many opportunities as challenges for all stakeholders involved. With regulatory fragmentation, ambitious climate targets, and delayed policy moves fuelling both anticipation and anxiety.
In 2025, market participants have been navigating (and still are) a shifting landscape shaped by institutional battles, new obligations, bureaucratic overhauls, and the ever-present uncertainty of macroeconomic sentiment. But some topics stand out more than other. Below is our breakdown of all major topics that we keep hearing on the market and that will shape how the biomethane market will look in the coming days.
I already spoke about this topic earlier this year on the Bioenergy Insight magazine (read the article here). The struggle between ERGaR and AIB remains a major structural challenge for biomethane market liquidity and transparency.
ERGaR’s Certificates of Origin (CoO) are deeply embedded in the northwestern European trade corridor, moving more than 3 TWh of biomethane cross-border in 2024 alone. Yet, the Association of Issuing Bodies (AIB), with its robust and harmonised Guarantee of Origin (GO) framework, is scaling up for renewable gas and pushing for pan-European traceability.
As the EU leans toward harmonisation, registries are being urged to consolidate under the AIB hub, but for now, duplication and confusion persist.
Originally set to come live in November 2024 to then be fully used in May 2025, the Union Database (UDB) is currently in what can only be described as an “implementary limbo”.
The UDB is poised to become the backbone of biofuel and biomethane traceability. Built on the RED II and RED III directives, and demanding full documentation from production to consumption, the idea of the UDB is welcomed for its anti-double-counting potential yet criticised for imposing severe administrative overhead. As existing registries scramble to integrate with the UDB and stakeholders wrestle with double data entry, concerns over business disruption remain top of mind.
FuelEU Maritime, effective from 2025, sets strict GHG intensity limits and penalties for noncompliance in shipping fuels. This has given a strong boost to the biomethane and bio-LNG sector.
With escalating GHG reduction requirements through 2050 and high penalty costs, market interest in biomethane (with its deeply negative well-to-tank emissions) is surging, despite production and regulatory challenges.
At OTC Flow we trade Biomethane for it's use as BioLNG in the maritme sector, whilst also managing the pooling allocations of the CO2 reductions from our clients.
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France’s Biogas Production Certificates (Certificat de Production de Biogaz, CPB) system kicks off in 2026, mandating natural gas suppliers to return CPBs to the state, there by enforcing a minimum biomethane supply. Managed by the European Energy Exchange (EEX), the system will be rolled out gradually, with increasing targets through 2028.
CPBs offer producers a new revenue stream for those plants upting for unsubsidized production and will be vital to meeting the ambitious French decarbonisation goals.
The Netherlands is moving away from a energy-volume-based certification method of complying with the biofuels mandates. Historically, Dutch mandated companies had to surrender enough Renewable Fuel Units (Hernieuwbare Brandstof Eenheden, HBEs) to comply. Now this system is getting replaced in 2026 by a carbon-based methodology with the Emission Reduction Units (Emissiereductie-eenheden, EREs), which will also be split by industry, making the role of very-low-carbon fuels such as BioLNG and BioCNG made from Wastes and Manure much more attractive for compliance.
On top of that, we also foresee a rise in demand for grid-injected Biomethane. As of 2027 we will observe the introduction of Green Gas Units (Groene Gaseenheden, GGEs) which will force Dutch suppliers of gas to have a minimum number of their volumes covered by green gas through the use of these new certificates.
In a move reflecting both social concern and regulatory caution, the EU’s second rollout of the Emission Trading System (ETS2) of the carbon market in road transport and buildings has been postponed to 2028. This delay was driven by intense macro-economic competition, fears over inflation, and the prospect of civilian mobilization; but it risks dulling price signals and slowing investment in cleaner alternatives. It is expected to see a temporary decline in allowance demand and reduced funding for support measures, clouding near-term confidence for emissions credit providers.
It also risks affecting other roadmaps. The Netherlands’ GGEs were supposed to play closely together with the ETS2, now leaving a gap-year where carbon pricing might be subject to estimations.
While ETS1 offers a zero-emission rating for biomethane used by operators, guidance differences between schemes, national implementations, and market-based instruments muddle compliance. As reporting standards evolve and new directives intersect, operators frequently find themselves in interpretative disputes, risking inefficiency or disallowed claims.
Many of the above-mentioned problems are caused (or intensified) by the slowness displayed by Member States in the transposition of the RED III directive into national law. Further delays threaten to leave early movers exposed and projects idle.
The biggest hurdle comes around the complex, multi-phase obligation on RFNBOs and advanced biofuels. If the RED III compliance rulebook (thus eligibility for reporting under biofuel schemes) is yet to be fully implemented, how can blenders, distributors, and operators make informed decisions on their forecasts?
Current premiums on biofuels are driven by a heavy dose of speculation, with FUD being a daily factor in the current market.
Despite regulatory hurdles, the 4.6 Billion Euro investment plan for biomethane is in full force, with plants coming live at a steady pace. Every month we observe a higher number of volumes on the market, yet demand seems to outpace supply.
However, mixed global decarbonisation efforts, inflation pressures, unclear regulatory guidance, and supply chain bottlenecks all create an uneven sentiment in the trust of the current framework. We just need to look at Donald Trump’s stance on the International Maritime Organization’s (IMO) “Net-Zero Framework” (NZF), which ultimately lead to the delay on the voting as the threats of tariffs floated in the air.
Everyone was talking about 2025 being a “transition year” before we enter a stable and bright 2026. But the merging of regulatory shakeups and macroeconomic continue to reshape the trajectory of biomethane and renewable natural gas markets.
Only the nimblest players, those able to navigate regulatory tectonics and cross-border compliance, will thrive. The stakes are high: Europe’s climate ambition, energy security, and industrial resilience may increasingly hinge on how quickly it can turn patchwork regulation into a seamless market.