Biomethane, a renewable energy source derived from organic materials, is becoming a cornerstone of Europe's transition to sustainable energy. Its inclusion in the energy mix provides significant environmental advantages while supporting the European Union's ambitious climate objectives. As a direct substitute for traditional natural gas (grey methane), biomethane allows companies to reduce their carbon footprint by modifying their supply chain without requiring operational overhauls.
Many in the energy markets may already be familiar with biogas or biomass-based electricity. Biomethane begins with organic matter (biomass), which can be categorized broadly into crops, waste, and manure. Through processes such as anaerobic digestion or pyrolysis, this biomass produces biogas – a mixture composed of approximately 60% methane (CH4) and 40% carbon dioxide (CO2), along with trace amounts of other gases. Historically this gas has been burned on-site in a CHP (Combined Heating and Power) plant for local supply of electricity and heat.
What happens if you were to capture the biogas and purify it? This is how Biomethane is created, a biogenically sourced methane gas which can be injected into the gas grid and serves as a substitute to natural gas, which is why biomethane may also be called RNG (Renewable Natural Gas).
This process not only generates a renewable form of natural gas but also contributes to waste management and reduces greenhouse gas emissions.
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The process of purifying the methane gas into biomethane is colloquially called upgrading. During the upgrading process, the CO2 and other impurities are removed from the gas mixture. This CO2 is then normally vented out (considered as carbon neutral, as it was already captured during photosynthesis by the organic matter being gasified).
Emerging technologies now enable Carbon Capture and Storage (CCS) and Carbon Capture and Utilization (CCU) to manage the excess CO2 produced during the upgrading process. This CO2, considered as BioCO2 due to its origin, has three main destinations:
Similar as to with green electricity, once Biomethane enters the gas grid it is physically indistinguishable from Natural Gas. The only way we have to trace the sustainable characteristics of Biomethane is through the use of certificates, mainly Guarantees of Origins (GOs). These GOs are issued nationally either by an appointed body (VertiCer in The Netherlands, Energinet in Denmark) or by a voluntarily participating body (GGCS in The UK, DENA in Germany). In addition, these national registries fall under one of two European-wide collectives of registries: the ERGaR (European Renewable Gas Registry) or the AIB (Association of Issuing Bodies).
Alongside these certificates, economic operators may choose to participate in voluntary schemes as well, such as the ISCC - of which OTC Flow is a certified trader (link). This allows for a more comprehensive tracing of the value chain, together with the eligibility by end users to redeem these certificates against their EU ETS obligations, RED targets, SBTi/GHG Protocol pledges, and in general any greenifying of gaseous operations.
Certificates can also be issued for other physical forms of biomethane, such as BioCNG, BioLNG, or Biomethanol, thereby extending biomethane's applicability across various sectors and enhancing its potential to decarbonize diverse industries.
The main factors in assessing the characteristics of Biomethane are the feedstocks (i.e. primary source), the support received during production (correlated with additionality), and the Carbon Intensity score. The C.I. score is a measurement given in gCO2eq/MJ of emissions of the full lifecycle of the gas. The base C.I. of Natural gas as a transport fuel in the EU is 94.1, where Biomethane has a potential to reach negative 130gCO2/MJ.
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Biomethane projects stimulate rural economies by creating jobs across the value chain, from feedstock collection to plant operations and maintenance. This not only boosts local economies but also fosters community engagement in renewable energy initiatives. Additionally, biomethane reduces landfill dependency, improving public health and environmental quality.
Europe is emerging as a global leader in biomethane production and policy development. Lessons from Europe’s biomethane initiatives can inform strategies in other regions, fostering international collaboration in renewable energy transitions. However, Europe faces competition from emerging markets in North America and Asia, which are also ramping up biomethane production. How different countries, with different registries and sustainable accounting measures will coexist in the gas markets is still up to debate. Even so, we are able to observe the success of other sustainable fuels used internationally, such as Biodiesel, under the umbrella of voluntary schemes.
Lastly, locally produced Biomethane in Europe will help reduce our dependency on imported gas, historically from Russia, and, after the war, mostly LNG from The U.S., North Africa, and The Middle East.
The EU's Renewable Energy Directive (RED II) provides a supportive policy framework for biomethane, facilitating its access to the natural gas grid and promoting cross-border trade. However, sustainability thresholds have been introduced, requiring biogas and biomethane to achieve 65%-80% greenhouse gas savings relative to fossil fuels in order to be documented as fully green. For this, the abovementioned C.I. score is used.
Moreover, the European Commission’s REPowerEU targets the production of 35 Billion Cubic Meters of biogas and biomethane annually by 2030.
Despite its promising potential, biomethane production faces several challenges, including sustainable feedstock supply, compliance with stringent sustainability criteria, and navigating regulatory complexities. Infrastructure and macro factors such as the global gas market and policy frameworks must also be taken into account in an ever-changing industry, which will eventually target to provide a fully green gas grid in Europe.
Biomethane presents a viable pathway for Europe to achieve its renewable energy targets and enhance energy security, whilst allowing companies to keep using existing technologies and systems in their day-to-day operations. Through supportive policies, strategic investments, and innovative technologies, biomethane is set to become a key pillar in Europe's sustainable energy strategy, playing an integral role in achieving both regional and corporate sustainability objectives.
At OTC Flow, we specialize in guiding companies through the complexities of renewable energy markets, including biomethane. From sourcing renewable gas certificates to ensuring alignment with your sustainability goals, we provide tailored solutions for a seamless transition. Contact our team today to explore how we can support your journey toward renewable energy integration and a greener tomorrow.