€18b Set to Boost Biomethane Production

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by KnowESG
KnowESG_Biomethane production
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The 1st EBA Investment Outlook on Biomethane reveals an encouraging trajectory for the industry. Industry leaders have committed an initial sum of €18 billion, earmarked for the period up to 2030, to facilitate the expansion of biomethane production.

This investment not only bolsters Europe's energy security but also supports the continent's climate mitigation objectives. Furthermore, these investments unlock a host of additional societal benefits, estimated to be worth up to €7.9 billion per year.

However, to ensure the successful implementation of these plans, it is crucial to establish well-aligned policies, stable framework conditions, and long-term pathways for end-use.

In light of the REPowerEU target announced a year ago, the European Biogas Association (EBA) has estimated that achieving 35 billion cubic meters (bcm) of sustainable biomethane production by 2030 will require a substantial investment effort totalling €83 billion.

These investments will depend on factors such as plant size, location, and the type of sustainable feedstock employed. The recently published EBA Investment Outlook on Biomethane indicates that progress is underway, with €4.1 billion set to be invested in the next two years, €12.4 billion by 2030, and an additional €1 billion allocated without a specific timeframe.

France (€1.4 billion) and Italy (€1.1 billion) emerge as the leading investment destinations due to favourable conditions in these Member States. Following them closely are the Netherlands (€951 million), Spain (€948 million), Germany (€658 million), Sweden (€635 million), and Poland (€429 million). Moreover, €5.5 billion of the capital injection will remain within the EU, with the final destination yet to be determined, while €3.3 billion will target non-EU territories, including the UK and Ukraine.

Aligning the EU Taxonomy with the REPowerEU objectives for biomethane will guide capital flows into the sector as investors emphasise compliance with specific EU regulations on sustainable finance as a crucial factor in driving green investments. The establishment of a harmonised EU-wide cross-border trading system is also of significant importance, particularly for unsubsidised projects.

Most business plans analysed incorporate the use of biogenic CO2 as a replacement for products derived from fossil-based CO2. However, the true value of biogenic CO2 in offsetting emissions from fossil fuels is often underestimated, necessitating a fair assessment. One notable application of biogenic CO2 is its usage in the production of green synthetic methane, which can contribute substantial volumes of sustainable green gas to the energy system.

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Source: EBA

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