What is biomethane?

Biomethane is a combustible gas produced by the fermentation of biomass. Widely present in different types of waste, including urban garbage, agricultural waste, food waste, and sludge generated by sewage treatment plants. The chemical formula for biomethane is CH4, which is colorless, odorless, and has a high calorific value. It is widely believed to have great development prospects.

Production mode

The main production method of biomethane is through biomass fermentation. This fermentation reaction is an anaerobic fermentation that needs to be carried out under anaerobic conditions. During the fermentation process, microorganisms will metabolize organic matter into biomethane. In waste, there is a large amount of biomass, which can be converted into biomethane through special production processes to obtain an economical, environmentally friendly and sustainable energy source.

The principle of biomethane production is also very simple.

• The first step is water dissolution, which involves the interaction between water and chemicals, leading to their decomposition.

• The second step is acidification, where the decomposed water undergoes chemical changes upon absorbing carbon dioxide to form methane.

• The third step is refining, where organic matter from plants or animals can be converted into biogas through methane refining.

Uses and Applications of Biomethane

Due to the similarity in composition and energy between biogenic methane and fossil natural gas, it can be used for the same purposes:

1. Natural gas substitute: It can be injected into the natural gas pipeline network to replace natural gas (which can be mixed with natural gas in any proportion) and transported to residents and industries for use. This can fully utilize the existing infrastructure.
2. Power generation and heating: After biogas combustion, it can generate both electricity and heat. In this case, biogas is generally directly utilized without the need for purification into biogas.
3. Power vehicles: In fact, using biomethane as an advanced renewable biofuel can improve air quality because it emits fewer greenhouse gases. To some extent, it has become an important ally in the energy transition as a renewable fuel. For example, the use of compressed natural gas or CNG is increasing in urban bus fleets.
4. Raw materials: used as raw materials, such as for producing renewable hydrogen.
5. Creating employment opportunities: The production of biomethane promotes further development in rural areas and increases employment opportunities related to agriculture and animal husbandry. It also contributes to the sustainable development of agriculture and animal husbandry, as its self-sufficiency contributes to the decarbonization of the industry.
6. Promote circular economy: because it can effectively manage and utilize organic waste, as the obtained digestate can be returned to the fields as fertilizer.
7. Waste utilization: Finally, utilizing waste to produce local energy can contribute to the REPowerEU program, which aims to reduce energy dependence in Europe.

Progress has been made in the exploration and utilization of biomethane in multiple countries

At present, some progress has been made in the exploration and utilization of biomethane in many countries and regions around the world. In North America, policy incentives have led to a significant increase in the number of biomethane development projects from 162 in 2020 to nearly 500 by 2024, with 70% of the production using urban waste as raw material. In the European region, after geopolitical conflicts occurred, the Renewable Energy Plan “REPowerEU” was used as an opportunity to accelerate the development of renewable energy. Methane production in 2023 increased by about 35% compared to 2022, and raw materials were sourced from agricultural waste such as livestock manure and crop waste.

According to energy consulting firm Wood Mackenzie, global production of biomethane is expected to significantly increase to 74 billion cubic meters by 2050, accounting for approximately 2% of total natural gas demand or 10% of global liquefied natural gas (LNG) demand.

The United States has significantly expanded policy support for biomethane and related industries in the Inflation Reduction Act, and plans to significantly increase biomethane production from 4.7 billion cubic meters in 2023 to 37.6 billion cubic meters in 2050, thereby increasing the proportion of biomethane in natural gas consumption in the United States from 0.4% to 4.3%.

The UK and Denmark also plan to gradually increase their production of biomethane from 900 million cubic meters and 700 million cubic meters in 2023 to 2.4 billion cubic meters and 1.4 billion cubic meters in 2050, respectively. According to data from the European Biogas Association (EBA), the global biogas market is expected to achieve a compound annual growth rate of 6.7% from 2023 to 2028, based on a market size of 1.634 billion US dollars in 2023.

The European biomethane market continues to attract profits

The European Biogas Association recently released a market statistics report (hereinafter referred to as the “report”) stating that in 2023, the production of biogas and biomethane in Europe has continued to rise for several years, and currently basically reaches the total natural gas demand of Belgium, Denmark, and Ireland, accounting for about 7% of the total natural gas demand in 2023.

In recent years, Europe, which is highly dependent on imported natural gas, has been seeking alternative energy supply solutions, and the market for biomethane, which has relatively low-carbon characteristics, has been increasingly popular. However, in the eyes of industry insiders, although the production capacity of biogas and biomethane continues to expand, the growth rate is still insufficient to meet the local natural gas demand in Europe, making it difficult to become an effective support for reducing Europe’s energy dependence on foreign countries.

The production of biomethane in Europe has reached 4.9 billion cubic meters; As of the first quarter of this year, the production capacity of biomethane in Europe has reached 6.4 billion cubic meters. Within EU member states, the production of biomethane is showing a rapid upward trend, with a year-on-year increase of 21%. From the perspective of terminal consumption, in 2023, the consumption of biomethane in Europe will mainly be concentrated in high energy consuming areas such as transportation, construction, power generation, and industry. Among them, the proportion of biomethane consumption in the transportation sector will reach 23%, while about 15% will be used in the power generation sector. According to calculations, based on current trends, Europe can reduce approximately 106 million tons of carbon dioxide emissions annually by using biomethane, providing renewable energy for around 19 million European households and alternative fuel for approximately 530000 liquefied natural gas (LNG) trucks.

Against the backdrop of strengthening support for biogas and biomethane in various countries, the European Biogas Association believes that this industry will continue to attract investment. It is expected that in the next six years, this industry in Europe will receive an annual investment of 25 billion euros, and by 2030, the annual economic output is expected to reach over 12 billion euros.

Preventing greenhouse gas emissions

Biogas and biomethane can prevent emissions throughout the entire value chain and have a triple emission reduction effect. Firstly, they avoid naturally occurring emissions: organic residues are brought into the controlled environment of the biogas plant, preventing emissions from organic matter decomposition from being released into the atmosphere. Secondly, the generated biogas and biomethane have replaced fossil fuels as energy sources. Thirdly, using the digestate obtained from biogas production as a bio fertilizer helps to return organic carbon to the soil and reduce the demand for carbon intensive mineral fertilizer production.

Renewable thermal energy and electricity

Combined heat and power (CHP) is a common way to increase the value of biogas in Europe. The concept behind CHP is that the combined production of electricity and heat is more efficient than producing them separately. According to the design of the biogas plant, some of the heat generated by CHP can be used to support the fermentation process of the plant – for example, if the biogas reactor requires heat to maintain the correct temperature. The generated electricity is mainly transmitted to the power grid, while any remaining heat can be used for local heating.

Clean transportation

The latest research shows that biomethane is an effective method to reduce greenhouse gas emissions from transportation, which accounts for 25% of the total emissions in the European Union. [1] Biomethane is used as a biofuel in the form of CNG or LNG substitutes, known as bioCNG or bioLNG. If we consider the entire carbon footprint of vehicles (from oil wells to wheels), biomethane performs well in reducing greenhouse gas emissions in transportation. Depending on the different raw materials used, biomethane can even produce negative emissions, which means that carbon dioxide is actually removed from the atmosphere. Liquefied biomethane can be used in heavy road transportation and maritime industries, both of which are difficult to electrify.

Waste recovery

Biogas and biomethane are produced from different types of organic residues, converting waste into valuable resources, which is the core principle of efficient circular economy. We can recycle food waste or wastewater from cities and use it to produce renewable energy, which helps develop the local bioeconomy. In rural areas, residues from animal husbandry or agricultural biomass can be optimized and converted into energy, while digestates can be used as organic fertilizers. This creates additional business models for the agricultural sector, making it more cost competitive and promoting sustainable agriculture.

Close the carbon cycle

Carbon dioxide is a byproduct of biogas purification into biomethane. Carbon dioxide flow can add value in the food industry and can also be used to maximize the photosynthetic potential of greenhouses. This is the final step of the so-called ‘short carbon cycle’, which begins with using carbon from organic residues to produce biogas, which is partially composed of carbon molecules. The ‘short carbon cycle’ continues to reuse carbon in digestates: using digestates as organic fertilizers to sow and putting carbon back into the soil. After producing biomethane, the entire carbon cycle is completed by adding carbon dioxide to ensure the removal of carbon from the atmosphere.

EU, EU Agricultural Renewable Energy EPRS | European Parliament Research Service

Eurostat – SHARES (Renewable Energy)

Panagos et al. evaluated the beneficial effects of covering crops in preventing soil erosion. They concluded that expanding crop coverage to 35% of arable land in Europe would reduce soil erosion risk by 40%.

Navigant estimates that with continuous crop cultivation, the production of biomethane in Europe could reach 41 billion cubic meters.

Upgrading biogas to biomethane may be the main source of future growth

Currently, there is approximately 18 gigawatts of biogas power installed capacity worldwide, with the majority located in Germany, the United States, and the United Kingdom. Between 2010 and 2018, the average annual growth rate of power generation capacity was 4%. In recent years, the deployment of the United States and some European countries has slowed down, mainly because of changes in policy support. However, growth in other markets such as China and Türkiye has begun to pick up.

The levelized cost of biogas power generation varies depending on the raw materials used and the complexity of the factory, ranging from $50 per megawatt hour (MWh) to $190 per MWh. A significant portion of this range is higher than the cost of wind and utility scale solar photovoltaic (PV) power generation, which has significantly decreased in recent years.

The relatively high cost of biogas power generation means that many countries’ transition from grid connected electricity prices to technology neutral renewable electricity auction frameworks (such as power purchase agreements) may limit the future prospects of biogas plants that only generate electricity. However, unlike wind and solar photovoltaics, biogas plants can operate flexibly to provide balance and other auxiliary services for the power grid. Recognizing the value of these services will help stimulate the future deployment prospects of biogas plants.