Biomethane in Emissions Trading

The EU ETS (European Union Emissions Trading System) has been in place since 2005 and is one of the most important instruments for reducing greenhouse gases. Energy-intensive industrial sectors (including oil refineries, steelworks and the production of iron, aluminum, metals, cement, lime, glass, ceramics, pulp, paper, cardboard, acids and organic bulk chemicals) are subject to the EU ETS. Around 10,000 installations are currently covered by the EU ETS. The EU ETS follows a cap-and-trade approach. The trading system has an emissions cap. This cap is successively reduced over the years. If a plant operator saves more emissions than required, it can trade the additional emission savings with other operators in the form of certificates (“trade”).

Biomethane can be counted towards the ETS in accordance with the rules of the EU ETS if the provisions applicable to biomethane are complied with. The responsible authority, the German Emissions Trading Authority DEHSt, has provided specific details of the evidence to be submitted in its guidelines:

• “For the deduction of emissions from the combustion of biomethane from the natural gas grid, compliance with the RED II criteria must be demonstrated by means of proof from the Nabisy database.” (DEHSt guidelines, p. 83)
• Biomethane from abroad must also meet the RED II criteria when used for energy purposes. Therefore, a valid sustainability certificate in accordance with § 3 (1) EHV from the Nabisy database must also be provided for imported biomethane." (Guideline DEHSt, p. 83)

The material use of biomethane can also be credited by canceling a guarantee of origin.

Source: Guideline for the Preparation of Monitoring Plans and Emission Reports for Stationary Installations (DEHSt), Chapter 8.5, p. 82 (Biomethane from the Natural Gas Grid)

The BEHG was adopted in 2019 as part of the German government's climate package. It covers emissions that are not included in the EU ETS. The BEHG requires all distributors of fuels and combustibles to purchase CO₂ certificates. The cost of a CO₂ certificate is currently 25 EUR/tCO₂, increasing to 55 EUR/tCO₂ from 2025, and from 2026 onwards, the certificates will be auctioned. The energy content of biomethane is assessed with an emission factor of zero.

For more detailed information on the BEHG, please visit the website of the German Emissions Trading Authority (DEHSt).

Source: Guide on Scope, Monitoring, and Reporting of CO₂ Emissions (Chapter 6.6.2.3, p. 54: Verification of Biomethane Recognition from Natural Gas Grids)