Report

Biomethane: market growing despite difficult conditions

Feed-in volume up by 15 per cent in 2015 / Mood in industry subdued / dena calls for quota for advanced biofuels from 2018

biogaspartner Annual Conference: dena’s Managing Director, Andreas Kuhlmann presents the Biomethane Industry Barometer. Photo: Deutsche Energie-Agentur (dena) – German Energy Agency / Pedro Becerra Picture: Deutsche Energie-Agentur (dena) / Pedro Becerra

Biomethane in the electricity, heating and transport sectors

In 2015 the highest proportion of biomethane was used in combined heat and power generation plants. In the transport sector, low quota prices and high marketing expenditure led to a fall in sales. As the industry barometer shows, the biomethane market responds flexibly to these kinds of fluctuations in demand: the decline in the transport sector was offset by increased use in combined heat and power generation plants. In the heating sector, biomethane’s contribution to production from renewable energies was the highest at 2.7 per cent. In the transport sector it was the lowest at 1.1 per cent. About 1.7 per cent of renewable electricity was generated from biomethane. In all, the use of biomethane reduced CO2 emissions by 3.2 million tonnes.

Since remuneration for biomethane under the 2014 Renewable Energy Sources Act was cut by around 40 per cent, and also because the planned tenders for biomass from 2017 do not raise expectations of any significant additional plant construction, the share of biomethane in the electricity and heating sectors will not increase in the short term.

Market potential in heavy goods transport and shipping

In the transport sector, in which the proportion of biomethane to natural gas has been around 20 per cent in the last two years, biomethane companies see opportunities in heavy goods transport and shipping. Biomethane and, increasingly in the future, liquefied biomethane (or liquefied biogas, LBG), can counteract the increasing CO2 emissions from heavy goods traffic, as well as the problem of particulates.

‘Particularly in transport, we must use every option to minimise emissions – not only CO2, but also oxides of nitrogen and particulate matter. Biomethane is an attractive option for this,’ says Kuhlmann. ‘The conditions are good, because the European Commission is obliging its member states to set a target for advanced biofuels by April 2017. The potential for biomethane from residual or waste products alone is sufficient to meet the EU’s target of a 0.5 per cent blending in fuels by 2020.’

Prospects for 2016: continued growth

At the end of October 2016, 194 feed-in plants were in operation, meaning that a further increase in production to around 9.4 terawatt hours is expected for 2016. Despite difficult conditions, surveys among market players indicate a continuation of the growth trend in the year ahead as well.
Even the cross-border trade in biomethane is making progress. Biomethane is currently being fed into the natural gas networks of 15 European countries. This is bringing about new opportunities for plant constructors and project developers. In the UK and Denmark, for example, conditions for feeding-in biomethane have been improved.

About the Biogas Partnership and the industry barometer

dena chairs the Biogas Partnership, and provides its members from agriculture, plant construction, the energy industry and science with a platform for acquiring and processing information, and disseminating it nationally and internationally. Since 2012 dena has been developing the industry barometer on a yearly basis – monitoring in depth the market development of biomethane, including trends, facts and the mood in the industry.

Further information on the Biogas Partnership can be found at www.biogaspartner.de.