56 Biogas Spotlight
Setting up a European Green Gas Market –
Challenges and Opportunities
Biomethane is a 100% renewable gas which can be used for the same purposes as natural gas in transport, electricity and heating. Thanks to its chemical composition and energy content similar to natural gas, biomethane can be injected into the natural gas grid and thus substitute part of the fossil gas. Its full deployment in Europe is hampered mainly by the lack of cross-border cooperation and the insufficient incentives within national borders. Recently, first progress in enabling international trading and harmonising technical standards has been made at the European level.
Biogas has a large untapped potential due to its high substrate flexibility, it can be blended with natural gas at any proportion (or used in its pure form), and it can
significantly reduce CO2 emissions: when a vehicle is fuelled with waste-based biomethane, it reduces greenhouse gas emissions even by 97% compared to diesel or petrol powered vehicles.
Biomethane is an upgraded form of biogas which can be sourced from organic waste, energy crops, sewage sludge and agricultural residues. Biomethane is thus a green gas, 100% renewable. Its chemical composition and energy content are comparable to natural gas allowing to use it in the same appliances as the fossil gas including vehicle fuel and injection into the gas grid. It can be blended with natural gas at any ratio. The green gas provides Europe with several advantages: it contributes to the European climate targets by
reduced CO2 emissions and improved air quality, and increases security of supply and makes Europe more energy independent from import of fossil fuels.
Currently biomethane is produced in 15 European countries1 injected into the natural gas grid in most of them2
and . Altogether there
are over 200 plants in Europe which produce biomethane for three sectors: electricity, heat and transport. Particularly Sweden has tapped into the potential of biomethane as a renewable transport fuel: half of the produced biogas in Sweden is upgraded and used as a vehicle fuel.
Thanks to the mature technology and the existing natural gas infrastructure, biomethane is a commercially viable energy source in most parts of Europe but its full potential has not been exploited due to the lack of cross-border cooperation and the insufficient financial incentives within national borders which hamper the full deployment. The current support schemes that have been set up for renewable energies around Europe tend to be limited to green electricity while green gas is mostly left outside the schemes. The biomethane feed-in tariffs in the UK and France represent positive exceptions. In general, however, under the current market conditions, biomethane cannot compete against natural gas in sales price in most European countries as long as CO2 certificats are traded at such low levels.
The biomethane market is promoted for example by the Intelligent Energy Europe (IEE) project GreenGasGrids3
which brings together
stakeholders from both national and international levels such as European Biogas Association. The three-year-project works on the
most pressing issues of the biomethane market development regarding sustainability, technical standards, trade, and policy targets.
Trading biomethane over the country borders in Europe
The only cross border trading transactions of biomethane that so far were reported (from Germany to Switzerland, Sweden and the Netherlands) have been carried out under bilateral agreements between the participating companies without involving any government authorised certification organisations.
As in the case of renewable electricity, also renewable gas needs declaration, tracking, labelling and trading systems to increase the share of renewable energy source and to create market confidence. These instruments provide reliable information on the source of primary energy (declaration), on its flow (tracking), on other characteristics (labelling), and they allow it to be traded (trading). The next paragraphs will take a look at such systems established for the biomethane market.
In fact, only one biomethane labelling scheme exists so far, namely “naturemade star biomethane” in Switzerland. Additionally, in Sweden biomethane is sold at several filling stations under the Nordic Ecolabel (SWAN) which covers 63 different products and is thus not dedicated to the specific requirements of biomethane.
As regards declaration, tracking and trading, the project GreenGasGrids has studied the feasibility of introducing such systems at the EU level. The national biomethane registries that have been established in Austria (Biomethan Register), Denmark (Energinet), Germany (Biogasregister), the Netherlands (Vertogas), Switzerland (VSG) and the United Kingdom (Green Gas Certification Scheme) guarantee the origin of biomethane as for renewable origin, parameters of producing technology etc. Also basically all the
Author Details: Susanna Litmanen, Policy Advisor
European Biogas Association – EBA
www.european-biogas.eu www.greengasgrids.eu
1AT, CH, DE, DK, ES, FI, FR, HU, IS, IT, LU, NL, NO, SE, UK, 2
3www.greengasgrids.eu, 4
IET Annual Buyers’ Guide 2013
www.envirotech-online.com AT, CH, DE, ES, FI, FR, LU, NL, NO, UK
http://www.greengastrading.co.uk/
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