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All about Biomethane Certificates

Written by

Proadpran B. Piccini

Gas Analyst

MSc in Environment Management from University of Oxford, UK. Specialist in renewable energy. Previously worked at Norwegian Business School BI. At present, studying at a doctoral level (PhD) with the research topic related to the power industry, alongside working at veyt.

Biomethane Certificates in Europe
Overview of the biomethane certificates and markets in Europe

The biomethane market in Europe has experienced a rapid growth in recent years. In 2021, European biomethane production reached 37 TWh, an increase of around 20% from the previous year. Even though an increasing interest in cross border trade of the associated biomethane certificates/GOs has been observed, international trade is still limited to less than 20% of biomethane production.

Please note: biomethane certificates are often referred to as biomethane GOs (Guarantees of Origin).

Let us kick-off with the main question:

What is Biomethane (BM)?

Biomethane is natural gas produced from biomass used in the gas distribution infrastructure, end-user equipment and natural gas vehicles.

Common terms for biomethane include green gas, natural biogas, renewable gas, or renewable natural gas.

Biomethane can be produced via three different routes:

  1. Upgrading biogas from anaerobic digestion (AD) - most common (90% of all biomethane in Europe)
  2. Thermal gasification of biomass (Bio-SNG - Bio Synthetic Natural Gas)
  3. Power-to-Gas using fuel from renewable hydrogen and carbon dioxide

A schematic of the first (AD) route showing inputs and outputs is below:

Why are Biomethane Certificates important?

When injecting biomethane in the gas network, this green gas and natural gas are mixed together in a common gas network and then become indistinguishable.

Biomethane certificates/GOs are a method of assigning green attributes to biomethane, allowing customers to ensure their gas consumption is sustainably produced. In addition, it gives biomethane producers a way of obtaining an extra income to support their operations.

Generally, the European biomethane certificates are valid for one year except for UK RGGOs (Renewable Gas Guarantees of Origin) where validation lasts for three years three months.

Providing that the countries have green gas issuing bodies, biomethane certificates/GO are issued to the owners of the biogas plants that upgrade their biogas to biomethane.

Biomethane Certificate Trading

In Europe, biomethane certificates/GOs can be either sold directly to a consumer, or transferred to a third party to conduct a further sale.

Domestic and international trading of biomethane certificates

Green gas certificates can be traded domestically and internationally. There is a growing interest in cross border trade, particularly in the voluntary market. However, the pan-European cross border trade is still limited.

The countries with observed biomethane certificate cross border trading are:

  • Austria
  • Demark, Germany and the UK: major exporters
  • The Netherlands
  • Sweden and Switzerland: major importers

Certificates predominantly transacted domestically:

  • France
  • Italy

Biomethane Certificate Price

Biomethane certificate prices vary from country to country, depending on many factors such as subsidies from the government and feedstocks used to produce biomethane, etc.

Indicative price ranges of BM certificates from Greenfact’s database and market sources (late-2022):

  • France: 5 – 10 EUR/MWh
  • UK: 15 – 30 GBP/MWh
  • Denmark and the Netherlands: 20 – 50 EUR/MWh
  • Germany: 40 – 70 EUR/MWh
  • Switzerland: 70 – 100 EUR/MWh

Overarching Policy for Biomethane Certificate Trading

The EU Renewable Energy Directive (REDII)

Article 19: Guarantees of origin (GO) for energy from renewable sources

RED II has extended the scope of Guarantees of Origin to cover renewable gas since December 2018.

The article aims to provide reliable proof of the origin of renewable gas to final energy consumers, as well as to facilitate greater cross-border trade for green gases. Further, REDII requires the member states to establish:

  • Appropriate trustworthy systems to handle Guarantees of Origin and transactions
  • National designated bodies to operate and impose regulations on the GO system

Article 25: Greenhouse gas intensity reduction in the transport sector from the use of renewable energy

The proposed “fit for 55” (July 14, 2021) suggests an increase in the share of advanced biofuels and biogas, produced from the feedstocks, such as waste and manure, (for full list: Part A of Annex IX ) in the energy supplied to the transport sector.

The new proposal suggests the share shall develop as follows:

Share of advanced biofuels and biogas in the transport sector EC

National Biomethane Registries

Currently, the establishment of national biomethane registries is not directly required in the European legislation; therefore, existing registries are handled either through national legislation or on a voluntary basis.

In the case of countries without national legislation for registries, voluntary registries may be implemented.

List of the European biomethane registries:

Summing up

The European biomethane certificate market is a fragmented market, and the certificate price is volatile. To be on top of this market could bring significant opportunities to the business. Greenfact is a leading analytic company in the biomethane certificate market, providing analysis in pricing, market trends and policy updates.

Benchmark for Guarantees of Origin (GO) prices and insights

A platform with real-time GO data and insights, reporting prices and market fundamentals for Wind, Hydro, Solar, Biomass, Biomethane and RGGOs.

EAC Market Report - In The Midst Of A Bullish Wave
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