Biomethane in the energy system
Biomethane enhances resilience and diversification
Biomethane complements the energy system as a renewable, storable and grid-compatible energy carrier. It can be produced in Europe, transported via existing infrastructure and used flexibly. In this way, biomethane supports security of supply, resilience and the diversification of the energy supply.
For Thyssengas, the coexistence of hydrogen and biomethane in future energy systems is of central importance. Whilst hydrogen is primarily intended for industrial and energy sector applications and long-term decarbonisation pathways, biomethane can be integrated via existing gas infrastructure and thus contribute immediately to reducing emissions across a wide range of sectors.
Biomethane is thus increasingly becoming an integral part of the energy transition.
In Germany, the importance of biomethane continues to grow. In addition to existing applications, the shift from power generation to feeding biomethane into the grid, as well as the green gas quota announced as part of the planned Building Modernisation Act, offer further opportunities.
With regard to the energy markets, the key challenge for the future will be to produce, market and transport biomethane at a competitive price. In terms of production, the trend in both Germany and internationally is towards larger plants, which, thanks to economies of scale, are generally able to produce more cost-effectively and are more resilient to short-term market developments within an integrated European single market.
In addition to its relevance to Germany’s energy transition, biomethane is also becoming increasingly important in a European context. Many European countries have integrated biomethane into their energy and climate strategies and are driving forward the expansion of production capacities. As a result, the importance of biomethane for European energy systems is growing. Both Europe-wide emissions trading and physical transport support system integration at European level and enable the balancing of production and demand across national borders.
In particular, the Renewable Energy Directive (RED II and RED III), the Fit for 55 package and the RePowerEU strategy set binding expansion targets and also strengthen demand for renewable gases. The target of 35 billion cubic metres (approx. 350 TWh) of biomethane production by 2030 underscores its strategic importance at European level. Green gas quotas in several European countries, as well as sector-specific targets – for example, for shipping under the FuelEU Maritime regulations – are expected to boost Europe-wide demand for biomethane in the coming years. Furthermore, CO2 pricing mechanisms such as the EU ETS are set to increase the competitiveness of biomethane relative to fossil natural gas in the long term.