The European biomethane market is expected to see unprecedented growth in the coming decade. Achieving the REPowerEU target of 35 bcm biomethane production in 2030 would require the sector to increase twelvefold in just 6.5 years. The prospective growth draws the attention of new investors. Common Futures conducted a market analysis of the European biomethane sector for a large international gas company, to support their investment decisions in this market.
The market study included a study of demand and supply trend expectations up to 2030 and 2050 for the EU as a whole and Germany, France, Italy and the UK in specific, as well as an analysis of regulatory developments in the EU and the four countries. In addition, Common Futures performed an industry analysis identifying the national industries’ structures, average production costs and the main competitors.
Rapid scale-up of biomethane production
The market and policy analysis showed that supply of biomethane are likely to rapidly grow until 2030, based on animal manure and agricultural residues as the main feedstocks. Further growth after 2030 would be based on sequential cropping and gasification technologies. Of the four researched countries, France is estimated to have the largest supply potential.
Strong growth in all demand segments
European demand for biomethane is expected to grow up to 2030 in all its uses, but large differences exist between countries, depending on the support schemes and policy restrictions in place. Driven by the EU-RED target of 14% renewables in transport, road transport can be expected to grow as a biomethane market to an estimated ~9 bcm in 2030. The remaining ~26 bcm is expected to be used in industry (EU-ETS), heating of buildings (national policy) and dispatchable power production (national policy).
The findings in the report were used to support investment decisions in the European market.
