The value of biomethane in the energy system is often underestimated in energy system studies, with a lack of appreciation for its compatibility with existing infrastructure, competitive cost of production, and its chemistry as a biological source of carbon. This study focuses on highlighting this value in two end-uses where large volumes of gaseous energy are needed: primary steel production and dispatchable power. With the projected increases in biomethane production volumes towards 2040 and beyond biomethane is an increasingly compelling option for emission abatement.
The study shows that biomethane is the most cost effective abatement option in a DRI installation producing primary steel even when hydrogen and biomethane are assumed to have the same cost. This is because biomethane is not just useful for providing process energy but also useful to provide carbon-rich feedstock, crucial for the steel making process. Similarly, biomethane is the most cost-effective fuel input in gas-fired power plants, mainly because biomethane can be stored cheaply in existing natural gas storages. The ability of biomethane to generate significant negative emissions when coupled with CCS further improves its attractiveness as an emission abatement option in the road to net-zero.
