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89 new units installed in 2019 and a sector facing major regulatory changes.
718 biomethane operating units were registered in the main European countries by the end of 2019. These installations have a total biogas upgrade capacity of 682,000 Nm³/h, i.e. a maximum of 30 TWh of biomethane per year. Most of these units integrate into the national gas grids and are supplied with energy crops, organic or agricultural waste. The distribution of the units across countries is more and more uniform: large producers that have reached a certain level of development are receiving fewer subsidies and the fastest growing countries, such as France, the Netherlands and Denmark, are following in their footsteps.
Despite a minor downturn between 2016 and 2018, the sector registered higher growth in 2019 with +12% of capacity over the year. This increase is driven by countries promoting the use of local agricultural units to produce biomethane. The Italian market is developing its production by installing large-capacity organic waste treatment plants. The COVID-19 crisis could slow down the sector's development in 2020, but ongoing projects have not been cancelled and governments have taken action to limit the impact of the crisis. The first signs are encouraging, for example, in France, 62 new units have been commissioned in 2020.
Most mature countries are transitioning from feed-in tariffs to tendering systems that encourage the industry to reduce its costs and be less dependent on support mechanisms. Some countries are also ending investment subsidies which only calculate demand for biomethane through quota systems or exemptions from consumption taxes. Meanwhile, an increasing number of national registers which track biomethane production have been implemented, enabling the development of Guarantees of Origin (G.O.) markets. While several countries, including France, are revising their G.O. systems, the REGATRACE project (June 2019 – May 2022) aims to implement a centralized European system to emit and share Guarantees of Origin. It would allow the national registries to take other countries G.O. into account as of June 2020 and would be compliant with the guidelines of the RED II European directive.
For more information on the state of the biomethane market in France, find our Biomethane Observatory here.