Some of the key takeaways from the report “Biomethane in Europe: Why scaling up is harder than it looks” published by the Oxford Institute for Energy Studies are:
•European biogas and biomethane production has experienced robust growth but remains dependent on policy support. Production increased by 34 per cent between 2015 and 2024, reaching 232 TWh or 22 Bcm, with Europe now accounting for nearly half of all global output. However, biomethane continues to face a persistent cost disadvantage relative to natural gas, with limited evidence of production cost reductions since the 2010s. Lower natural gas prices risk widening this gap still further, increasing pressure on support schemes and constraining market-based uptake.
• The EU is unlikely to meet the REPowerEU biomethane ambition, signalling a subtle recalibration of gas decarbonisation expectations. Member States’ plans indicate a substantial shortfall – of around 20-23 Bcm – relative to the non-binding 35 Bcm target. The EU Commission webpage refers to the need for EU biomethane production to reach 35 Bcm “either as biogas or its upgraded version”. While this could be interpreted as a dilution of the original REPowerEU ambition, it may also signal a broader reassessment of the role of biogas and biomethane within the EU’s decarbonisation strategy.
• This contrasts with prevailing market optimism about biomethane growth, especially in transport. Member States increasingly rely on demand-side instruments, such as transport quota obligations, to meet their renewable energy targets.
•A distinctive feature of the biomethane debate is that, although there is broad consensus on the need to expand production, there is far less agreement on the scale of expansion, the mechanisms through which it should be achieved, and where biogases should be deployed.
•The EU’s regulatory framework does not explicitly impose a single pathway, but instead allows these models to coexist. In practice, this produces tensions and uneven implementation, thereby increasing uncertainty and risk for market actors, undermining biomethane’s attractiveness for developers and off-takers, and ultimately constraining growth.
• Resolving these tensions will be critical in determining the EU’s ability to scale up biomethane and integrate it effectively into the European gas market, thereby shaping the regulatory framework and its practical implementation.
Access the report here