Biomethane, a renewable energy source derived from organic materials, is gaining traction as a key component of Europe’s transition to sustainable energy. By replacing traditional natural gas (grey methane), biomethane enables companies to reduce their carbon footprint without requiring significant operational changes. As part of the energy transition, biomethane plays a vital role in both environmental sustainability and market adaptation, aligning with the European Union’s ambitious climate goals.

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Understanding Biomethane

Biomethane originates from organic biomass, including crops, waste, and manure, through anaerobic digestion or pyrolysis. Initially, this process produces biogas, consisting of approximately 60% methane (CH4) and 40% carbon dioxide (CO2). Traditionally, this biogas has been burned on-site for local electricity and heat generation. However, when purified, it transforms into biomethane, a renewable alternative that can be injected into the gas grid as a direct substitute for natural gas—hence the term Renewable Natural Gas (RNG). Beyond energy production, biomethane contributes to waste management and mitigates greenhouse gas emissions.

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Feedstock Types, Upgrading, and CO2 Utilization

The purification of biogas into biomethane is known as upgrading. During this process, CO2 and other impurities are removed, leaving a high-purity methane gas. The separated CO2, classified as BioCO2 due to its biological origin, has several potential applications:

• Carbon Storage: It can be injected into empty oil and gas wells for long-term storage.
• Industrial Use: It serves as a renewable alternative to grey CO2 in industries such as food and beverages.
• Synthetic Methane Production: When combined with hydrogen, it forms e-Methane (synthetic methane), further expanding the potential of renewable gas solutions.
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Sustainability and Traceability

Once biomethane enters the gas grid, it becomes physically identical to conventional natural gas. To maintain transparency and sustainability, certificates such as Guarantees of Origin (GOs) ensure traceability. These are issued by national authorities (e.g., VertiCer in the Netherlands, Energinet in Denmark) and fall under European-wide collectives like ERGaR and AIB.

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Companies can also opt for voluntary certification schemes like ISCC, ensuring compliance with regulatory frameworks such as the EU ETS, RED targets, and corporate sustainability commitments like SBTi/GHG Protocol. Beyond standard biomethane, certificates can also be issued for other renewable gas forms like BioCNG, BioLNG, and Biomethanol, broadening its application across multiple industries.

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AFS Commodities: RNG Compliance Solutions

AFS Commodities provides tailored solutions to navigate the complexities of the biomethane and RNG markets. Our RNG Compliance services ensure companies meet stringent sustainability and regulatory requirements while optimizing procurement strategies. We offer:

• Regulatory Compliance Guidance: Assisting clients in meeting evolving EU sustainability standards.
• Market Access & Procurement: Facilitating transactions through Gas Purchase Agreements (GPAs) and certificate-based sourcing.
• Carbon Credit & Offset Strategies: Helping businesses align biomethane adoption with their broader carbon reduction commitments.
• Customized Risk Management: Offering insights into pricing volatility and policy-driven market shifts.
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Economic and Geopolitical Benefits

Biomethane production supports rural economies by creating jobs in feedstock collection, plant operations, and maintenance. Additionally, it reduces reliance on landfilling, enhancing environmental and public health outcomes.
Europe has positioned itself as a global leader in biomethane development, setting the standard for sustainable gas markets. While North America and Asia are expanding their biomethane sectors, Europe’s experience in market design and regulation provides a roadmap for international adoption. Locally sourced biomethane also reduces dependence on imported fossil gas, particularly in light of geopolitical shifts affecting energy security.

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Policy Framework and Market Growth

The EU’s Renewable Energy Directive (RED II) has been instrumental in integrating biomethane into the gas grid and facilitating cross-border trade. Sustainability thresholds now require biogas and biomethane to achieve 65%-80% greenhouse gas savings to qualify as fully green alternatives. Additionally, the European Commission’s REPowerEU plan aims to scale biomethane production to 35 billion cubic meters annually by 2030.

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Transitioning to Biomethane: A Step-by-Step Approach

• Measure Current Gas Usage: Understanding current consumption is the first step in evaluating biomethane integration.
• Set Adoption Goals: Identify how much natural gas should be replaced with biomethane to align with sustainability targets.
• Engage in Market Solutions: Companies can procure biomethane via Gas Purchase Agreements (GPAs) or certificates.
• Monitor Progress: Regular tracking of emissions reductions ensures compliance and enhances credibility in sustainability reporting.
• Adapt and Evolve: As biomethane technologies and policies evolve, companies should remain agile in their strategies.
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Challenges in Biomethane Expansion

Despite its advantages, biomethane faces challenges, including securing sustainable feedstock supplies, meeting regulatory criteria, and navigating evolving policy landscapes. Infrastructure limitations and macroeconomic factors also influence market development, making continuous adaptation essential for long-term success.

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Wrapping Up

Biomethane continues to gain traction as a sustainable energy solution, providing both environmental and economic benefits. At AFS Commodities, we remain committed to supporting companies in navigating the complexities of the biomethane market, from certification and compliance to strategic procurement. Through our RNG Compliance solutions, we help businesses integrate biomethane into their energy strategies efficiently and cost-effectively. As demand grows, biomethane’s role in the global energy mix will only expand, driving the transition toward a more sustainable and resilient future.