EBA Investment Outlook on Biomethane

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€18 Billion Investments Allocated to Boost Biomethane Production in Europe, Reveals 1st EBA Investment Outlook

The 1st EBA Investment Outlook on Biomethane, launched today, unveils the industry’s commitme…

In a bid to bolster Europe’s energy security and address climate change goals, the European biomethane industry has pledged to invest a significant sum of €18 billion in the coming years for scaling up biomethane production. The 1st EBA Investment Outlook on Biomethane, launched today, unveils the industry’s commitment to supporting the region’s ambitious energy and climate mitigation targets. Moreover, these investments are projected to generate whole-system benefits worth up to €7.9 billion annually for society. However, ensuring a stable regulatory framework and conducive policies is deemed crucial to secure the intended capital injection.

The investment outlook report indicates that €4.1 billion will be channeled into the sector over the next two years, with a further €12.4 billion earmarked for investment by 2030. Additionally, an extra €1 billion has been allocated, although no specific timeframe has been set for this fund.

The EBA’s estimation is based on the REPowerEU target, which was announced a year ago. The target aims to achieve 35 billion cubic meters of sustainable biomethane production by 2030. Reaching this goal would require a total investment of €83 billion, taking into account factors such as plant size, location, and the type of sustainable feedstock used. “The first edition of the EBA Investment Outlook on Biomethane reflects the progress made so far: €4.1 billion is set to be invested in the next two years, with an additional €12.4 billion committed by 2030, and an extra €1 billion without a specified timeline. The EBA intends to continually update this outlook as investments continue to increase,” explained Mieke Decorte, EBA’s Technical and Project Manager.

France and Italy emerge as the primary destinations for these investments, with €1.4 billion and €1.1 billion allocated, respectively, largely due to favorable conditions in these member states. The Netherlands, Spain, Germany, Sweden, and Poland follow, with investments ranging from €429 million to €951 million. Additionally, approximately €5.5 billion will be invested within the EU, while €3.3 billion will be directed towards non-EU territories, including the UK and Ukraine.

To channel capital effectively into the biomethane sector, investors emphasize the importance of aligning the EU Taxonomy with the REPowerEU objectives. Compliance with specific EU regulations on sustainable finance is seen as a critical factor in leveraging green investments. Furthermore, a harmonized EU-wide cross-border trading system is deemed essential, particularly for projects that operate without subsidies.

The report highlights the use of biogenic CO2 to replace products derived from fossil origin CO2, a feature present in the majority of business plans assessed. However, the report also underscores that the value of biogenic CO2 in offsetting fossil-origin CO2 is frequently underestimated, and efforts should be made to assess its true worth. Among the notable uses of biogenic CO2 is the production of green synthetic methane, which utilizes green hydrogen and can significantly contribute to the availability of sustainable green gas within the energy system.