1.Introduction

The European Union (EU) aims to fully decarbonise its economy, which requires a complete overhaul of the energy system and its infrastructure by 2050. The European Commission announced the European Green Deal in December 2019; this deal includes a wide variety of plans to step up climate mitigation policies. At the EU level, debate is ongoing to bring developments to reduce greenhouse gas (GHG) emissions by at least 55% by 2030 forward. Raising the ambitions of EU climate policy will require significant investment in energy efficiency, renewable energy, new low-carbon technologies, and grid infrastructure. It will also necessitate the close integration of the electricity and gas sectors and their respective infrastructures. A decarbonised Europe will be based on an interplay between the production of renewable electricity and renewable and low-carbon gases to transport, store, and supply all sectors with renewable energy at the lowest possible costs.

In a series of reports over the past few years, the Gas for Climate consortium has showed that renewable and low-carbon gases have an important role to play in the EU energy system and that existing gas infrastructure and knowledge can support the transition to an energy system with net-zero CO₂ emissions at the lowest societal cost.³ The Gas for Climate vision and pathways² towards 2050 cover all energy-intensive economic sectors and demonstrate that renewable electricity and renewable and low-carbon gases play a crucial role in achieving Europe’s climate ambitions for 2030 and 2050 (see Box 1). The pathway analysis also demonstrated that current policies and trends are not yet sufficient to realise that ambition. Policy and market action are required to speed up the transition, and progress of necessary developments must be closely monitored to ensure the transition is done at the lowest societal costs.

Renewable and low-carbon hydrogen and biomethane developments attract a lot of positive attention in the media, both in discussions of new policies and in company strategies. However, a single comprehensive overview of the current market state of deployment and of trends towards further scale-up and cost reductions is missing. This report aims to fill this gap by providing an overview to policymakers, energy users and producers, equipment manufacturers, and infrastructure companies. It is the first in a series that aims to provide insight into the current state and trends of renewable gases.

The authors would like to thank the European Biogas Association (EBA) for its extensive insight into the latest biogas and biomethane statistics in Europe. This report also builds on important data retrieved from the Fuel Cells and Hydrogen Joint Undertaking (FCH JU), the Fuel Cell and Hydrogen Observatory (FCHO), and the European Alternative Fuels Observatory (EAFO).

Key trends in renewable and low-carbon gas development

The Gas for Climate Decarbonisation Pathways 2020-2050 study developed a timeline of required developments for biomethane and green and blue hydrogen along the supply chain to achieve a 2050 decarbonised energy system in Europe.² This report looks at the current market state and trends of biomethane and green and blue hydrogen supply, demand, and infrastructure in Europe, and identifies key trends along the supply chain. The following chapters detail each key trend and analyse the status of each key trend towards achieving the critical decarbonisation timeline in the early 2020s-2030:

→ Green: Trend is in line with required pathway developments.

→ Blue: Emerging trend is developing.

→ Yellow: Early developments, no trend yet.

While the transformation towards net-zero CO₂ emissions is multifaceted and consists of many interlinked market and technological developments, the main focus of the analysis is on key trends in those sectors and subsectors that are most promising in the early 2020s-2030, as identified in the pathways study.

This report is structured in three chapters that analyse the market state and trends of biomethane and green and blue hydrogen supply (chapter 2), end uses in selected demand sectors and subsectors (chapter 3), and infrastructure developments (chapter 4). Each chapter includes several identified key trends, supported by collected and combined factual and statistical information, subtrends, and showcase projects around Europe. The focus of the key trends are the 27 EU member states (EU27) in 2018-2019. However, the employed data sources often differ in geographical scope and time of publication, which results in some trends being provided on a wider European level or other years, as indicated.

Showcase projects illustrate trends

The key trends in this report are supported by project examples. These projects were selected based on ongoing developments in the EU27 and, where applicable, more broadly across Europe. These projects reflect the latest developments in the field and are in concrete development or operation. More exhaustive lists of projects can be found in the European Biomethane Map (GIE and EBA, 2020), the International Energy Agency’s (IEA’s) Hydrogen Projects Database (IEA, 2020), the Hydrogen Europe project database (Hydrogen Europe, 2020b) and Clean Hydrogen Monitor 2020 (Hydrogen Europe, 2020a), the Fuel Cells and Hydrogen Joint Undertaking project database (Fuel Cells and Hydrogen Joint Undertaking, 2020a), and the European Network of Transmission System Operators for Gas’ (ENTSOG’s) Innovative Projects Platform (ENTSOG, 2020).

Box 1. Gas for Climate

In June 2017, a group of European gas transmission system operators (TSOs) and biogas associations convened to explore the future role and value of gas and gas infrastructure in a fully integrated and decarbonised EU energy system. This group became the Gas for Climate initiative. Gas for Climate is committed to achieving net-zero GHG emissions in the EU by 2050, mainly through renewable energy. The group sees an important role for existing gas infrastructure to the transport, storage, and distribution of biomethane and hydrogen in a smart combination with a large increase of renewable electricity. The group consists of 10 TSOs (Enagás, Energinet, Fluxys Belgium, Gasunie, GRTgaz, ONTRAS, OGE, Snam, Swedegas, and Teréga) and two biomethane associations (European Biogas Association and Consorzio Italiano Biogas). Members are based in eight EU member states.

In April 2020, Gas for Climate launched the Gas Decarbonisation Pathways 2020-2050 study, analysing the transition towards the lowest cost climateneutral system by 2050. This study developed gas decarbonisation pathways from 2020 to 2050, and identified what investments and actions are needed across the energy system along the way. The central pathway in this study achieves the 2050 Optimised Gas end state, as first analysed in the Gas for Climate 2019 study “the optimal role for gas in a net-zero emissions energy system”.

The Gas Decarbonisation Pathways 2020-2050 study highlights that additional EU climate and energy policies are needed to position Europe on the road to net-zero by 2050. Its central and aspirational Accelerated Decarbonisation Pathway examines which investments and innovations need to take place to achieve a  2030 GHG reduction target of 55% and climate neutrality by 2050. The European Green Deal can facilitate these developments, accelerating emissions  reductions, creating sustainable EU jobs, and creating first-mover advantages for EU industry by:

→ Adapting the EU policy framework to make gas infrastructure future-proof in an integrated energy system and a key asset for the sustainable and cost-efficient decarbonisation of the EU economy.

→ Stimulating the supply of biomethane and hydrogen through a binding mandate for 10% gas from renewable sources by 2030.

→ Fostering cross-border trade and transport of hydrogen and biomethane and clarifying market rules for green and blue hydrogen including for hydrogen transport.

→ Incentivising demand for hydrogen and biomethane in EU industry and producing dispatchable electricity by strengthening and broadening the EU emissions trading system (ETS) with targeted and time-bound contracts for difference.

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