2.1.5 Increasing cross-border trade
Each country in Europe has several different players in the biomethane sector.36 However, the market for the large industrial production of biomethane (1,000 m3/hr and above) is more consolidated with a few main players, including:36 Nature Energy (seven plants in Denmark), Gasum (six plants in Sweden), VERBIO Vereinigte BioEnergie AG (three plants in Germany only), and E.ON (three plants in Germany/Sweden). Only a small number of farmer associations are involved in these large projects. Recycling and other waste management companies are increasingly involved due to the use of waste streams as feedstock for biomethane.
For agricultural plants using agricultural residues, manure, or plant residues, there is a large spread of players ranging from a single farmer or farmer cooperative to non-farm or non-biogas-specific organisations.36 In many instances, specific entities are owned by more than one company or farmer. In the majority of agricultural biomethane projects,atleastonefarmerorfarmercooperative is involved and that farmer/farmer cooperative is often only involved in one project. Non-farmer or non-biogas organisations are limited and are predominantly focusing on consumer dairy (e.g. Arla, FrieslandCampina), automotive (Audi), or energy (E.ON). In some countries, one player has a large share in the market of agricultural biomethane production:
- Sweden: Finnish company Gasum was either involved from the start or got the plants via acquisition or subsidiary for a large share of plants.
- Netherlands: Bioenergy specialist HoSt is either directly or via subsidiary Bright Biomethane involved as owner or developer in a large share of plants. In some cases, large companies such as FrieslandCampina and Rabobank are involved in the projects as well. Agradu BV is another player in the Dutch market.
Most countries balance biomethane supply and demand nationally, resulting in limited cross- border trade of biomethane certificates (<10% of biomethane production). Cross-border trade of biomethane certificates is increasing in the EU; Denmark, Sweden, and Germany are the key players.
Most countries balance biomethane supply and demand locally or nationally. Cross-border trade of biomethane certificates is still limited in Europe (less than 10% of biomethane production) due to the lack of sufficient European harmonisation and cooperation between member states.14 However, cross-border trade is growing; the growth is driven by the possible use of biomethane for the emission trading scheme (ETS) to clear CO2 certificates and the development of harmonisation and cooperation on biomethane certification between member states (Figure 2.15).37 Apart from the cross-border trade of GoO, the total biomethane trade in Europe also includes bilateral commercial contracts between countries, especially where no GoO scheme is in place.
Figure 2.16 gives an overview of selected biomethane-producing countries that had data availability on consumption.37 Differences in consumption and production of countries and cross-border trade relate to available support schemes and whether this support targets biomethane production and grid injection (e.g. Germany and Denmark) or end use (e.g. Sweden). In Great Britain, the Netherlands, and Denmark, biomethane certificates can, for example, be offered much cheaper because biomethane in these countries is already subsidised for feeding into the natural gas network. Around three-quarters of the Danish certificates were therefore traded outside of Denmark in 2019.37, 38 The opposite is true for Sweden; Sweden imported 200 GWh from Denmark in 2016, which increased to about 1,132GWhin2018andiscontinuingtogrow.14In2019, Sweden imported almost 1.8 TWh biomethane, of which almost 66% resulted from Danish imports.39 In 2018, Germany produced around 1,498 GWh of biomethane more than its consumption. This biomethane was partly used for export to the Netherlands and Switzerland.14 Another large consumer of biomethane certificates is the Swiss market, which is being supplied from Denmark, Great Britain, and Germany.37
Ongoing initiatives with national registries and European coordination through the European Renewable Gas Registry (ERGaR) are gaining momentum. Six EU countries have a national biomethane registry.
Several initiatives are ongoing to increase biomethane trade volumes across Europe:
- The European standard-setting body CEN published two standards in 2016, including one on biomethane for injection in the natural gas network (EN 16723-1:2016).40 CEN is working to improve parts of these standards. The FaSTGO (Facilitating Standards for Guarantees of Origin) project is ongoing, providing advice to the EC regarding the revision of the CEN 16325 standard.41
- The European Renewable Gas Registry (ERGaR) was founded in 2017 to enable cooperation and cross-border trade between European registries of biomethane certificates.42 ERGaR is currently working on a CoO scheme to facilitate the cross-border title transfer of CoOs between participating national biomethane registries. The scheme is in the final stages of development and is expected to go-live soon.43 This independent registry will help preventing the double sale and double counting of certificates through a technical hub for cross-border transfers of CoO.
- Bilateral and multilateral agreements to exchange certificates are in place between national registries (Table 2.2)—e.g. between Austria and Germany, Germany and Denmark, and the UK and Germany.44