Academic: Higher carbon price needed to ramp up EU biomethane production

(EurActiv, 1 Oct 2019) The price of CO2 credits on Europe’s emissions trading scheme needs to rise to around €50 per tonne in order to drive the long-term development of Europe’s biomethane industry, says Marc-Antoine Eyl-Mazzega, a French researcher.

Marc-Antoine Eyl-Mazzega is the director of the Centre for Energy at the French Institute for International Relations (IFRI). He spoke to EURACTIV’s energy and environment editor, Frédéric Simon.

INTERVIEW HIGHLIGHTS:

  • In Germany, incentives were cut because biogas was considered too expensive for the taxpayer – and environmentally questionable due to the sector’s over-reliance on dedicated energy crops.
  • But other countries like Denmark have successfully developed biomethane based on agricultural waste and livestock manure to the extent that it now represents 10% of what’s injected into the country’s natural gas grid.
  • Even if biomethane is more expensive than natural gas, solar and wind power, it also has a number of positive externalities that are currently not taken into account – including avoided CO2 emissions, rural development and circular economy benefits.
  • If added up, those benefits result in a price of biomethane in the range of €35-55/MWh, down from €95/MWh currently, which is not far from the price of natural gas, and compares well to the current average wholesale price of electricity.
  • Biomethane development also has to be seen in conjunction with hydrogen, because part of the equation is what to do with the existing gas grid infrastructure.
  • Guarantees of origin (GOs) have to be harmonised at EU level in order to drive growth of  biomethane and other low-carbon gases like hydrogen.

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Who are the leading countries in Europe when it comes to developing biogas? Are there any best practices worth highlighting?

One has to distinguish the very mature biogas industry and the newly developing biomethane industry which consists in upgrading biogas to biomethane – basically CH4, which can be injected into the gas grid.

The leaders clearly are Germany and Denmark. Germany especially has developed the biogas industry in the last 10 years.

External link

EurActiv, 1 Oct 2019: Academic: Higher carbon price needed to ramp up EU biomethane production