Biogas and biomethane are key partners to decarbonise territories while diversifying Europe’s gas supply

Renewable gases are already playing a major role in remedying the current natural gas supply crisis. They include biogas (resulting from the digestion of organic waste in the absence of oxygen made up of 65-70% of methane and CO2) as well as biomethane that has been upgraded from raw biogas and that can be injected into existing natural gas grids or used as biofuel for mobility. Zooming on biomethane, according to the European Biogas Associations (EBA) latest estimates: the 2030 annual production potential is estimated at 370 TWh which represents a GHG saving potential of 128 million tons of CO2eq; and the 2050 potential at 1,000 TWh which represents a GHG saving potential of 345 million tons of CO2eq. This major production and GHG saving potential could not be disregarded and should be fully exploited across Europe given the current unstable geopolitical and climate-stressed context we are all living in.

Veolia has been one of the most important facilitators of the deployment of local scale biogas production and use. We offer our clients – both public and private – a variety of solutions that enable the implementation of the circular approach at territory scale as well as increase resilience when faced with unprecedented crises such as the one we are witnessing nowadays.

Biogas can be generated in various manners and in various sectors, including capturing methane from landfills and digesting residual sludge from wastewater treatment plants (methanisation). It is a source of renewable energy that can take the form of a gas re-injected directly into the grid, be captured and recovered in the form of electricity (Veolia produces 1.2 million MWh of electricity from over 14 million metric tons of landfill waste annually), heat for district heating networks in cogeneration facilities, as well as a low-carbon biofuel (BioLNG).

In 2022, Veolia together with industrial partners commissioned one of the largest biomethane production units in Europe, and France’s largest biomethane production facility in Claye-Souilly in the Île-de-France region¹. This fully automated and remotely controlled production unit recovers and treats the biogas from landfill waste to transform it into biomethane which is then reinjected into the existing gas network. The biomethane produced on this site is competitive thanks to a feed-in tariff granted by French authorities to this type of installation. When fully operational, the facility will produce 120 GWh of biomethane annually – the equivalent of the annual average consumption of 20 000 households or 480 buses fuelled by BioLNG – and will avoid approximately 25,000 tonnes of CO2 annually.

In Bulgaria, Veolia is operating the wastewater treatment plant of Kubratovo on behalf of the city of Sofia. In 2009, a new cogeneration system was installed in order to use the biogas produced from the methanisation of sewage sludge. The aim was to optimize the operation of the plant and its energy efficiency as well as to reduce carbon emissions.

To further improve its performance, the cogeneration system has been modernized in 2019, aiming at becoming 100% energy sufficient in the coming years, relying only on the renewable energy produced on-site. Since the commission of the cogeneration installation in 2009: 198 million kWh of renewable energy were produced; 92 million m3 of biogas were consumed, and 1, 080 tons of CO2 emissions were avoided. This local energy loop provides several benefits for the city of Sofia (greener city, cost efficiency), for the territory (protecting the environment by recycling waste, reduced carbon emissions), but also for the community (on-the-job training ground for young engineers).

That makes Veolia one of the world’s fast movers of biogas production, with primary energy resources of almost 6 TWh. A world leader in ecological transformation, we aim to accelerate the production of biomethane from waste and water treatment, and thereby contribute to the energetic autonomy of territories, communities and economic activities. In this journey, we are working hand in hand with gas network operators who are a key link in the development of biomethane projects, in particular by approving connections to the grid. We therefore support setting out EU-wide rules enabling quick and affordable grid connection of biomethane projects. Moreover, the biomethane sector represents an important source of future job creation², which by nature cannot be delocalised outside Europe.

Yet, to reinforce our abilities to support our clients (cities, territories, businesses) in their transition towards greater energy independence and security as well as their efforts to stave off climate change, we need a stable, predictable and most of all, ambitious policy framework for the promotion of biogas and biomethane at EU and national levels. This framework needs to comprise clear and ambitious intermediary targets (for 2025, 2030, 2040 and 2050 horizons) and appropriate incentive mechanisms to ensure cost-competitiveness of biogas and biomethane production. This would require Member States to develop national strategies on the role of biogas and biomethane in cooperation with the relevant stakeholders, to create a long-term policy framework for the development and support of the biogas and biomethane value chain.

In this sense, France can be seen as a genuine model: recently, the country set a target of 7% of biogas consumption “in the event of a drop in the cost of production” by 2030, or even up to 10% “in the event of a higher cost reduction”, i.e. 39 to 42 TWh³. The government roadmap provides for 6 TWh of biomethane to be injected in 2023, and between 14 TWh and 22 TWh by 2028 (up from the current capacity of 6.4 TWh).

New biomethane production facilities are eligible for a regulated biomethane feed-in tariff of between 52 and 140 euros per megawatt-hour. Last but not least, the government raised the level of support for the costs of connecting biomethane to natural gas networks – the connection costs to natural gas networks will be borne by the community at 60%, instead of 40%.

France’s biomethane production potential could even be more effectively tapped if co-digestion of solid organic waste with sewage sludge would be authorized, like in many Member states. Despite all this, the French context remains a perfect example of how public policy can drive optimistic market development that will benefit individual consumers as well as entire territories, while helping reduce the overall carbon footprint. This example can be replicated in other Member states where the biogas market is quasi inexistent, with specific guidance and devoted resources – including funds for innovation and R&D – coming from the EU.

With the adoption of the REPowerEU Plan published on 18 May 2022 in response to the war in Ukraine, we are glad to see the intention of the European Commission to pursue its strategy to replace the EU’s reliance on Russian fossil fuels through a massive scale-up in renewable gases, electricity and fuels in power generation, industry, buildings and transport.

We very much welcome and support the Commission’s promotion of biomethane production materialized by the ambitious target of reaching 35 bcm annual production by 2030 (eq to 370 TWh), which is achievable according to the recent study from Gas for Climate consortium. However, we call on the European Commission to anchor this target into legislation – for example by placing it in the revised Renewable Energy Directive – to send an even stronger message to the biomethane market and value chain. This market needs a clear target but also governance to pave the way to the required deployment of solutions, adequate policy framework and needed investments. For that reason, Veolia is committed to taking an active role in the upcoming Industrial Partnership on biomethane to be launched during Autumn 2022.

While there are clear indications that biogas production becomes more and more competitive⁴ – especially given the fact that we are probably entering a long period of high gas prices – still, to increase the capacity of its production in the EU and promote its conversion in biomethane, estimated investments need to amount to 36 billion euro by 2030. That means that more and better financing tools will have to be mobilized, from public and private sources to achieve our ambitions. That is why we call on decision-makers to also design adequate financing tools, in consultation with relevant stakeholders, to enable fast and widespread deployment of biogas and biomethane projects in Europe. Veolia is fully prepared to contribute to this collective effort to diversify Europe’s energy mix while breaking off our dependence on gas deliveries from outside Europe.

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1 Veolia already produces a total of 1.4 TWh of biogas in France, equivalent to 10% of the French biogas production target set out in the 2023 Multiannual Energy Plan.

2 Conducted under the aegis of the French Ministry of Labor, Employment and Integration, a prospective study on employment and skills in the gas, heat and associated energy solutions sector highlights that the sector will represent up to 401,000 sustainable jobs by 2030. 170,000 new hires are expected in gas production (including hydrogen, biomethane and biopropane) and in energy services (renovation, installation, operation maintenance of equipment and facilities).

3 The equivalent of half of what the country imports from Russia.

4 See: “Gas Crunch: time to factor in volatility and externalities to reveal its true costs”