The biomethane boom: Turning waste into sustainable energy solution and long-term value

As the energy transition accelerates, biomethane is emerging as a key solution, combining energy efficiency, sustainability, and circularity. Backed by regulatory frameworks and market-based instruments such as biomethane certificates, it offers a tangible opportunity to meet Europe’s climate targets.

In this article, we provide a comprehensive overview of biomethane: how it’s produced, its various applications, its role in corporate decarbonization strategies through the GHG CCProtocol, and the traceability tools designed to support its deployment.

Biomethane: A sustainable energy solution

Biomethane is a renewable gas derived from the purification of biogas, itself produced by the fermentation of organic matter such as agricultural waste, sewage sludge, manure and food waste. Unlike raw biogas, which contains a mix of methane (CH₄), carbon dioxide (CO₂), and other impurities, biomethane is refined to achieve a methane content of around 96%, making it nearly identical to natural gas.

Thanks to its composition, biomethane can be injected into existing gas grids or used directly as fuel. Its applications include:

• Grid injection for heating or industrial use
• Electricity and heat generation (cogeneration)
• Renewable fuel for transport (bioCNG or bio-LNG).

With a carbon footprint up to ten times lower than fossil natural gas, biomethane offers strong benefits for the circular economy by transforming waste into clean, usable energy and reducing greenhouse gas emissions.

Biomethane certificates: a powerful driver for the energy transition

To support the growth of biomethane, renewable production certificates – also known as Guarantees of Origin (GO), and if certifed additional Proof of sustainability (PoS) – have been established to verify the renewable origin of the gas injected into the grid.

These certificates are market instruments that allow companies and consumers to voluntarily purchase biomethane and demonstrate their commitment to renewable energy. Each certificate represents one megawatt-hour (MWh) of injected biomethane and can be traded independently of the physical delivery of gas.

There are two main types of certificates:

• Standard certificates, confirming the production and injection of biomethane
• Certificates with sustainability labels, offering additional guarantees (e.g., Naturemade Star, REDCert)

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Already recognized in several European countries, these certificates play a strategic role in corporate decarbonization plans. Registered in national registries, they can be used to offset fossil energy emissions and help drive demand for green gas.

The role of the GHG Protocol in corporate decarbonization

The GHG Protocol, the international benchmark for greenhouse gas emissions reporting, is currently assessing the inclusion of biomethane certificates in its accounting methodologies – particularly in Scope 1, which covers direct emissions from operations.

Key points of the ongoing debate:

• Industry dialogue: discussions are underway between the European Biogas Association (EBA) and the GHG Protocol to define the treatment of Guarantees of Origin and Proofs of Sustainability (PoS).
• Sector demand: over 100 companies and associations are calling for explicit recognition of renewable gas in GHG reporting frameworks.
• Methodological exploration: the GHG Protocol is evaluating a market-based approach for Scope 1, but uncertainties persist regarding how biomethane’s emission factors should be treated when using certificates.
• Current status: while Guarantees of Origin can be annexed to emissions reports, they are not yet recognized as a valid mechanism for reducing Scope 1 emissions.

In summary, biomethane can be seen as a key decarbonization tool, but its formal integration into GHG accounting remains unresolved. As discussions progress, updates may emerge in the coming months or years, as consultations evolve.

The Union Database (UDB): strengthening traceability

As part of the RED III directive, the European Commission has launched the Union Database (UDB) – a digital platform designed to ensure the traceability and sustainability of renewable fuels, including biomethane.

The UDB has three main objectives:

• Ensure regulatory compliance for biomethane volumes claimed as “sustainable” and injected into the EU’s interconnected gas network
• Prevent fraud and double counting through a unified and transparent tracking system
• Support both regulated and voluntary markets, including transport quotas and the EU Emissions Trading System (EU ETS)

All biomethane volumes intended to count toward sustainability targets must be registered in the UDB. This requirement reinforces transparency and facilitates biomethane’s integration into European compliance mechanisms.

Although the UDB aligns with the GHG Protocol’s traceability principles, explicit guidelines on how biomethane certificates can be used within that framework are still lacking – highlighting the need for further regulatory clarity.

Decarbonization Strategy Through Biomethane: What Comes Next?

When it comes to the inclusion of biomethane certificates in the GHG Protocol’s carbon accounting methodology, no official timeline has been communicated. However, given the urgency expressed by several stakeholders, developments are expected in the coming months.

While the official framework is still under review, we can already anticipate several key market trends that would likely result from the integration of biomethane certificates into corporate decarbonization strategies:

• Increased use of Biogas Production Certificates (BPCs) and Biogas Purchase Agreements (BPAs) as innovative financing tools to support new anaerobic digestion projects
• Growth in investment across the biomethane sector, fueled by the emergence of these new financial mechanisms
• Expansion of cross-border biomethane trading in Europe, driven by the mutual recognition of certificates
• Potential rise in certificate auction volumes, as demand continues to climb
• A more competitive and dynamic biomethane certificate market, with increased liquidity and participation
• Faster deployment of new biomethane production facilities, responding to rising demand from energy buyers and sustainability-focused companies

These upcoming shifts will be key to unlocking biomethane’s full potential as a mainstream decarbonization tool for European industry.

Biomethane holds significant potential to become a key enabler of the low-carbon economy. But for this to happen, certification schemes, traceability systems, and emissions accounting methods must be harmonized at both European and international levels.

The momentum is here – but ongoing regulatory evolution is critical to unlock the full potential of this renewable gas across industries.

Want to stay ahead of regulatory changes in your decarbonization strategy?

At Nvalue, we closely monitor biomethane regulations and market developments. Our team’s expertise helps you understand the certification system and secure biomethane certificates to meet your sustainability targets.