Navigating the European Biomethane Market

The European Commission’s (EC’s) recent implementation of the Union Database (UDB) represents a significant development in facilitating the traceability of renewable fuels in the European Union (EU) Member States (MS). While currently operational for liquid biofuels, the UDB is set to encompass gaseous renewable fuels such as biomethane by November 21, 2024, aligning with the Renewable Energy Directive III (RED). Since the need to satisfy renewable energy quotas drives a large part of the incremental value of these molecules compared to existing fossil fuel products, this change is relevant to all suppliers of biomethane to the EU market, potentially impacting the commercial feasibility of projects currently under development.

Once the UDB opens for gaseous renewable fuels, certification of biomethane from third countries’ grid will only be possible if the foreign grid meets the conditions described in Article 31a of the RED and the implementing regulation. The foreign grid must ensure full traceability of the biomethane injected and withdrawn from the grid in a mass balance system. In particular, information on sustainability and any support provided for the production of a specific consignment of fuel will have to be recorded in the UDB.

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Based on the RED and EC’s guidelines, the U.S. grid is not compliant with the European definition of interconnected infrastructure and is not considered a single mass balance system and therefore is not part of the UDB system. The limiting factor in the U.S. is the lack of a federal database to track the sustainability, production, transfer of title, and retirement of the environmental attributes of biomethane.

Recent developments around the UDB present serious challenges for the trade of biomethane between the U.S. and the EU and carry significant repercussions that can jeopardize access of the U.S. biomethane to the EU. There are currently several working groups within the U.S. reviewing alternatives to comply with EU regulations. Whether it is amending the U.S. Environmental Protection Agency (USEPA) Moderated Tracking System (EMTS) to track non-transportation biomethane and include the functionality to capture the emission reduction benefits or utilizing the Midwest Renewable Energy Tracking System (M-RETS®), a registry platform that tracks voluntary biomethane in the U.S., many industry participants feel there is a solution to meeting the EU requirements.

EcoEngineers is your strategic partner in navigating this intricate regulatory landscape, advising you on proactive essential measures to access European market. We bring expertise in both the U.S. and EU regulatory and market developments to help U.S. biomethane suppliers streamline compliance efforts and ensure market integration and business growth on both sides of Atlantic. We also developed an in-depth educational program on the EU’s renewable energy and cap-and-trade systems to help our clients position themselves in the expanding European biomethane market and make strategic business decisions.

About EcoEngineers

EcoEngineers is a consulting, auditing, and advisory firm with an exclusive focus on the energy transition. From innovation to impact, we help you navigate the disruption caused by carbon emissions and climate change. We help you stay informed, measure emissions, make investment decisions, maintain compliance, and manage data through the lens of carbon accounting. Our team of engineers, scientists, auditors, consultants, and researchers live and work at the intersection of low-carbon fuel policy, innovative technologies, and the carbon marketplace. Eco was established in 2009 to steer low-carbon fuel producers through the complexities of emerging energy regulations in the United States. Today, our global team is shaping the response to climate change by advising businesses across the energy transition. Together, we can create a world where clean energy fuels a healthy planet.

EcoEngineers is accredited by ANSI National Accreditation Board (ANAB) as a greenhouse gas (GHG) verification body in accordance with ISO standards ISO/IEC 17029:2019, ISO 14065:2020, and ISO 14064-3:2019.

Urszula Szalkowska