Biomethane crisis in Germany: price drop and supply bottlenecks are imminent!

Biomethane crisis in Germany: price drop and supply bottlenecks are imminent!

In Cologne everything is currently focused on the topic of biomethane. This climate-friendly gas, which is obtained from the fermentation of organic materials such as manure and organic waste, plays a crucial role in the German energy transition. According to dena, the processing of biogas produces almost pure methane, which can not only be fed into the natural gas network, but also used as fuel and to produce electricity and heat. And best of all: The entire process works within a closed CO₂ cycle, which significantly improves the environmental balance. The first biomethane plants were put into operation in Germany in 2006, and in 2024 around 10 TWh of biomethane could be produced in around 230 plants, with an additional 3.5 TWh being imported. However, this development could stall because, according to an industry survey by dena, the business situation is currently very tense, especially due to a drastic drop in prices in the fuel sector.

Many German municipalities are increasingly relying on local heating to ensure a sustainable heat supply in the long term. Natural gas will be used in the short term until 2026, while hydrogen will be the focus in the medium term. This shows how important biomethane is in heat planning. There are also concerns about the Gas Network Access Regulation, which expires at the end of 2025, which could potentially jeopardize biomethane infrastructure. The requirement for clear regulation at EU level is not only an important issue in Germany. In France, for example, the potential of biomethane has been better understood and a corresponding infrastructure has been built, which raises the question of whether Germany is losing out here.

The challenges of the biomethane industry

Another problem is the increasing pressure from foreign producers who offer high prices for their biomethane. These practices mean that German biomethane comes under pressure and, as already mentioned, domestic production is hindered. Some manufacturers also criticize practices such as the “virtual liquefaction” of fossil LNG as “bio-LNG”. Such practices not only undermine the credibility of the renewable energy certification system, but also require clear regulations at EU level.

The insolvency of large retailers has had a massive impact on security of supply. Many companies find themselves in the unfortunate position of having to purchase biomethane at high cost or switching to fossil fuels. Falling sales figures and the crisis in the EEG market are affecting the entire industry. Against this background, it almost seems like a ray of hope that other European countries are pursuing ambitious expansion goals for biomethane and that there is a stable investment climate.

The importance of biomethane is not only discussed in politics. There are also innovative approaches in the industry, such as Natural Gas Südwest's investment in a plant to liquefy biomethane into bio-LNG. Such developments are crucial to ensure long-term competitiveness and maintain our place at the top of the European biomethane market.

In summary, it can be said that the biomethane industry is facing major challenges. Nevertheless, the thought of the potential that lies dormant in this sustainable form of energy remains unbroken. With proper planning, innovative solutions and fair regulation, Germany could continue to play a leading role in the European biomethane market.