EU galvanising anaerobic digestion and biogas investment


A new analysis has shown how the EU, through their green taxonomy and REPowerEU initiatives, are supporting growth opportunities in the European anaerobic digestion (AD) and biogas production sectors.

The report, from consultancy firm Frost & Sullivan, shows that several European countries, including Germany, the United Kingdom, and Denmark, are at the forefront of leveraging the potential of biogas produced through the anaerobic digestion of energy crops, agricultural waste, organic waste, and sewage sludge. Subsidies and incentives are the key growth drivers.

As part of its ‘Net Zero By 2050’ Strategy, the EU has either legislated or introduced policies to improve the share of renewables in the energy and transportation sectors. The Renewable Energy Directive II (RED II) has set a target of a 32 per cent renewables share in the final energy consumption by 2030, and a 14 per cent renewables share in the energy mix for the transport sector.

Other directives, such as the Landfill Directive, aim to reduce the landfilling of waste to ten per cent of the total waste generated, encouraging the recycling and reuse, and the diversion of, organic waste to AD or composting. The Global Methane Pledge, led by the EU and the United States, targets methane emission reduction by 30 per cent.

All the above policies, targets, and directives drive new investments into AD and biogas production. Fresh impetus for even faster growth came through the REPowerEU plan that was implemented as a response to reduce dependence on imported fossil fuels, especially from Russia, due to the Russo-Ukrainian War. The plan has set an ambitious target of increasing the current production of biomethane to 35 bcm by 2030.

The disruption in gas prices that has impacted the economy has further reinforced the need for biogas as a reliable alternative to fossil fuel-based natural gas. Most countries have set individual targets to increase the local production of biogas. In the past, energy crops were used as feedstock due to their biogas yield, but now, organic waste and agricultural waste (including livestock manure) are considered more sustainable; they facilitate a circular economy and are highly reliable sources due to their ready availability.

According to Frost & Sullivan, the growth in the production of biogas is expected to decrease the cost of production by up to 20 per cent during the forecast period. As a result, the European market is set to grow to $53.69 billion by 2030 at a compound annual growth rate of 8.8 per cent from 2021 to 2030.

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