1 topic, 2 key figures, 3 startups to draw inspiration from
Over the years, the French government has boosted the financial incentives offered to the biomethane industry to reduce the costs associated with the production and operation of units. Whereas the exemption from the domestic consumption tax on natural gas (TICGN) previously applied to biomethane, the French government has just announced that it will no longer apply from January 2021. France Biométhane, a green gas think-tank, deplores this decision which, according to them, discredits biomethane and favors fossil fuels.
Biomethane, defined as a renewable natural gas with properties close to those of natural gas, may well play a major role in building a sustainable energy future according to the International Energy Agency (IEA). Indeed, there is no need to change the transmission and distribution infrastructures or end-user equipment. Consequently, it can be injected into the natural gas distribution network very easily or used as fuel for vehicles (bio-CNG, bio-LNG). It is also comparable to renewable energy since it emits 10 times less carbon than natural gas, can be stored and offers a solution to the intermittent use of solar and wind energy. Finally, it reduces the pressure on landfills and fits into the circular economy. Therefore, there are reasons to believe that biomethane could become more firmly established in the future. How about its economic viability and technical feasibility?
To date biomethane can be produced in 3 ways:
- The biogas road – which uses wet biowaste. It uses the means of anaerobic digestion to convert the biowaste into biogas. The biogas is then purified to remove the CO2 and other contaminants to produce biomethane.
- The syngas road – which uses dry or semi-dry biowaste. It uses the means of pyro-gasification to convert the biowaste into syngas. The syngas is then cleaned and methanised to convert the hydrogen, carbon monoxide and dioxide into methane.
- The hydrogen road – which uses electricity. It uses the means of electrolysis (or power-to-gas) to convert electricity into hydrogen. The hydrogen is then cleaned and methanised to convert it into methane.
In short, there are three main methods for producing biomethane: anaerobic digestion, pyro-gasification and electrolysis. To date, approximately 90% of the biomethane produced comes from anaerobic digestion and the upgrading of biogas. Among the purifying and upgrading technologies, we can find water scrubbing, adsorption, cryogenic separation, membrane technology, etc.
Waga Energy, a landfill gas-to-energy technology firm, is one of the large players in this segment. In 2018 they notably joined forces with environmental services giant Veolia. Since then, Veolia has been using Waga Energy’s Wagabox® technology to produce biomethane using biogas, which is injected directly into the natural gas grid operated by GRDF. In early October, the two players signed a contract to install a purification unit at the waste storage center in Claye-Souilly. This facility, which should be commissioned by February 2022, will produce biomethane from waste and supply 20,000 households in the Paris region with renewable gas.
Last year, France set an objective of injecting 10% of biomethane (21 TWH) into the country’s gas network by 2030, like Denmark is already doing. Numerous biomethane injection sites have seen the light of the day. To date, 133 biomethane injection sites are producing 2.3 TWH per year. With an average annual growth rate of more than 60% over the last 3-4 years, the French goal seems feasible.
However, production costs remain high when taking into account the cost of input supply, the cost of transformation (into biogas/syngas and then into biomethane), and the cost of injection (connection to the energy grid). The price to produce biomethane reaches €95 compared to €20 for natural gas. This is why the development of biomethane will ultimately depend on the policy framework and if the market conditions remain attractive for the project leaders (green gas feed-in tariffs, stability, or reduction of construction and gas connection costs).
Overall, the optimal uses of biomethane are in the end-sectors where there are fewer low-carbon alternatives (high-temperature heating, petrochemical feedstocks, heavy-duty transport, shipping, etc.). There are also other motivations such as rural development (household digesters), energy security (complementing wind and solar PV or substituting imported natural gas) and urban air quality.
2 Key Figures
330 Biomethane startups
registered by Crunchbase
Market size expected to reach $3.4bn by 2027
The global biomethane market accounted for $1.8 billion in 2019 and is expected to reach $3.4 billion by 2027 growing at a CAGR of 8.3% during the forecast period.
3 startups to draw inspiration from
This week, we identified three startups that we can draw inspiration from: CPD-Swiss, Nexus Fuels, and Pyrowave.
Waga Energy develops, designs, invests and operates WAGABOX® units that recover biogas from landfill sites to transform it into biomethane. Waga Energy uses two upgrading processes: membrane filtration and cryogenic distillation.
Enosis develops a biomethanation reactor that converts biogas, syngas and CO2 into methane and provides flexibility services to the electrical grid.