Biogas in the EU: A policy and financial analysis

The European Union is the global leader in biogas production, reaching 22.8 billion m3 in 2024. While promoted as a renewable energy source, the report argues that the sector risks causing significant environmental harm through methane leakages, the incentivisation of industrial animal farming, and the use of food crops as feedstock. It further contends that the injection of biomethane into existing gas grids may postpone the transition to truly sustainable energy systems by locking in fossil gas infrastructure. The report examines the policy landscapes of seven European countries, noting that while most support biogas expansion, regulatory safeguards against these environmental risks are often insufficient. It also details the role of major oil, gas, utility, and agri-food companies in the sector and identifies the primary financial institutions providing credit and investment to biogas producers.

• The European Union is the global leader in biogas production, with a total volume of 22.8 billion m3 in 2024, accounting for more than half of global production.
• Methane leakage is a critical issue across the biogas supply chain; IEA estimates suggest leakage rates from 0.1% to 2.4% at feedstock reception and up to 12% during production, while digestate storage leakages can reach 15%.
• The use of manure as a feedstock may incentivise industrial animal farming, which is linked to high enteric methane emissions and deforestation caused by imported feed crops, such as soy from Brazil.
• The use of agricultural crops as feedstock threatens food security and leads to monoculture expansion and greenhouse gas emissions from land-use change.
• Injecting biomethane into existing fossil gas grids may prolong dependencies on fossil gas and delay investments in sustainable energy transitions, as biomethane cannot replace all fossil gas consumption.
• The REPowerEU plan aims to increase EU biomethane production tenfold, from 4.9 billion m3 to 35 billion m3 per year by 2030, but was launched without a comprehensive environmental impact assessment.
• Germany is the EU's largest producer, accounting for 48% of total production, though its growth has slowed and it now focuses on making existing plants more flexible.
• Denmark is the most ambitious in its grid transition, aiming for 100% biomethane in its gas grid by 2030, and has implemented a 2023 regulation requiring plants to limit methane leakage to less than 1%.
• Ireland's biogas market is in early stages, but the National Biomethane Strategy targets 572 million m3 of indigenous biomethane annually by 2030.
• The Netherlands targets 2 billion m3 of biomethane by 2030 and plans to implement a green gas blending obligation in 2026 to mandate the mixing of biomethane with fossil gas.
• Poland is accelerating its biogas sector through the 2023 Act on the Facilitation of Agricultural Biogas Plants and various subsidy schemes, though it currently utilizes only 3% of its potential capacity.
• Romania has the lowest production among the studied countries but high technical potential, with a target of 5% biomethane in the gas grid by 2030 and 10% by 2050.
• The UK biogas market peaked between 2014 and 2017 and is now growing moderately, with an ambition of 3-4 billion m3 per year by 2050.
• Private credit financing for dedicated biogas companies increased significantly from 2022 to 2024, with NatWest, BNP Paribas, and Santander as the largest financiers.
• Major institutional investors in dedicated biogas companies include BlackRock, Lazard, and Pictet, with BlackRock investing EUR 975 million across three companies as of May 2025.

APA

van Gelder, J. W., Boev, P., Laplane, J., Sanchez, J., Schepers, D., Stravens, M., & Witkowska, A. (n.d.). Biogas in the EU: A policy and financial analysis. Changing Markets Foundation. https://changingmarkets.org/wp-content/uploads/2025/10/MM-Report-Biogas-in-the-EU-A-policy-and-financial-analysis-recolored-V010-Final.pdf

Chicago

van Gelder, Jan Willem, Pavel Boev, Juliette Laplane, Jim Sanchez, Debbie Schepers, Manon Stravens, and Aleksandra Witkowska. Biogas in the EU: A policy and financial analysis. Changing Markets Foundation, n.d. https://changingmarkets.org/wp-content/uploads/2025/10/MM-Report-Biogas-in-the-EU-A-policy-and-financial-analysis-recolored-V010-Final.pdf.

Wikipedia

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BibTeX

@techreport{vangelderndbiogas, author = {van Gelder, Jan Willem and Boev, Pavel and Laplane, Juliette and Sanchez, Jim and Schepers, Debbie and Stravens, Manon and Witkowska, Aleksandra}, title = {{Biogas in the EU: A policy and financial analysis}}, institution = {Changing Markets Foundation}, url = {https://changingmarkets.org/wp-content/uploads/2025/10/MM-Report-Biogas-in-the-EU-A-policy-and-financial-analysis-recolored-V010-Final.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }