Brussels, October 2024
A recent analysis by S&P Global Commodity Insights, with backing from ERGaR, EBA, Eurogas, and the RNG Coalition, offers valuable insights for the ongoing revision of the GHG Protocol. Certificates are seen as vital to meet rising demand for sustainable biomethane in private sectors, bolster the economic viability of new production facilities, and support climate change mitigation efforts.
The report highlights a robustly regulated biomethane market in both Europe and the U.S., which ensures sustainability, transparency, and accountability. This market plays an increasing role in helping meet GHG emissions reduction targets and is crucial for the financial foundation of new production capacity development.
In 2023, biomethane was instrumental in reducing GHG emissions by approximately 15 million metric tons of CO₂e in the EU and around 5 million metric tons in the U.S. Certification tracking for biomethane use affirms its renewable and environmental value to energy consumers, providing assurance of sustainability and transparency in production. This enables energy providers and large consumers to credibly support their commercial offerings or sustainability reporting as they work toward reducing emissions and achieving decarbonization goals.
As the biomethane sector grows, certificates are essential for producers to secure market-driven revenues instead of relying on government subsidies, making biomethane projects more competitive against conventional natural gas and other fossil fuels. Biomethane demand through certificates spans both compliance markets (like road transport fuels) and expanding voluntary markets, with major European and U.S. companies—such as food and beverage producers, chemical manufacturers, and shipping firms—showing interest.
In the EU, biomethane trading is legally monitored through Guarantees of Origin (GOs) and Proof of Sustainability (PoS) certifications, which support capacity expansion and encourage low-carbon feedstock use. By late 2024, the EU Union Database for Biofuels (UDB) will further aid traceability of mass-balanced certificates.
As biomethane production is anticipated to grow significantly by 2030, robust tracking systems and an understanding of the role of biomethane certificates will be critical. The EU aims for a production target of 35 bcm per year by 2030.
Much of this growth is expected from the voluntary market, with the GHG Protocol guidance being crucial, as many companies use it to account for and report emissions. Currently, the GHG Protocol lacks explicit guidance on using certificates to document GHG savings from biomethane procurement. Established biomethane certification schemes have proven effective in scaling production within EU and U.S. compliance markets. The report underscores that adding clarity to the GHG Protocol regarding biomethane inclusion would facilitate sustainable production and use worldwide.
You can consult and download the report below