16 December, 2020

Press release: New report provides unique overview on latest developments in renewable and low-carbon gases. Industry is ready for scale-up.

A new report published by the Gas for Climate consortium launched today. This market state and trends report provides a unique review of current biomethane and green and blue hydrogen markets in Europe. The report, developed by Guidehouse, describes key market trends and highlights leading project examples.

  • New Gas for Climate report shows market overviews and trends related to the scale-up of biomethane and green and blue hydrogen in Europe.
  • Biomethane is scaling up rapidly at decreasing costs. A wave of blue and green hydrogen projects is expected within the coming years.
  • 15% growth in grid-transported biomethane in 2018 alone, with now 65% of biomethane produced from biowaste and bio-residues.

A new report published by the Gas for Climate consortium launched today. This market state and trends report provides a unique review of current biomethane and green and blue hydrogen markets in Europe. The report, developed by Guidehouse, describes key market trends and highlights leading project examples.

Biomethane production is scaling up rapidly, with an increased share of biowaste and bio-residues as feedstock, while production costs are starting to decrease, and grid injection levels are increasing. Many green and blue hydrogen projects are described in the report. These projects focus on scaling up hydrogen demand in new industrial sectors, exploring hydrogen use in heavy transport, or aim to decarbonise existing grey hydrogen demand. The report also highlights how existing gas infrastructure is increasingly being used to transport biomethane and is being prepared to transport hydrogen. Several showcase projects focus on enabling renewable and low-carbon gas transport; this is significant because it shows how gas infrastructure can accelerate the scale-up of hydrogen and biomethane.

All these developments provide a solid basis to achieve the EU 2030 decarbonisation target and show that industry is ready to scale up biomethane and hydrogen. Regulatory certainty would help to accelerate ongoing developments and spur investments. In January 2021, Gas for Climate will publish a policy paper which calls for a mandatory renewable gas target. Such a target would further boost the identified trends that are needed to stay on track for the decarbonisation of the European energy system.

Visit the interactive Market State and Trends report and download the full report here.

About the report

Gas for Climate was initiated in 2017 to analyse and create awareness about the role of renewable and low carbon gas in the future energy system in full compliance with the Paris Agreement target to limit global temperature increase to well below 2 degrees Celsius. To this end, the entire economy has to become (net) zero carbon by mid-century.

The Gas for Climate group consists of ten leading European gas transport companies (Enagás, Energinet, Fluxys Belgium, Gasunie, GRTgaz, ONTRAS, OGE, Snam, Swedegas and Teréga) and two renewable gas industry associations (European Biogas Association and Consorzio Italiano Biogas).

The CEOs of the twelve members are: Piero Gattoni (Consorzio Italiano Biogas), Harm Grobrügge (European Biogas Association), Marcelino Oreja Arburúa (Enagás), Torben Brabo (Energinet),

Pascal De Buck (Fluxys), Han Fennema (Gasunie), Thierry Trouvé (GRTgaz), Ralph Bahke (ONTRAS), Jörg Bergmann (OGE), Marco Alverà (Snam), Hans Kreisel (Swedegas), Dominique Mockly (Teréga).

The Market State and Trends report is the first in a series prepared by Navigant, now Guidehouse. The report places key trends related to biomethane, hydrogen and gas infrastructure in the light of required developments towards 2030 as identified in the Accelerated Decarbonisation pathway scenario which was published by Gas for Climate in April 2020.[1]

The report shows that already now, key deployment trends for biomethane and green and blue hydrogen are starting the move in the right direction to achieve 2030 decarbonisation targets as analysed in the 2020 Gas for Climate pathways study. An increased deployment of biomethane and hydrogen will also create large numbers of jobs, as was analysed in a report by Gas for Climate in 2019[2].

On the biomethane supply side, production technologies are developing and being scaled up, and waste stream feedstocks are gaining momentum. Hydrogen technology developments are scaling up in size and early stage project developments are taking place. For both gases, acceleration is still required to increase cross-border trade and bring down production costs.

The report distinguishes between grey, green and blue hydrogen. Grey hydrogen is produced from natural gas and is being used at scale in EU industry today. Blue hydrogen adds carbon capture and storage to hydrogen production based on natural gas. Green hydrogen is being produced by splitting water into hydrogen and oxygen in an electrolyser, using renewable electricity and water as feedstock. Green hydrogen can also be produced by feeding biomethane in a steam methane reforming unit or an autothermal reforming unit.

Key demand sectors for biomethane and blue and green hydrogen developments in the 2020s are industry, transport and the built environment. Early investigations are ongoing with substitution of grey hydrogen in the refining and chemical industry, whilst in the iron and steel sector first demonstration projects and early deployment of new green hydrogen processes are being developed. In heavy road transport, bio-LNG/CNG and hydrogen uptake is increasing. In contrast, the shipping industry is only in an early stage of adoption. A renovation wave is starting in the built environment, but acceleration is required. Early adoption of hybrid heating technologies is enabling decarbonisation.

Biomethane grid injection levels are increasing and need to continue to accelerate to stay on the 2030 track. Early commercial deployment of centralised biogas upgrading and reverse flow installations are taking place to speed up biomethane uptake in the gas grid. Hydrogen infrastructure developments are currently still less mature with early developments of dedicated hydrogen infrastructure and storage and pilots to increase blending levels.

Renewable gas is all gas produced from renewable sources. This includes biomethane in the form of upgraded biogas produced by anaerobic digestion of agricultural biomass and organic wastes, biomethane produced from thermal gasification of woody residues, hydrogen produced from renewable electricity or biomethane, and synthetic methane produced from renewable hydrogen.



 

[1] Gas for Climate, Gas Decarbonisation Pathways 2020-2050 (2020), https://gasforclimate2050.eu/?smd_process_download=1&download_id=339

[2] Gas for Climate, Job creation by scaling u renewable gas in Europe (2019), https://gasforclimate2050.eu/?smd_process_download=1&download_id=275. This report concludes that scaling up biomethane and green hydrogen to 2900 TWh by 2050 can create 1.7 million to 2.4 million jobs by 2050, of which 600,000 to 850,000 direct jobs.

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