Spain could become a global biomethane leader, says Strategy&

A favorable regulatory landscape and a largely untapped market could quickly see Spain transform into a leader in the biomethane industry, which is on the rise in the European Union. That is according to strategy consultancy Strategy&, which projects Spain could become the fourth largest producer by 2050.

Though Spain currently lags behind other EU countries in biomethane production, there are currently 14 installed biomethane facilities in the country, with 12 already connected to the natural gas grid. Only 1% of all natural gas consumption in Spain is biogas (in all its forms), quite low compared with the EU average of 7%.

Biomethane is a purified form of biogas produced via the anaerobic digestion of organic matter. This gas is nearly identical to natural gas, which means it can be used for heating, electricity, and as a transportation fuel, while offering a renewable and lower-emission alternative.

Spain’s biomethane facilities together produce 0.5 TWh (trillion watt hours) per year, far from the levels of more well-equipped producers in Europe. For example, Germany produces a total of 13 TWh per year, Denmark a respectable 5.7 TWh.

The Strategy& report projects that Spain could reach biomethane production of up to 163 TWh per year by 2050, making it the most promising market behind France, Germany, and Turkey. With its excess of livestock and industrial activity, the Northeast could lead the way for future production, though the Southern regions could also play a big role.

Investments

This positive momentum has attracted private sector investment to Spain’s biomethane industry. Several companies have established platforms and moved to acquire portfolios of projects currently under development.

The current leader in natural gas distribution in Spain, NEDGIA, has already connected 9 biomethane plants to the natural gas grid, has made agreements for an additional 59 plants to be connected, and is in the process of evaluating 477 connection requests, according to Strategy&.

“Based on these figures, there could be more than five hundred projects under development in Spain,” said David Rodríguez Villanueva, partner at Strategy& in its Madrid office.

“Considering standard project development lead-times of four to five years and a 30% to 35% success rate for projects under evaluation – considering most of them are in origination stage – Spain could have around 15 TWh of operational biomethane projects by 2030,” he added.

As with any major industrial projects, new biomethane facilities must be built and operated in compliance with various regulations related to gas, waste, noise, and other factors. These regulations can vary from one region to another in Spain, which is divided into various Autonomous Communities, each with their own set of rules.

This is just one of many sources of difficulty when it comes to developing new facilities. But despite that, autonomous communities in Spain are actively looking to promote biomethane plant development in their regions.

In the past several years, the EU has committed to a series of ambitious environmental goals, including slashing greenhouse gas emissions by at least 55% by 2030. Biomethane is seen as a promising short-term alternative for hard-to-abate sectors that still need combustible energy, with the end goal being total electrification through renewables like wind and solar.