Introduction: A Year of Delays
In 2025, one clear pattern shaped the European biomethane market: important legislative decisions were postponed. These delays, from the Union Database to the biomass package and the amendment of the Federal Immission Control Act (BImSchG), increased uncertainty for all market participants throughout the year. The greatest impact on market activity, however, came from the entry into force of the FuelEU Maritime Regulation (EU 2023/1805).
International Developments
FuelEU Maritime: New Momentum in the Market
The new market for shipping fuels created substantial demand almost overnight and generated strong interest across the sector. For the calculation of emissions, the FuelEU Maritime Regulation is based on RED II and creates a strong incentive for fuels with particularly low greenhouse gas (GHG) values, such as biomethane from manure.
Initially, there was legal uncertainty as to whether energy volumes that had already received a feed-in tariff could be counted. On 10 April 2025, in response to an inquiry from agriportance, the European Commission gave an unsatisfactory answer: in the Commission's view, double counting is ruled out because different parties are obligated in each case, the Member States under RED and the shipping companies under FuelEU Maritime. The Commission also argued that this would reduce costs for the obligated parties.
Against this background, however, the rule proved insufficient. The subsidised bio-LNG volumes are not enough to meet demand. Prices for the corresponding certificates tripled in 2025. By the summer, no Dutch or Danish volumes were available anymore. In addition, producers from countries such as Germany, which do not receive a feed-in tariff, are effectively excluded from this market.
Demand is already considerable in the first year: initial tenders reached volumes of several terawatt hours. Based on how shipping companies are developing their fleets, demand can be expected to keep growing. For market access, however, the subsidy structure in Europe plays an important role. Since both subsidised and unsubsidised biomethane volumes were permitted, larger volumes from countries with subsidy-based feed-in tariffs could be offered more competitively in the initial phase than unsubsidised volumes from Germany.
Union Database: Further Delays
The Union Database (UDB), which was originally due to become mandatory for renewable gases in November 2024, is significantly delayed. Ongoing coordination suggests that full implementation may not take place until between late 2026 and early 2027. Developing a uniform European solution that integrates existing national registries is proving more complex than expected.
Overall, a harmonised database is expected to contribute to market stability in the medium term and to reduce administrative effort in the long term. In the initial phase, however, the prospect of additional documentation requirements is causing concern in some cases, particularly among smaller operators.
National Legislation
Biomass Package: Delayed Approval
The biomass package was adopted on 21 February 2025, but did not receive state aid approval from the European Commission until shortly before the tender on 1 October. As a result, some stricter rules, such as the reduced maize cap and remuneration based on operating quarter hours, took effect immediately, while other beneficial elements only came into force shortly before the October tender. The full effects of the biomass package will therefore only become apparent in the April 2026 tender.
BImSchG Amendment: Far-Reaching Changes
The draft bill for the revision of the Federal Immission Control Act (BImSchG) was under consultation for months and was only adopted by the Federal Cabinet in early December, although it is due to enter into force on 1 January 2026. The planned changes are expected to have a significant impact on the biomethane market:
- End of double counting for advanced fuels
- Stricter sustainability requirements
- Continuous increase of the GHG quota until 2040
While the end of double counting could challenge the competitiveness of biomethane compared with other compliance options, the planned sustainability criteria and the higher quota strengthen the GHG market as a whole. Developments nevertheless remain difficult to predict, especially as available refuelling capacity in the heavy-duty and gas sector is growing only slowly. In the short term, it was above all the BImSchG cabinet draft, published only two weeks before the end of the year, that had a strong impact on the quota market: prices for GHG certificates rose to over €500/tCO₂, while the price of biomethane suitable for use as fuel remained unchanged at around 13 ct/kWh.
EnWG Draft Bill: Discontent Among Feed-In Plants
For feed-in plants, the draft bill on the Energy Industry Act (EnWG), including the planned repeal of the Gas Network Access Ordinance (GasNZV), caused considerable discontent. For new plants, it does not specify how grid connection requests are to be handled. Until now, biomethane feed-in plants enjoyed preferential treatment and only had to bear 25% of the costs themselves for grid connections of less than one kilometre.
Market Developments and Prices
The German market saw opposing trends. While the first quarter was challenging for manure-based biomethane due to high available volumes, mainly from volumes released from contracts with Landwärme, a continuous upward trend set in after the price low in May. This development led to stable demand in the domestic GHG quota market, where the price recovered to around 13 ct/kWh by the end of the year.
By contrast, prices for residue-based and energy crop (NawaRo) qualities continued to decline. While more than 9 ct/kWh was still being paid for residue qualities in spot deals at the beginning of the year, prices most recently stood just above 7 ct/kWh. The UK fuel sector (RTFO) proved to be a stabilising factor and established itself as a reliable sales market.
For energy crop biomethane, which is mainly used under the EEG, the situation remains challenging: the decline in combined heat and power plants (CHP) in the electricity sector, highlighted by the dena industry barometer, noticeably reduces sales opportunities. In addition, foreign markets are increasingly focusing on residue pathways, which further limits demand for energy crop biomethane.
Outlook for 2026
Looking ahead to 2026, demand for pathways with a particularly strong climate impact is set to keep growing. With the switch of its system to emissions-based criteria (Bijmengverplichting, the blending obligation), the Netherlands is already setting an important course in 2026. Similar developments are also underway in the United Kingdom.
This creates diverse and rapidly growing sales opportunities for manure pathways. Residue pathways also benefit, albeit to a lesser extent. Producers of energy crop biomethane, on the other hand, remain highly dependent on German legislation. A possible Biomass Package 2.0 could provide important impetus here, in particular to secure existing production capacity and keep it economically viable.