Unlocking Green Energy in a Continent of Abundance

South America - a continent blessed with rich natural resources and confronting the twin challenges of rapid urbanisation and climate change - is on the brink of a biomethane transformation. While regions such as Europe and North America boast mature biomethane markets and well-established certification systems, South America represents a burgeoning frontier with immense and largely untapped potential for renewable gas production. Expansive agricultural zones, fast-growing urban centres producing substantial organic waste, and the increasing urgency for energy diversification and decarbonisation are creating fertile conditions for biomethane development. However, to unlock this potential, a clear understanding of the region’s emerging regulatory and certification frameworks is essential.

This article examines the dynamic biomethane landscape across South America, spotlighting the most advanced countries, the innovative integration of biomethane into their energy matrices, and the early-stage development of certification mechanisms. We explore the drivers and barriers specific to the region and demonstrate how firms such as AFS Energy - with global trading experience - can serve as vital connectors between emerging supply and international demand for green energy attributes.

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The South American Biomethane Landscape: A Continent Full of Promise

South America’s extraordinary wealth of biomass makes it exceptionally well-suited for biomethane production. Key feedstocks include:

• Agricultural Residues: Sugarcane by-products (especially in Brazil), livestock manure, and crop residues from major agricultural activities like soya, maize, and more.
• Municipal Solid Waste (MSW) & Wastewater: Expanding urban populations generate vast amounts of organic waste and sewage sludge, which serve as ideal feedstocks for biogas.
• Agro-industrial By-products: Waste from food processing, ethanol distillation, and other agricultural industries.

Primary Drivers of Biomethane Development

• Waste Management & Public Health: Biogas technologies offer a sustainable solution for handling organic waste, reducing methane emissions from landfills, and improving sanitation.
• Energy Security & Diversification: Biomethane can reduce dependence on fossil fuels and buffer against volatile international energy prices through domestic energy production.
• Transport Decarbonisation: With growing urban populations and increasing freight activity, biomethane presents a clean fuel alternative for public transport and heavy logistics.
• Climate Commitments: Many South American nations are parties to international climate accords and have set national decarbonisation targets, with biomethane forming a critical part of the solution.

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Leading Countries and Emerging Markets

• Brazil: The undisputed regional leader. Brazil’s biomethane sector is expanding rapidly, particularly using sugarcane vinasse and livestock waste. Biomethane is increasingly utilised for industrial heat, electricity, and vehicle fuel. Brazil has also pioneered its own biomethane certification framework.
• Argentina: With abundant agricultural potential, Argentina is exploring biogas to serve rural energy needs and improve waste management. Policies to support biomethane production and grid injection are evolving.
• Colombia: Focused on biogas for rural electrification and sanitation, Colombia is now showing interest in biomethane for industrial and transport applications.
• Chile: Although smaller in scale, Chile is integrating biogas into its broader renewable strategy through projects based on municipal waste and wastewater.

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Certification and Credit Mechanisms: A Work in Progress

Unlike the EU’s standardised Guarantees of Origin (GO) or North America’s multilayered credit systems, South America’s biomethane certification landscape remains under development. It is defined largely by country-specific schemes, voluntary initiatives, and a growing focus on traceability.

1. Brazil’s Gas-RECs

• Brazil has introduced Gas-RECs (Renewable Energy Certificates for Gas), mirroring the function of electricity RECs by tracking the environmental attributes of biomethane.
• These certificates aim to enhance transparency, prevent double counting, and enable companies to credibly report emissions reductions linked to biomethane consumption.
• Though still relatively new, Gas-RECs are expected to play a pivotal role in both voluntary and future compliance markets in Brazil.

2. Voluntary Carbon Markets and International Standards

• In the absence of widespread national biomethane mandates, many South American projects tap into voluntary carbon markets, generating credits such as Verified Carbon Units (VCUs) under Verra or credits under Gold Standard schemes.
• While not biomethane-specific “tickets” in the European sense, these verified credits represent the climate value of avoided emissions and provide access to a global sustainability marketplace.

3. Emerging National Policies and Incentives

• Some countries have begun to lay the regulatory foundations for a future biomethane economy:
  • Feed-in tariffs and subsidies to enhance financial viability.
  • Tax relief and exemptions for renewable gas usage.
  • Renewable energy targets, which biomethane can help meet.
  • Waste management legislation mandating the treatment of organic waste, thus indirectly encouraging biomethane production.

4. Proof of Sustainability and Traceability

• As in other regions, verifying the sustainability of biomethane production is essential. While EU RED II equivalents are rare, many projects align with global best practices for feedstock sourcing, emissions reduction, and social responsibility.
• The adoption of digital traceability systems - akin to those in Europe and North America - will be crucial for fostering transparency and scalability as the market matures.

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Biomethane in Compliance and Voluntary Markets

1. Emerging Compliance Potential

• Although blending mandates are not yet widespread, increasing pressure to decarbonise may spur their introduction, especially in transport.
• In countries with carbon pricing or emissions caps, biomethane verified through emerging certificates could help industries meet Scope 1 emissions requirements.

2. A Strong Voluntary Market

• The voluntary market is a key growth driver. Multinational and regional companies are seeking to procure verified green gas to demonstrate ESG leadership and meet sustainability targets.
• Purchasing biomethane, or associated Gas-RECs or carbon credits, enables firms to showcase measurable progress towards internal climate goals - attracting green capital and reinforcing brand credentials.

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Challenges and Opportunities in South America

Challenges:

• Regulatory Fragmentation: Inconsistent policies and lack of standardised credit systems hinder market development and investor confidence.
• Limited Access to Finance: Securing capital for large-scale anaerobic digestion projects remains challenging, particularly with local financiers unfamiliar with biomethane models.
• Infrastructure Gaps: Grid compatibility issues and the lack of widespread Bio-CNG/LNG fuelling networks limit deployment.
• Feedstock Logistics: Efficiently collecting and transporting organic waste from dispersed sources remains a logistical barrier.
• Political and Economic Uncertainty: Regional instability can present risks for long-term investments.

Opportunities:

• Vast Untapped Potential: Arguably the world’s largest underdeveloped biomethane resource.
• Climate Ambitions: Regional and national climate policies are strong enablers for green energy.
• Urban Waste Challenge: Biomethane aligns perfectly with the need for sustainable waste management in expanding cities.
• Energy Diversification: It offers an alternative to hydro (vulnerable to drought) and imported fossil fuels.
• Technology Transfer: South America can leapfrog development stages by adopting proven practices from Europe and North America.
• Domestic Demand Growth: Rising environmental awareness and demand from industry and transport sectors support a growing internal market.

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AFS Energy: Bridging the Biomethane Credit Gap

While AFS Energy’s core operations lie in Europe and the United States, its global outlook and deep understanding of credit systems make it a strategic ally for South American stakeholders.

AFS Energy’s Key Capabilities in South America:

• Market Advisory: Offering guidance on national policies, voluntary market access, and pathways for compliance - particularly around Brazil’s Gas-RECs.
• Global Voluntary Market Integration: Supporting the creation and monetisation of internationally recognised carbon credits from South American projects.
• Procurement Support: Assisting global firms operating in South America to source verified biomethane attributes in line with their net-zero strategies.
• Sustainability Assurance: Utilising robust certification standards (ISCC, Redcert, Better Biomass) to ensure traceability and environmental credibility.
• Market Intelligence: Delivering insights on feedstock economics, regional pricing, and policy developments to support strategic investment.
• Shaping Future Markets: Contributing to the design of emerging credit systems through advocacy and demonstration of successful biomethane transactions.

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A Continent Ready for Green Gas Growth

South America is on the threshold of a biomethane breakthrough. Its combination of abundant biomass, urgent urban sustainability needs, and climate commitments make it an ideal landscape for renewable gas development. While certification mechanisms remain nascent, initiatives like Brazil’s Gas-RECs and participation in voluntary carbon markets are paving the way for a robust and verifiable green gas ecosystem.

For organisations seeking to expand their green portfolios, South America represents a high-potential market. Unlocking this potential will require specialised expertise and access to global markets. With its international reach and technical know-how, AFS Energy stands ready to support the region’s transition - bridging emerging supply with global demand, and helping to build a more sustainable and resilient energy future across the continent.