The Imperative for a Sustainable Energy Future and the Role of Market Mechanisms

The global drive towards sustainable energy is no longer a distant aspiration - it is a pressing necessity. With the accelerating impacts of climate change and geopolitical instability highlighting the vulnerability of fossil fuel dependency, industries and nations alike are urgently seeking scalable solutions for decarbonisation and energy security. Among the most promising options is biomethane - a renewable, highly adaptable gas offering a tangible route to a greener energy future.

Yet biomethane’s potential extends far beyond its immediate environmental credentials. Its transformative role in the energy transition is deeply linked to advanced market structures that monetise its green value through certified, tradable instruments. These systems of verifiable renewable gas certificates unlock a secondary market that incentivises production, ensures traceability, and allows businesses to credibly report and reduce emissions.

This introductory blog post explores biomethane’s journey from organic waste to a critical pillar of renewable energy systems. We will unpack how its environmental attributes are certified, tracked, and traded - creating meaningful opportunities for businesses to meet regulatory requirements, demonstrate sustainability commitments, and actively engage in the green economy. At the heart of this evolving market is AFS Energy - a trusted expert in environmental commodities - empowering organisations to fully realise the value of biomethane credits.

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Biomethane: From Organic Waste to Renewable Energy

Biomethane - often referred to as Renewable Natural Gas (RNG) - is a gaseous biofuel generated through the breakdown of organic matter. Unlike fossil-based natural gas, biomethane is derived from a steady, renewable supply of biological feedstocks, making it a truly sustainable energy source. Its molecular composition closely mirrors that of fossil gas, meaning it can seamlessly integrate with existing infrastructure.

The primary method of biomethane production is anaerobic digestion (AD) - a biological process where microorganisms decompose organic material in the absence of oxygen inside sealed digesters. Common feedstocks include:

• Agricultural residues (e.g. manure, crop waste).
• Food waste from domestic and industrial sources.
• Sewage sludge from wastewater treatment.
• Select energy crops such as maize silage.

This process produces raw biogas, primarily a mix of methane (CH₄) and carbon dioxide (CO₂). The biogas is then upgraded to remove impurities - such as CO₂ and hydrogen sulphide (H₂S) - to yield high-purity biomethane (typically >95% methane content). Once purified, this green gas can be:

• Injected into the national gas grid,
• Compressed or liquefied for use in transport (bio-CNG / bio-LNG),
• Utilised for industrial heating or electricity generation.

Beyond energy production, AD generates digestate - a nutrient-rich by-product that can be applied as organic fertiliser, reducing reliance on synthetic alternatives and contributing to a circular economy by returning nutrients to the soil.

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Why Biomethane is Key to Decarbonisation

Biomethane delivers multiple environmental and strategic benefits:

• Greenhouse Gas Reduction: By capturing methane from organic waste, biomethane prevents the release of a potent greenhouse gas. Its use displaces fossil gas, delivering considerable CO₂ savings and aiding Net Zero ambitions.
• Waste Management & Circularity: Biomethane provides a sustainable outlet for organic waste, diverting material from landfill and reducing associated emissions and environmental impacts.
• Energy Security: As a domestically produced resource, biomethane reduces reliance on imported energy, enhancing national energy independence and resilience.
• Infrastructure Integration: Its chemical compatibility with natural gas means it can use existing pipelines, reducing the need for costly new infrastructure and speeding up deployment.
• Carbon-Negative Potential: Under optimal production conditions - particularly using manure as feedstock and with effective digestate management - biomethane can achieve a net-negative carbon footprint.

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Unlocking Value: The Emergence of Biomethane Trading

While the energy value of biomethane is tangible, its environmental value - the ‘green’ attribute - requires formal certification and traceability to be monetised. This is where biomethane trading comes into play. It involves issuing, tracking, and exchanging digital certificates that represent the renewable and sustainable characteristics of the biomethane produced and injected into the grid or used in specific applications.

These certificates perform several crucial roles:

• Proof of Origin and Sustainability: They confirm that a given volume of gas (typically measured in MWh or GJ) originates from verified renewable sources and meets defined sustainability criteria.
• Preventing Double Counting: Robust certification systems ensure that each unit of green gas is only claimed once, preserving the environmental integrity of the market.
• Tradability and Monetisation: Certificates convert biomethane’s environmental value into a tradable asset, offering producers a vital income stream beyond the sale of the physical gas.
• Compliance Support: In regulated markets, certificates enable companies to meet renewable fuel or emissions obligations without necessarily using the physical gas themselves.
• Voluntary Decarbonisation: For businesses aiming to cut Scope 1, 2, or 3 emissions, certificates allow for verified sustainability claims even when using non-segregated gas supplies.

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Types of Biomethane Certificates and Market Systems

Different regions utilise various certificate systems tailored to national policies and market applications. Key examples include:

• Guarantees of Origin (GOs): Used extensively across Europe to certify renewable gas origin. Systems like ERGaR (European Renewable Gas Registry) ensure cross-border standardisation. GOs typically have a one-year validity, although the UK allows three years and three months.
• Proof of Sustainability (PoS): Often accompanying GOs, PoS documents verify that production aligns with sustainability standards such as those in the EU’s Renewable Energy Directive (RED II).
• Transport Fuel Certificates: National schemes to promote renewable fuels in transport. Notable examples:
  • HBEs in the Netherlands,
  • THG-Quoten in Germany,
  • RTFCs in the UK—generated based on verified biomethane usage and traded on specialist platforms.
• Renewable Natural Gas (RNG) / Renewable Thermal Certificates (RTCs): Employed in North America for similar purposes.

Independent certification bodies such as ISCC, Redcert, and Better Biomass play a key role in verifying production sustainability. Meanwhile, the Greenhouse Gas Protocol is refining its standards to clarify how biomethane certificates are to be reported in emissions accounting, particularly for unsegregated supplies.

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AFS Energy: Your Strategic Partner in Biomethane Credit Markets

Mastering the complexities of biomethane certification and trading demands deep expertise - AFS Energy delivers just that. As a leader in environmental commodities, AFS Energy is firmly embedded in the biomethane sector, offering full-spectrum support for certificate procurement, trading, and verification.

Our strengths include:

• Certification Integrity: We hold ISCC, Redcert, and Better Biomass accreditations, ensuring trust and compliance across all transactions.
• Market Leadership: With operations across Europe and the United States, AFS Energy facilitated the trading of over 1.5 TWh of biomethane in 2024 alone.
• Dedicated Team: A team of eight full-time specialists focuses exclusively on biomethane—spanning transport, heating, ETS, and voluntary markets.

Our service offering empowers clients to:

• Fulfil Compliance Obligations: We assist with acquiring certificates such as HBEs, RTFCs, and GOs to meet blending mandates and sector-specific requirements.
• Optimise Procurement: Through market intelligence and price insights, we help secure competitive, long-term supply contracts.
• Engage in Voluntary Markets: We support companies in achieving and reporting ambitious CSR and ESG targets.
• Guarantee Traceability: All transactions are underpinned by robust verification and digital tracking, ensuring authenticity.

AFS Energy’s mission is to maximise value, minimise risk, and connect clients seamlessly to both compliance and voluntary markets - making biomethane credit management efficient, strategic, and impactful.

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The Future of Biomethane: Certificates as a Cornerstone of the Energy Transition

Biomethane’s future is both vibrant and critical. Output is expected to double between 2023 and 2027, driven by stronger policy frameworks - particularly in Europe. The REPowerEU plan’s goal of producing 35 billion cubic metres of biomethane annually by 2030 reflects the gas’s growing strategic importance.

At the core of this expansion are biomethane certificates. Far from being mere administrative tools, they are the financial and operational backbone of a maturing biomethane economy. These certificates enable investment, ensure transparency, and allow the environmental value of biomethane to flow fluidly across industries and borders.

In an era defined by sustainability, biomethane - supported by sophisticated certification and trading systems - is a linchpin of the global energy transition. AFS Energy is committed to leading this transformation, equipping clients with the knowledge, tools, and confidence to thrive in the biomethane credit market and advance towards a truly net zero energy system.