Bridging Borders with Biomethane’s Green Attributes

The global energy transition is a multifaceted and transnational endeavour. As biomethane increasingly gains recognition as a vital decarbonisation tool across continents, the need to facilitate international trade and ensure transparent claims becomes ever more pressing. While regions such as the EU, North America, the UK, and even emerging South American markets are developing robust - albeit distinct - “biomethane ticketing” frameworks (such as Guarantees of Origin (GOs), Renewable Identification Numbers (RINs), Low Carbon Fuel Standard (LCFS) credits, or Gas-RECs), this fragmentation presents both formidable challenges and significant opportunities for establishing a truly global green gas economy.

This article explores the intricate global network of biomethane credit systems. It examines the current patchwork of regional certification mechanisms, the obstacles this diversity poses for international trade and coherent decarbonisation claims, and the collective movement towards harmonisation and interoperability. We also highlight the essential role that firms such as AFS Energy, with their multinational footprint and deep regulatory expertise, play in bridging these gaps and propelling biomethane towards its potential as a globally traded environmental commodity.

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The Patchwork Quilt: Regional Biomethane Credit Systems

As discussed in previous articles, the biomethane sector has developed organically, resulting in a broad range of mechanisms for tracking and certifying its green credentials:

• European Union (EU-27): Guarantees of Origin (GOs)

• Mechanism: Electronic certificates representing 1 MWh of renewable gas, issued by national registries in accordance with the Renewable Energy Directive (RED II/III).
• Primary Use: For reporting renewable energy consumption, fulfilling voluntary targets, and increasingly, for complying with national blending mandates across heating and industry.
• Registry: The European Renewable Gas Registry (ERGaR) supports cross-border transfers within the EU.
• Sustainability: Linked to strict Proof of Sustainability (PoS) requirements.

• United Kingdom (UK): RTFCs and GGCs/RGGOs

• Mechanism: Renewable Transport Fuel Certificates (RTFCs) for transport fuels under the Renewable Transport Fuel Obligation (RTFO), and Green Gas Certificates (GGCs or RGGOs) for grid-injected biomethane in heating and industrial sectors, managed by the Green Gas Certification Scheme (GGCS).
• Primary Use: RTFCs are used for compliance with transport fuel mandates; GGCs serve voluntary green gas claims.
• Post-Brexit Context: Distinct from EU GOs, with no automatic mutual recognition.

• North America (USA & Canada): RINs, LCFS Credits, and CFR Credits

• Mechanism:
  • RINs: Issued under the EPA’s Renewable Fuel Standard (RFS), categorised by D-codes (e.g., D3 for cellulosic biomethane, D5 for advanced biofuels).
  • LCFS Credits: Issued under state-level programmes (California, Oregon, Washington) for fuels with low carbon intensity (CI).
  • CFR Credits: Canada’s Clean Fuel Regulations incentivise reductions in fuel CI.
• Primary Use: For meeting regulatory obligations and stimulating low-carbon fuel production.
• Distinctive Feature: Allows “stacking” of credits (e.g., earning both RINs and LCFS credits), substantially enhancing economic returns.

• South America: Emerging National Frameworks and Voluntary Carbon Markets

• Mechanism: Development of national certification schemes (e.g., Brazil’s Gas-RECs), alongside active participation in voluntary carbon markets such as Verra’s VCS and Gold Standard.
• Primary Use: Monetising GHG reductions for corporate climate targets and offset markets.
• Outlook: Increasing development of domestic policies and ticketing systems, with potential convergence towards international standards.

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The Challenges of Fragmentation: A Global Jigsaw Puzzle

While each regional system has evolved to meet local policy objectives, their lack of alignment poses several issues:

1. Barriers to International Trade
   The absence of mutual recognition between credit systems (e.g., EU GOs not valid for RFS compliance in the US) restricts the seamless transfer of green gas attributes across borders, limiting market fluidity.
2. Administrative and Financial Complexity
   Multinational organisations must navigate disparate systems, requiring dedicated teams for legal compliance, IT infrastructure, and operational procedures, increasing transaction costs and complexity.
3. Risk of Double Counting
   Without clear cross-registry coordination, there remains a theoretical risk that the same unit of biomethane could be claimed in multiple jurisdictions, eroding confidence in the market.
4. Inconsistent Decarbonisation Accounting
   Divergent methodologies for lifecycle emissions and CI calculations challenge companies aiming to report consistent global progress. The Greenhouse Gas Protocol is working to address this via updated biomethane guidance.
5. Investment Uncertainty
   Investors are cautious in the face of market fragmentation, given the difficulty of assessing long-term project value without a globally accepted framework for biomethane certification.

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Opportunities for Harmonisation and a Unified Market

Despite these challenges, multiple pathways are emerging to harmonise biomethane ticketing frameworks and enable global green gas trade:

1. International Standardisation and Collaboration

• Bodies such as the IEA, World Biogas Association (WBA), and European Biogas Association (EBA) are advocating for aligned definitions and methodologies.
• The evolving GHG Protocol guidance will be key to facilitating global biomethane accounting.
• Article 6 of the Paris Agreement may, in time, provide mechanisms for transnational GHG reductions from biomethane.

2. Digital Solutions and Blockchain Integration

• Digital registries (e.g., ERGaR) and blockchain technologies offer secure, transparent tracking of credit issuance and transfer.
• Blockchain’s decentralised, immutable nature could enable direct links between national systems and reduce fraud or double claims.

3. Bilateral Agreements and System Bridges

• Interim solutions include bilateral or regional agreements for mutual recognition.
• Industry-led “bridges” between registries may support the transfer of environmental claims even where credit types differ.

4. Voluntary Markets as Connective Tissue

• Voluntary carbon markets already act as a global conduit for biomethane environmental value.
• These platforms facilitate international monetisation of verified GHG reductions, particularly in jurisdictions with less mature domestic schemes.

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The Strategic Importance of Global Biomethane Trade

A harmonised international market for biomethane certificates is essential for:

• Accelerating Decarbonisation: Unlocking investment and creating stable revenue streams for producers globally.
• Enhancing Energy Security: Facilitating renewable gas supply diversity and reducing dependence on volatile fossil imports.
• Optimising Resource Efficiency: Allowing biomethane to be produced where it is cheapest and cleanest, and consumed where it is most needed.
• Meeting Net-Zero Commitments: Especially in hard-to-electrify sectors, biomethane is a critical lever in corporate and national climate strategies.

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AFS Energy: A Global Navigator in Biomethane Ticketing

In today’s complex and evolving global marketplace, AFS Energy is uniquely positioned to bridge regional divides. With active operations across Europe, the USA, and key markets including the Nordics and UK, AFS Energy’s team of eight full-time biomethane specialists is dedicated to navigating transport, heating, EU ETS, and voluntary markets.

AFS Energy’s Key Capabilities:

• Multi-Regional Market Access: Offering access to EU GOs, UK RTFCs/GGCs, US RINs/LCFS credits, and voluntary market platforms.
• Cross-Border Compliance: Supporting clients in meeting divergent regulatory requirements with tailored guidance.
• Strategic Procurement: Leveraging regional price arbitrage to develop optimal acquisition and sales strategies.
• Sustainability Assurance: Backed by ISCC, Redcert, and Better Biomass certifications to guarantee the integrity of traded biomethane.
• Intelligence & Advisory: Providing up-to-date insights on policy trends, pricing, and risk in international markets.
• Compliance–Voluntary Bridging: Aligning regulatory compliance with ESG targets to support holistic decarbonisation strategies.

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Towards a Unified Green Gas Future

The global biomethane ecosystem, though fragmented today, is steadily advancing towards interoperability. Demand is growing rapidly, with targets such as REPowerEU’s 35 bcm by 2030 underscoring the urgency. A unified, efficient credit trading system will be pivotal in achieving global energy and climate goals.

Industry leaders seeking to navigate this transition must not only understand regional systems but connect them. Partnering with an expert like AFS Energy enables organisations to traverse regulatory boundaries, unlock hidden value, and contribute to a cohesive, sustainable, and resilient energy future.