A unified European biomethane market is essential to unlocking the full potential of biomethane as a mainstream decarbonisation instrument and strengthening the continent’s energy independence. An integrated market depends on a transparent and reliable system for transferring information across national borders. Open cross-border trade is not only key to EU integration and energy security, but also vital for meeting decarbonisation targets and ensuring economic stability.

The core requirement for effective cross-border trading is the mutual recognition of biomethane’s “green” value, its renewable, low-emission, and environmentally beneficial attributes, by the importing country, allowing it to contribute towards national quotas or sustainability targets.

Fragmentation in Europe’s Biomethane GO Systems

Despite its promise, Europe’s biomethane market remains fragmented, often described as “unruly” and “still in its infancy.” This fragmentation stems from the coexistence of multiple, often siloed tracking systems, creating a complex and inconsistent regulatory landscape that requires localised expertise for effective navigation and trading.

• The European Renewable Gas Registry (ERGaR) has developed a robust Certificate of Origin (CoO) framework for grid-injected biomethane. It is gaining traction in key biomethane markets such as the UK, the Netherlands, Denmark, and Germany, offering a practical solution for tracking biomethane across borders.
• In contrast, the Association of Issuing Bodies (AIB) focuses primarily on Guarantees of Origin (GOs) for renewable electricity. Its recent expansion into renewable gases has added complexity, placing biomethane in a sort of regulatory limbo. While AIB’s system has proven highly efficient for electricity, its application to renewable gases is not yet fully harmonised.

This divergence leads to several key challenges for stakeholders:

1. Limited Liquidity and Market Confusion

The divide between ERGaR and AIB restricts market liquidity and creates confusion for producers and buyers alike regarding which system to use, and when. This fragmentation can result in duplicated efforts, inefficiencies, and the creation of sub-markets within an already niche industry.

2. Barriers to Cross-Border Trade

The lack of interoperability between ERGaR’s CoOs and AIB’s GOs complicates cross-border transfers. Transactions that should take 5–10 working days can stretch to 25 days or more, increasing administrative burdens, raising transaction costs, delaying revenues, and causing businesses to miss critical market opportunities.

3. Union Database (UDB) Implementation Challenges

The Union Database (UDB), mandated under RED II and strengthened under RED III, was designed to centralise tracking of biofuels, bioliquids, and biomethane across the EU. However, its implementation has proven difficult, hindered by:

• Different national interpretations
• Legacy IT infrastructure
• Poor integration with existing registries
• Limited guidance from central authorities

If not properly integrated with ERGaR and AIB, the UDB risks becoming a third silo, exacerbating fragmentation rather than solving it. Moreover, cross-registry transfers are often cumbersome or impossible, requiring manual inputs that increase the risk of human error and dilute traceability.

4. Unclear Certification for BioLNG

The certification and traceability of BioLNG, a vital renewable fuel for transport, remain ambiguous. No clear digital pathway exists for converting a biogas Point of Sale (PoS) to a bioliquids PoS. Furthermore, PoS entries cannot currently be extracted from the UDB, limiting flexibility for economic operators and deterring investment.

5. National Disparities

National registry and trading rules differ considerably. For example:

• In Germany and Austria, only national electricity suppliers may cancel GOs.
• Spain’s Enagás integrates biomethane and hydrogen tracking, using AIB.
• France utilises the EEX platform for both electricity and gas, easing auctions but struggling with inter-registry transfers.
• Norway, though a key BioLNG player, lacks a national gas grid and registry, complicating UDB participation due to non-EU status.

These discrepancies mean a “one-size-fits-all” approach is impractical. Companies must develop localised strategies to address market access and compliance.

The Cost of Fragmentation

The current lack of a standardised and interoperable GO system creates commercial uncertainty, impeding market growth and investment. Without the seamless transfer of biomethane’s green value across borders, transaction costs rise, risks of double counting increase, and investor confidence wanes. As a result, the EU’s goal of reaching 35 bcm of biomethane production by 2030 could be undermined by systemic inefficiencies in certification and traceability.

Emerging Solutions and Collaborative Progress

Despite these hurdles, several promising developments are working to resolve market fragmentation and create a more unified trading environment:

1. National Registry Cooperation

Six national registries have signed a Letter of Intent to harmonise methodologies, facilitate data exchange, and ensure mutual recognition of GOs. This collaboration aims to streamline cross-border transactions by establishing standardised data sets and protocols.

2. Industry Dialogue and Policy Support

Discussions between the European Biogas Association (EBA) and the GHG Protocol are ongoing to define how GOs and Proofs of Sustainability (PoS) are treated. Policy efforts are also underway to:

• Simplify permitting
• Clarify financial incentives
• Expand biomethane certification
• Strengthen cross-border traceability frameworks

3. Strengthening Traceability through the UDB

The UDB aims to function as a centralised compliance mechanism to prevent fraud and double counting. All biomethane counted towards EU sustainability targets must be registered in the UDB, providing a single, verifiable source of truth, provided it is fully integrated with national systems.

4. Voluntary Certification Schemes

Voluntary schemes such as ISCC, SURE, and REDcert are aligning with RED III to offer verifiable claims and ensure market trust. However, recent scrutiny by the European Commission into alleged false sustainability claims by ISCC underscores the fragility of trust in voluntary markets. It highlights the urgency for stronger verification standards, reinforced auditing, and harmonised rules for GO recognition.

The credibility of GOs, and the willingness of businesses to pay a premium for certified biomethane, depends on the robustness of these schemes.

Best Practices for Businesses

To navigate this evolving landscape, businesses should:

• Engage with experienced market participants who understand national registry systems and cross-border transfer procedures.
• Prioritise biomethane with RED III-aligned certification (e.g. ISCC, SURE, REDcert) to ensure compliance and avoid greenwashing risks.
• Establish internal systems for tracking and validating origin, GO transfers, and PoS data.
• Monitor UDB developments and registry harmonisation efforts to remain agile and compliant as new standards are introduced.

AFS Energy’s Role in Supporting Market Integration

AFS Energy plays a key role in navigating the fragmented European biomethane market. The company provides:

• Specialist insight on regulatory frameworks such as ERGaR, AIB, and the UDB
• End-to-end compliance support, including logistics, certification validation, and document management
• Trading infrastructure that facilitates efficient cross-border GO transfers
• Support with EU ETS business cases for biomethane switching, outlining both environmental and financial gains

With a strong global supply network and advanced advisory capabilities, AFS Energy empowers clients to access high-quality, traceable biomethane and manage regulatory complexity with confidence. The firm’s ability to provide transparency, reduce transaction risk, and streamline operations is a critical differentiator in today’s volatile market environment.

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The unification of Europe’s biomethane market is pivotal for scaling decarbonisation efforts and achieving energy security. While challenges persist due to fragmented tracking systems and national disparities, collaborative efforts and expert support, such as that provided by AFS Energy, are charting a path towards a more transparent, liquid, and harmonised market.

By embracing interoperability, robust certification, and integrated digital infrastructure, the European biomethane sector can fully realise its potential, delivering clean energy, supporting sustainability targets, and enabling businesses to make credible and impactful climate commitments.