By Lorenzo Maggioni.
From the speech at SMART GRID DAYS 2025 (8-9 October 2025), organised by Automa.
The European context: energy security and the acceleration of biomethane
In recent years, biomethane has assumed an increasingly central role in European energy strategies. Rising gas prices, also triggered by geopolitical tensions between Russia and Ukraine, have highlighted the need to diversify sources and reduce dependence on imports.
Within this framework, the REPowerEU plan has set an ambitious goal: to increase biomethane production to around 35 billion m³/year by 2030. Italy, through its own NECP, aims to achieve 5.7 billion m³/year by 2030, focusing primarily on the conversion of existing biogas plants and the development of new plants.
Figure 1 – Combined biogas and biomethane production and number of plants in Europe (Source: EBA Statistical Report 2024).
Biogas and biomethane in Europe: plant trends and prospects
The European system starts from a plant base historically oriented towards electricity production from biogas. For many years, anaerobic digestion has been driven by incentive schemes linked to electricity generation, with Germany and Italy as the reference markets in terms of the number of plants and the maturity of the supply chain.
Today the trend is different: while the number of new biogas plants for electricity generation tends to stabilise, the number of plants (new or converted) intended for the production of biomethane through upgrading is constantly growing. The expected trajectory in the coming years is therefore a progressive shift in production from biogas ‘power’ to biogas ‘gas’ (biomethane), with increasing integration into networks and end markets.
Biomass and feedstock: evolution of input matrices
The composition of biomass used for anaerobic digestion is a key indicator of the evolution of the sector. In Europe, the predominant share comes from agricultural resources, a category that includes both dedicated crops and, increasingly, livestock effluents and agricultural and agro-industrial by-products.
Historically, especially in the early years of its development, anaerobic digestion in agriculture has relied significantly on energy crops (e.g. corn silage), sometimes in monoculture or double cropping regimes. With the progressive refinement of sustainability criteria and the evolution of policies, the sector has reduced the incidence of dedicated crops, increasing the use of wastewater and by-products, with benefits both environmental and territorial acceptability.
In electric biogas, in addition to agricultural sources, landfill gas plays a significant role. In biomethane, however, the role of landfills is limited (due to the greater complexity of purification), while OFMSW (Organic Fraction of Municipal Solid Waste) assumes increasing importance. In Italy, there are industrial-scale plants powered by OFMSW, with production in the order of thousands of m³/h.
Figure 2 – Distribution of European biogas and biomethane production by type of plant (Source: EBA Statistical Report 2024).
The Role of Incentives: Why the Market Grows in Spurts
As was the case with biogas electricity in the initial phase, the development of biomethane is also strongly correlated with the presence of support mechanisms. Historical data show that production growth has occurred most rapidly in countries that have established stable and bankable incentive schemes.
Germany was the first to launch a structured biomethane industrial supply chain; Denmark, the United Kingdom, and France subsequently achieved significant growth thanks to dedicated national policies. At this stage, Italy is contributing increasingly, especially as a result of the Ministerial Decree of 15 September 2022, which has activated a large portfolio of projects in the ranking.
Figure 3 – Growth in biomethane production in Europe by country (Source: S&P study, as reported in the presentation).
Goals for 2030: NECP, production gap and new decrees
To outline medium- to long-term trajectories, it is useful to refer to the national NECPs, which set targets for 2030 in terms of biogas and/or biomethane production. In the Italian case, the target is 5.7 billion m³/year.
The Ministerial Decree of 2 March 2018 supported the production of biomethane for transport (advanced biofuel), bringing production to values close to 800 million m³/year. With the Ministerial Decree of 15 September 2022 (‘Ter’ biomethane), the total quota is 257 thousand Sm³/h, approximately 2.1 billion m³/year, allocated through five competitive procedures.
Based on the progress made in obtaining authorisations and implementing the projects, it is realistic to expect full-scale production in the order of 1.6-1.8 billion m³/year for this decree. This results in a gap with respect to the NECP target, which makes the introduction of a further measure (often referred to as ‘Quater biomethane’) plausible to support growth in the second part of the decade.
Figure 4 – Biomethane targets in European NECPs and production potentials by 2030 (Source: presentation table, based on NECP data).
Access to gas networks: European principles and operational challenges
Injecting biomethane into the grid is a key step in scaling up the sector, but it requires clear rules and efficient procedures. The new European framework for decarbonised gas markets (Directive (EU) 2024/1788 and Regulation (EU) 2024/1789) strengthens the principles of non-discriminatory and transparent access to infrastructure.
In practice, network operators are required to manage connection requests according to defined and public technical and economic criteria. Any denials or limitations must typically be motivated by infrastructure safety constraints or economic efficiency considerations, within a perimeter subject to the oversight of the National Regulatory Authority (NRA), which can intervene in the event of disputes.
However, an element of fragmentation remains: gas quality requirements for injection are not yet fully harmonised at European level. Differences between countries in parameters such as oxygen, CO2, sulphur, or odorisation impact upgrading design, costs, and, in some cases, the replicability of standard solutions.
Figure 5 – Network connection process for biomethane projects: phases and principles (Source: EBA, 2024).
Gas quality: variability of national limits
The following tables highlight the differences between national gas quality specifications in different European countries. For the operator, these deviations translate into different design requirements (e.g. on oxygen control and sulphur compounds management), with impacts on CAPEX, OPEX and operational reliability.
Figure 6 – Examples of quality requirements for network injection in some European countries (Source: Marcogaz, 2023).
The Italian case: installed base, transition and regulatory pillars
Italy is Europe’s second-largest biogas market, with approximately 2,000 electric plants and an installed capacity of around 1,350 MW. At the same time, approximately 150 biomethane plants are operational, with a production of close to 800 million m³/year (MD 2018 scope).
A strategic issue is linked to the life cycle of historical incentives: over 1,100 electrical systems built with particularly favourable tariffs (e.g., 0.28 EUR/kWh, with a 15-year duration and entry into production between 2009 and 2012) will reach the end of their incentive period in 2027. Without transition tools, a significant portion of plants risks exiting the market.
In this context, the legislator has chosen to orient the supply chain towards the production of biomethane, introducing two key decrees (MD 2/3/2018 and MD 15/9/2022) and completing them with further provisions and technical standards. In particular, today the sector is based on three pillars: Ministerial Decree 09/15/2022 (incentives), MD 224/2023 (Guarantees of Origin) and Legislative Decree 63/2024 (contractual instruments and integration with industrial demand).
Figure 7 – The three regulatory pillars of biomethane in Italy: incentives, GOs and contractual instruments.
Ministerial Decree 15/09/2022: incentives, competitive procedures and NRRP
The Ministerial Decree of 09/15/2022 provides for two incentive methods: an all-inclusive tariff and a premium tariff, depending on the sale/collection configuration. Access is via competitive procedures (auctions), and the total allocable quota is equal to 257 thousand Sm³/h, equivalent to approximately 2.1 billion m³/year.
A highly attractive element is the NRRP’s capital incentive, up to 40% of the investment cost within the established ceilings. Furthermore, the decree extends the intended use of biomethane to applications other than transportation, opening up the industrial market in a more structured way.
In competitive procedures 3-5, the reference tariff is 124.48 EUR/MWh (value indicated by the decree and the application procedures). The result is a portfolio of 554 ranked projects, which has employed approximately 90% of the available quota.
Figure 8 – Summary of projects in the ranking (MD 09/15/2022): number, capacity, types and territorial distribution.
GO and industrial demand: MD 224/2023 and LD 63/2024, art. 5-bis
Ministerial Decree 224/2023 regulates the issuance of Guarantees of Origin (GO) for biomethane. The GO is an electronic certificate that attests to the renewable origin of production: in the absence of a GO, the gas fed into the network is indistinguishable — in terms of “claims” — from fossil gas.
The LD 63/2024 (known as the ‘Agriculture Decree’), in Article 5-bis, introduces the possibility of bilateral agreements between agricultural biomethane producers and hard-to-abate industries. In this configuration, GO can be transferred to the final consumer, with potential applications within the ETS scope as a tool for decarbonisation and, in fact, industrial competitiveness. In practice, part of the economic benefit can be shared along the supply chain, contributing to the bankability of the projects.
UNI technical standards: gas quality and sustainability criteria
On a technical level, UNI/TS 11537:2024 defines requirements and verification methods for the quality of biomethane intended for injection into the network. UNI/TS 11567:2024, on the other hand, details the criteria and methods for calculating sustainability, with particular attention to the reduction of climate-altering emissions (GHG) along the entire supply chain.
To qualify for incentives, biomethane must demonstrate a reduction in emissions compared to benchmarks: for transport, the benchmark is 94 gCO₂eq/MJ with a minimum reduction of 65%; for other end uses, the benchmark is 80 gCO₂eq/MJ with a minimum reduction of 80%.
Figure 9 – Comparison of national gas quality specifications in Europe (Source: Marcogaz, 2023).
Conclusions: an accelerating supply chain
The European regulatory framework (RED III and Gas Package) and the evolution of national instruments are making the growth context for biogas and biomethane more defined. In Italy, the large base of biogas power plants provides a unique opportunity to accelerate the conversion to biomethane and contribute substantially to the NECP and European targets.
The combination of incentives (MD 15/09/2022), traceability and valorisation tools (GO), and new contractual models with industrial demand opens up concrete development prospects. This is accompanied by economic and employment effects, with an expected increase in green jobs along the entire value chain: plants, agricultural supply chains, services, engineering, and the technology industry.
Figure 10 – Evolution of decrees and targets for 2030 (source: summary slide from presentation).
Senior Advisor and Biomethane Expert
Lorenzo Maggioni, PhD, is an Italian agronomist and senior advisor with over 20 years of experience in the renewable energy sector, specialising in biogas, biomethane and bioLNG. Formerly head of research and development and biomethane manager at the Italian Biogas Consortium (CIB), he has led EU projects (BIOSURF, REGATRACE, SABANA, ISAAC) and contributed to the Italian policy framework on biomethane. Today, he advises investment funds, energy companies and institutions on plant development, sustainability certification and regulation. He has collaborated with the Italian National Research Council, lectures at the Rome Business School and speaks internationally, promoting sustainable biomethane solutions for energy transition and decarbonisation.
