The promise of renewable gas

The EU aims at a “climate neutral” economy in 2050. Net emissions of CO2 must be reduced to zero. This is a formidable challenge.

It implies that natural gas, a fossil fuel, will have to be phased out altogether. Not an easy task. Today over 20% of all the energy we use in Europe – to produce electricity, to power our transport and industry and to heat our buildings – is supplied by natural gas. Natural gas is particularly important in heating and cooling: it supplies over 40% of the heat we use in our buildings.

For natural gas there are essentially three alternatives:

  • It can be displaced altogether, for example replaced by electricity, as when a gas boiler is replaced by an electric heat pump in a building, or simply made unnecessary by energy saving.
  • It can be “decarbonised”, namely by converting it into hydrogen, while capturing the CO2 and storing it underground.
  • Or it can be replaced by some form of “renewable gas”.

Most experts agree that to remove gas altogether and go for 100% electrification would be prohibitively expensive, if it can be done at all, even if in combination with very high energy savings. It would mean that electricity grids and battery storage would have to be massively expanded at huge cost.

That is why hydrogen and “renewable gas” are seen as attractive additional options to decarbonise the gas system.

In this section we look at the possibilities of “renewable gas”, including renewables-based hydrogen. For more on hydrogen: see the section Hydrogen – the missing link in the energy transition.


Researchers distinguish three types of renewable gas:

  • Biogas
  • Biomethane
  • Power-to-gas (renewables-based hydrogen)

Biogas is produced from organic material, for example agricultural waste, sewage, organic waste or energy crops, usually through a process known as anaerobic digestion.

Biogas consists mostly of methane (50-65%) and CO2 (up to 50%). Although burning biogas emits CO2, biogas is still considered “climate neutral”, because the CO2 that is released was captured from the atmosphere a short time before.

The production of biogas in Europe has grown strongly since the mid-2000s. The number of biogas plants grew from 6,227 in 2009 to 17,783 at the end of 2017, according to 2019 figures from the European Biomass Association.  . These plants produced 63 TWh of electricity, or roughly 2% of total EU electricity production, equating to an installed capacity of roughly 10 GW.

Germany is by far the largest market, with some 9,500 plants, followed by Italy. However, as a result of changed incentives, growth seems to have stalled recently in the German market.

Although biogas can be an important source of energy locally, its ultimate potential in the European energy system may be limited by the availability of sustainable affordable feedstock, as researcher Martin Lambert of the Oxford Institute for Energy Studies (OIES) points out in a research paper (Biogas: A significant contribution to decarbonising gas markets?, June 2017).

Lambert concludes from his research that:

  • Production of biogas from waste, which otherwise would have decomposed and released both methane and CO2 to the atmosphere, appears an uncontroversial, low cost route to reduce carbon emissions. 
  • Production of biogas from energy crops can also be beneficial, particularly where feeding a limited quantity of energy crops together with waste can enhance the production process. Care needs to be taken, and further research is required, to ensure that the land-use change implications are well understood and the growth of energy crops is not detrimental to other uses of the land. 
  • The most cost-effective option is to use biogas near the point of production to meet local requirements for heat and/or power. 
  • The scale of production will not replace the current level of fossil-derived natural gas consumption, but use of biogas will enable continued utilisation of the existing natural gas infrastructure as the energy system decarbonises. In Europe, for example, biogas production could reach the equivalent of 50 billion cubic metres (bcm), more than 10% of current European gas demand.

More information can also be found on the websites of the European Biogas Association and the World Biogas Association.


Biomethane is usually produced by upgrading biogas, which involves separating the methane from the CO2 to achieve a product that can be used directly in the existing natural gas grid.

Biomethane can also be obtained directly by gasification of biomass (e.g. wood or agricultural residues) or municipal solid waste. This is also called bio-SNG (synthetic natural gas).

Biomethane production has also grown quickly in Europe, from 187 plants in 2011 to 540 at the end of 2017, according to 2019 figures from the European Biomass Association. . Germany is the largest producer, followed by the UK, Sweden, Denmark and the Netherlands. However, total biomethane production is only around 0.4% of total natural gas consumption in Europe, according to research from Martin Lambert of the Oxford Institute for Energy Studies (OIES).

The advantage of biomethane over biogas is that it can be used directly into the gas grid.

Estimates for the overall potential of biomethane and biogas in Europe vary greatly. According to a study by consultancy Ecofys, “Gas for Climate”, published in 2018, and commissioned by a group of European gas network companies, Europe could produce around 98 bcm of biogas and biomethane in 2050. Another study, from the International Council on Clean Transport, also from 2018, arrives at a much lower figure, 36 bcm. Current consumption of natural gas in Europe is around 465 bcm.


The term “power-to-gas” refers to the conversion of electricity into gas. One way to do this is to use solar or wind power to produce hydrogen, through electrolysis. Hydrogen made in this way is a “green gas” and is often called “green hydrogen”.

The process can even be taken one step further: the hydrogen can be combined with CO2 to make methane, which has the same composition as natural gas and can be used as a direct substitute for it.

In an article published by the Oxford Institute for Energy Studies (OIES) in October 2018, “Power-to-Gas: Linking electricity and gas in a decarbonizing world?”, researcher Martin Lambert gives the following overview of the power-to-gas process:

Power to Gas schematic overview

The advantage of converting renewable electricity into “renewable gas” is that intermittent solar and wind power can be stored and used when it is needed. Hydrogen produced in this way can be used as a CO2-free transport fuel and to produce heat in industrial processes. It can also be used to generate electricity, either in power stations or in fuel cells. If the hydrogen is converted into methane, it can be used in the gas grid, which means the existing gas infrastructure can continue to be used.

But power-to-gas also has its drawbacks. It involves a loss of energy (of up to 30%) and the costs are still high. Nevertheless, it is expected that as renewable power capacity grows and power-to-gas installations become bigger, costs will go down.

Although power-to-gas is still in the demonstration phase, there are many different projects being carried out, for example:

  • Audi e-gas project at Werlte, Lower Saxony, Germany
  • Audi e-gas project at Allendorf in Hesse, Germany
  • The BioCat Project in Avedøre, near Copenhagen, Denmark
  • Three projects under the EU-funded Store & Go programme – in Germany, Switzerland and Italy

The hopes in the industry are that over the next few decades, power-to-gas will prove itself as a cost-efficient technology that can be scaled up to become a realistic alternative for natural gas.

Our renewable gas programmes

Masterclass Biogas

Masterclass Biogas

  • 7 May 2020
  • Brussels, Belgium