During the recent Eurogas conference, the EU pitched the idea of extending demand aggregation to the European biomethane sector. However, further details and additional actions are needed to stimulate the market.
On 25 March 2025, Maciej Ciszewski of DG-ENER stated that the EU aims to strengthen energy security via domestic production, which places biomethane (as well as green hydrogen) in the discussion. It was proposed that the AggregateEU mechanism could be extended to cover biomethane.
AggregateEU is the EU demand aggregation and joint purchasing mechanism, developed in accordance with the gas purchasing emergency regulation (2022/2576), one of the measures introduced to mitigate the fallout from the 2021-22 energy crisis.
The key aim was to promote sufficiency by ensuring equal treatment and preventing market manipulation, while matching EU buyers and sellers. It was viewed as helpful to smaller entities (land-locked countries and companies) that may lack resources/economies of scale to receive better prices, particularly for LNG.
Regulation 2022/576 lapsed at the end of 2024, with the second mid-term matching round for the AggregateEU platform taking place on 12 March 2025. While it is unlikely to be revived for fossil natural gas – given the return to more stable price levels – Ciszewski’s statement suggests the EU is open to extending the mechanism to renewable energy sources in support of the REPowerEU goals.
Development of production and demand has been uneven across Europe. While certain countries have made great strides in the last few years, France and Italy in particular, many others still lack appreciable production capacity despite the availability of feedstock waste streams.
Moreover, some established markets have stagnated. Germany has not seen appreciable growth in production close to a decade while Denmark, despite having the highest biomethane grid share in Europe, experienced a slight decline in 2024 (from 38.7% in 2023 to 38% in 2024).
Distress in the Irish biomethane industry was highlighted during March 2025. With no domestic production support available, producers rely on the local transport obligation scheme for compensation. However, cheap biofuel imports have suppressed demand for biomethane under this scheme. There have been calls for the local government to step in to purchase the excess biomethane output.
Implementing the AggregateEU mechanism for biomethane could potentially alleviate some of these issues by lowering the barriers for market entry, particularly for smaller international purchasers.
Unlike natural gas, which is a homogenous product, biomethane can vary in quality due to green attributes. Characteristics including support status (investment and production), country of origin, feedstock and sustainability certification all affect potential application and as a result, market value.
Product fragmentation will likely be one of the main barriers to implementing AggregateEU in the European biomethane market. There is currently no widely accepted benchmark product for biomethane. However, some measures are being taken to address fragmentation in both products and transactions:
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