Green value from biomethane – what is driving the market?

Today, European biomethane producers attract a green premium in the market, primarily determined by corporate gas buyers pursuing ESG strategies. The future market value of biomethane will increasingly be driven by carbon prices in the EU ETS1 and EU ETS2, and beyond 2030, fuel obligation markets. We take a look at the market value for biomethane, exploring different methodologies to estimate the green premium, with reference to the actual traded certificate prices as tracked by Veyt.

Biomethane is physically indistinguishable from natural gas. We therefore view the value for biomethane as the physical (or natural gas) price, with a premium for the green attributes.Tracking green attributes Gas Guarantees of Origin (gGOs) are used in…