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The European Union has declared its intention to become a global leader in biomethane production; however, the practical implementation of these plans faces a number of systemic constraints — from production economics to feedstock availability.
According to an analytical note by the Oxford Institute for Energy Studies (“Biomethane in Europe: Why scaling up is harder than it looks”, 2026), the sector shows steady growth, but the pace of scaling significantly lags behind the EU’s political targets.
The market is growing, but slower than expected
European production of biogas and biomethane increased by 34% in 2015–2024, reaching 232 TWh (around 22 bcm). At the same time, the biomethane segment showed even stronger growth — +24% in 2024 alone (to 52 TWh).
Despite this, the EU’s strategic target under the REPowerEU programme — 35 bcm of biomethane by 2030 — appears overly ambitious. Even with full implementation of national plans, achieving this level remains unlikely.
What biomethane is made from: feedstock structure
Biomethane is purified biogas produced through anaerobic digestion of organic feedstock. In Europe, the main sources are:
- Agricultural feedstock (core segment):
- manure and slurry
- maize silage
- crop residues
- Food industry waste and municipal biowaste:
- organic fraction of municipal solid waste
- food waste
- sewage sludge
- Industrial biowaste:
- residues from agricultural processing
- food production waste
Ukraine’s position: potential and feedstock structure
According to the Bioenergy Association of Ukraine, Ukraine has one of the largest biomethane production potentials in Europe, primarily driven by:
- agricultural residues (main resource);
- organic fraction of municipal solid waste;
- food industry waste.
Economics: the key market constraint
The main challenge for the sector is production cost:
- biomethane: €50–175/MWh
- natural gas (TTF, 2025): ~€38/MWh
At the same time:
- cost reductions have been limited since the late 2010s;
- full price parity is not expected even by 2050.
This means the market remains critically dependent on public support.
New demand drivers: transport and regulation
One of the few strong demand drivers is emerging from transport regulation, particularly FuelEU Maritime.
This segment could:
- ensure guaranteed demand;
- create a premium market for biomethane.
However, further development depends on:
- regulatory stability;
- alignment of certification mechanisms;
- resolving disputes around the “mass balance” approach.