What is the state of biogas and biomethane market in France?

By | 2018-05-29

The biogas and biomethane market in France is experiencing, more than ever, a significant growth. Recently, the French government reiterated its intention to achieve carbon neutrality by 2050 and increase the share of renewable energy to 32%. To succeed, France wants, among other things, to capitalize on the strong potential of biogas and biomethane as green energy. Over the years, France has put in place numerous measures and subsidies to support biogas and biomethane and thus reach its targets. In addition, this year, the development of the biogas and renewable natural gas industry is one of the concerns discussed during the revision of the multiannual energy program. In short, France puts in place the necessary pillars to create interesting business opportunities in biogas and biomethane. As EXPOBIOGAZ 2018, a major event demonstrating the dynamism of the industry in France, gets closer, we would like to highlight major developments of this market.


French biogas and biomethane industry in numbers 

As of the end of 2017, according to the 2017 Renewable Gas Panorama and the Biomethane Observatory:

Total of functionning injection sites and yearly evolution of biogas and biométhane market in France.

Source : Panorama du gaz renouvelable 2017

  • The quantity of biomethane injected into French distribution networks has doubled since 2016 to reach 406 GWh, which is equal to the consumption of almost 34,000 homes.
  • The number of biomethane plants increased by 70%.
  • Biomethane production has increased by approximately 89% since 2016.
  • 44 biogas plants, out of a total of 592, were injecting biogas into the natural gas distribution systems while the rest of them were producing heat or electricity.
  • 361 biomethane injection projects are pending, with a cumulative potential production capacity of 8TWh / year.
  • 90,000 tons of CO2 were avoided thanks to the injection of renewable gas.

In addition, the majority of biogas plants use feedstocks from agriculture and agri-food industry. In fact, the production of biogas and biomethane in France is based on the valorization of waste and agricultural, industrial or municipal by-products. Unlike some countries like Germany, it does not practice culture used for production of energy.

In addition, the upgrading of biogas for its injection into natural gas distribution networks is growing rapidly in France. However, cogeneration, the production of electricity and heat with biogas, remains preferred.


The French government actively supports the growth of the industry 

For several years, the government of France has actively supported the growth of biogas and biomethane. The market mechanisms and the various subsidies offered make it possible to reduce the high costs of production.


Fixed purchase tariff: market mechanisms for producers 

These market mechanisms give producers the certainty of selling a certain amount of biogas and biomethane to a selected supplier at a previously fixed price and for a fixed term. These are the pillars of government support for the industry.

These purchase tariff, determined by the government, depend on several factors, such as the form of valorization used, the size of the unit and the nature of the feedstocks.

There are two types of fixed purchase tariffs:

  • For biomethane injected into natural gas networks

The duration of the purchase obligation is 15 years, and allows to reduce the costs of production and operation. The basic purchase tariff for renewable natural gas plants is between 6.4 and 9.5 c € / kWh, depending on their size. A bonus may be added depending on the type of feedstocks used.

  • For electricity produced from biogas

For this type of biogas plant, the duration of the purchase obligation is 20 years. When the biogas plants exceed a power of 500 kW, they go through a formal bidding process. This purchase price has allowed for strong growth incogeneration in agricultural areas.

Fixed price tariff in biogas and biomethane market in France.

Source : Panorama du gaz renouvelable 2017

For more information, visit the Ministry of Ecological and Solidarity Transition and CEGIBAT websites.


Guarantees of origin: a contract with benefits

Guarantees of origin bind the biomethane producer and the gas supplier for 2 years. The gas supplier receives a guarantee of origin for each MWh of biomethane produced. This disappears from the register as soon as the MWh is consumed.


Other biogas and biomethane incentives in France to accelerate the energy transition 

Over the years, the government of France and other organizations active in the biogas and biomethane industry have enhanced the financial incentives offered. The goal is to stimulate French industry and reduce the costs associated with the production and operation of biomethane or biogas units.

Here are some examples of financial incentives you could benefit from:

  • Grants and technical aids offered by ADEME, local authorities, water agencies and others;
  • The exemption from the domestic consumption tax on natural gas (TICGN) now also applies to biogas or biomethane mixed with natural gas. In 2017, the French government also set up:
  • Tariff rebate of up to 40% on the costs of connecting biomethane facilities with the distribution network;
  • Biomethane injection permitted in underground storage locations.

Revision of multiannual energy programming: towards a more carbon-neutral energy mix

Last March, the French government launched public debates on energy priorities to take action on by 2023. These discussions will feed into the revision of the multiannual energy program in France (EPP) [PDF], scheduled toward the end of 2018.

Multiannual energy planning allows France to set itself targets and priorities in order to make the necessary energy transition. Thus, the new version of the EPP will aim to further develop renewable energies and reduce greenhouse gas emissions.

Biogas and biomethane take a prominent place in the ongoing discussions. This year, Sébastien Lecornu, Secretary of State for the Minister for Ecological and Solidarity Transition, has launched a working group to study the development of the biogas and biomethane industry in France. The working group made 15 recommendations to catalyze the sector ahead, concerning, for example:

  • Financial support for bioGNV;
  • Simplification of rules and administrative procedures to facilitate project development;
  • Easier access to credit for farmers who want to carry out a project.

In addition, the current version of the EPP set a target of 8TWh in 2023 for the injection of biomethane into the distribution networks. This target is already reached today, in 2018, thanks to the cumulative power of the projects currently being implemented in France. The high potential of biogas and biomethane in France is therefore becoming more and more obvious. With the revision of the EPP, the government will set even more ambitious goals.

Actual PPE targets in biogas and biomethane market in France.

Source: Minister for Ecological and Solidarity Transition


Obstacles to overcome 

Despite the continued growth of the biogas and biomethane industry, some obstacles remain.

A recent study by ATLANTE, the Advent of the 3rd Gas Revolution, mentions, for example:

  • High production and processing costs;
  • Irregular and seasonal demand;
  • The compartmentalized distribution network;
  • Administrative procedures that are sometimes long and complex.

However, there are several solutions for these problems: the use of new technologies, the implementation of regulatory changes and others. The actors involved in the industry are working to mitigate these obstacles to optimize its development.


Business opportunities in biogas and biomethane at your fingertips 

The combined action of the measures set up for the biogas and biomethane industry, organizations and companies unquestionably create interesting business opportunities in France for project developers and suppliers. This will become increasingly true as France moves towards carbon neutrality and seeks to reduce its GHG emissions. In addition, a report by ADEME is studying the feasibility of a 100% renewable gas mix by 2050.

Several companies in France are already benefiting from the market, such as:

This company valorizes biogas from waste storage facilities with its WAGABOX.

A company specializing in the construction of biogas plants in the agricultural and industrial industry, in particular.

A company with expertise in the technological development of biomass flows and the supply of renewable energy system.

A company specializing in gas separation technologies for biogas upgrading, nitrogen production and helium recovery, among others.


Come meet BiogasWorld at Expobiogaz!

As BiogasWorld always strives to take the pulse of the market and meet its actors, we will participate in EXPOBIOGAZ in Strasbourg. The company will bring for the occasion  Xebec and Ductor, well-established leaders of the industry. Come and meet us at our booth on June 6th to discuss the different avenues of biogas and biomethane and the latest innovations! Other French companies recognized as those named above will also be there to discuss with you about the market in France and the opportunities offered.


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