Among key factors that could facilitate the development of biomethane production in Poland, 44% of survey respondents indicated subsidies and access to financing, 30% simplification of administrative regulations, and 22% indicated regulatory stability. The main reasons hindering investment in biomethane, according to 36% of respondents, are unfavorable and complex regulations, 28% lack of financial support, and 26% high installation costs. However, Poland is one of the countries with the highest production potential of biomethane in the European Union – according to the report “Biomethane in Poland. The Growing role of biomethane in the energy transition,” prepared by Strategy& in Poland.
In recent years, Polish companies have conducted many investments in solar and wind energy, overlooking biomethane as a new development path and a way to reach EU targets. This choice is surprising, especially considering we have a large production market and every chance of a growing market for this product. Currently, biogas is produced in approximately 380 installations with a cumulative electrical power of about 280 MW, with the majority being municipal biogas plants. However, Poland has significantly greater potential, potentially over 300 large and about 800 medium installations, and only about 3% of the total potential for biogas production is currently being used.
“Effectively accomplishing the transition towards green energy will be crucial for maintaining the competitiveness of the economies in Poland and Europe. Among renewable energy sources, biomethane can play a particularly significant role as an ecological alternative to traditional natural gas. Despite this, the development of biomethane in Poland is not progressing as dynamically as it might seem. An insufficient investment climate, which could be based on a national strategy for biogas and biomethane, just like the Polish Hydrogen Strategy for 2030 or the Polish nuclear power program, limits interest. Only 22% of entities in the Polish biogas market are considering expanding their activities to include biomethane production,” says Wojciech Słowiński, partner at Strategy& in Poland, leader of the oil, gas, and chemical market team.
A significant opportunity for our country to catch up with European leaders could be a focus on biomethane. Poland has one of the largest stocks of useful biogas substrates in the Union, both for feedstock for the production of biomethane from the process of methane fermentation, and for gasification. The largest sources of raw material in Poland for methane fermentation are the agricultural and municipal sectors.
“With Poland’s existing demand for natural gas and its potential for growth in the context of transport decarbonization, as well as its well-developed transmission infrastructure, Poland could be a promising place for investment in biomethane. Despite these advantages, a still small fraction of the respondents express interest in expanding their biogas production chain to include biomethane. Although only one-fifth of respondents identified a lack of long-term strategy as the main obstacle, nearly all of the main challenges hampering the development of biomethane in the country could be solved by introducing a coherent national biogas policy. Such a strategy for biomethane would aim to define goals and methods to overcome existing obstacles to the development of this market,” says Bartosz Safiejko, director at Strategy& in Poland, oil, gas, and the chemical market team.
The main problems impacting the lack of a suitable investment climate in biomethane in Poland can be divided into three groups: administrative and regulatory barriers; a lack of appropriate support systems for the construction and production of biomethane; and societal resistance. Only 72% of respondents rated interest in biomethane among potential gas consumers as medium or low, while up to 82% rated societal awareness regarding biomethane as negligible. All the barriers and circumstances indicated above lead the vast majority of respondents to believe that biomethane will register only slight growth by 2030. They indicate that the greatest chances for the development of production lie with large entities, which have sufficient resources to overcome existing challenges, at least partially. Only 12% of respondents predict the realization of Poland’s production potential and the corresponding contribution to meeting EU production targets resulting from REPowerEU (as we have not yet defined our own goal).
Developing an adequate strategy followed by a series of actions based on cooperation between all key stakeholders responsible for the development of the biomethane market in Poland could allow breaking the unfavorable trend and increase the number of biomethane plants dynamically. Preparing this strategy should precede determining needs and visions for biomethane in the Polish energy mix and a thorough market analysis. This analysis should answer crucial questions from the strategy point of view, such as: how much biomethane can we produce, using which substrates, what size installations are optimal now and in the future, what is the demand for biomethane and in what form – whether it should be injected into the gas network or distributed as bio-LNG or bio-CNG, how much production will cost and what is the gap between the amount consumers are willing to pay for biomethane and its production cost. Only such meticulously prepared, dedicated to biomethane (and biogas) strategy and subsequent implementation actions resulting from it can realistically affect the investment potential of the market.
About the survey:
The aim of the study “The Role of Biomethane in Poland’s Energy Transition” is to understand how current players in the biogas market perceive the potential of biomethane in the context of future energy transition, identifying main barriers and factors that could support the development of this sector. The survey also addressed companies’ investment plans in biomethane, the motivations behind them and preferred investment models. Respondents also expressed opinions on societal perception and future directions for the market’s development.
The survey comprised seven closed-ended and five open-ended questions, with respondents being able to provide additional comments to clarify responses. The survey was conducted through telephone interviews and an online questionnaire between August 30 and September 26, 2023.
The research group consisted of 50 entities operating in the biogas or biomethane market in Poland, representing about 10% of the entire market. This included 36% agricultural biogas plants, 48% municipal biogas plants, and 16% other entities, including technology and substrate suppliers, and industry associations.
