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Poland’s Biomethane Industry Poised for Growth: PLN 17.5 Billion Investment Planned by 2030 Amid Calls for Regulatory Support

ENERGYPoland's Biomethane Industry Poised for Growth: PLN 17.5 Billion Investment Planned by 2030 Amid Calls for Regulatory Support

By the end of 2023, there were 388 biogas plants in Poland, and none producing biomethane. For comparison, in Europe a year earlier, there were almost 19.5 thousand and over 1.3 thousand of such facilities respectively. Members of the Polish Biomethane Organization, in an official statement sent to the Ministry of Climate and Environment, declared investments in biomethane projects of at least PLN 17.5 billion by 2030. This would enable the production of 2 billion cubic meters of biomethane annually in Poland. However, according to Michał Tarka of the POB, legislative changes and a long-term strategy for market development are needed.

“Mainly, biomethane needs legal regulations that will enable the large-scale functioning of this industry in Poland. At the moment, there is no biomethane in Poland. However, comparing the potential and investment opportunities with the infrastructure capabilities that exist, development is currently only blocked by legal regulations. There is a continuous lack of a support system, as other renewable energy source industries have,” says Michał Tarka, General Director of the Polish Biomethane Organization.

Biomethane has similar chemical and energy properties to natural gas, but is fully ecological and zero-emission. It can be generated from waste such as that from the food and agriculture sector or sewage treatment plants. It can be used for the production of electricity and plays a significant role in the decarbonization of transport, industry, or heating.

Poland has vast amounts of biomass, which could make the country one of the leaders in biomethane production. The potential for biomethane production is estimated by the POB to be equivalent to 60% of the total amount of biogas produced. By the end of 2023, according to data from URE and KOWR, there were 388 biogas plants in Poland (up from 346 in 2022), including 146 agricultural biogas plants. However, there were no biomethane plants. A report by the editorial team of teraz srodowisko indicates that there were almost 19.5 thousand biogas installations and 1,320 biomethane plants in Europe. This highlights the lack of maturity in the Polish market, primarily due to a lack of transparent regulations and support for investors.

“We need a biomethane strategy, like a hydrogen strategy, in the National Plan for Energy and Climate, and biomethane in the national energy plan for 2040,” says the general director of the POB.

The Polish Biomethane Organization appealed to the Ministry of Climate and Environment in March 2024 to update the National Plan for Energy and Climate with provisions promoting biomethane production in Poland. They proposed a target of producing 2 billion cubic meters of biomethane by 2030, and support for installations of over 1 MW that will produce biomethane for sale at a fixed price. They also asked for support for installations that transport biomethane compressed or liquefied by non-gas-network means and measures to facilitate integration of renewable energy plants producing biomethane with the gas network.

According to the report “Biogas and Biomethane in Poland”, in the initial version of the National Plan for Energy and Climate submitted to the European Commission, biomethane has little visibility. It is only mentioned a few times, without defining a specific goal in each area of the economy, and is only designated as a supplementary way of generating electricity or heat. There is a lack of clear objectives, regulations, and a support system.

“What needs to change in the legal regulations to start the biomethane industry in Poland is primarily a secure investment support system that would make it possible to launch this industry in the shortest possible time. This includes changes to regulations regarding permitting and environmental decision-making, which would enable the realization of these investments and shorten the time required for them. This is the main reason for the current slowdown we are observing in this industry in Poland,” explains Michał Tarka.

The inclusion of the sector in national energy strategies and the creation of a support system for installations should enable investors to develop long-term development plans. Members of the Polish Biomethane Organization, in an official statement sent to the Ministry of Climate and Environment, declared investments in biomethane projects of at least PLN 17.5 billion by 2030. Their outcome should be the launch of production of 2 billion cubic meters of biomethane annually in Poland.

According to POB’s position, the developers of planned biomethane projects expect simplifications in the procedures for obtaining environmental decisions for larger projects and clarification of doubts regarding smaller projects. In their opinion, there is a lack of regulatory incentives for gas distribution network operators to connect biomethane installations. Currently, up to 70% of applications for the connection of biogas plants to the electricity network are rejected.

“If nothing changes and biomethane continues to be undeveloped in Poland, we will not have green fuel in the short term, which is important for the decarbonization of the industry, and the competitiveness of the Polish economy will be disrupted. Other countries in the European Union, especially the largest ones, such as France, Germany, Italy, and Denmark, are very dynamically developing the production of renewable gases, particularly biomethane,” assesses the general director of the POB.

According to the publication Now Environment, citing the International Energy Agency, Denmark, which has had a strategy in this area for years, reached 38% biomethane consumption in 2023. The Italian gas distributor declares a fourfold increase in biomethane production to 2 billion cubic meters in 2026. The
overall global biomethane production increased by 12% y/y – to 8 billion cubic meters.

According to European Climate Neutrality Observatory analysis for 2030, targets for biogas production have been set by countries including Spain (76 TWh), Italy (55 TWh), and Sweden (9 TWh). Poland could have equally ambitious goals, especially considering the availability of investment financing.

“Both the National Recovery Plan and the grant programs that appear in the National Fund for Environmental Protection and Water Management, have allocated large amounts of money for biomethane investments, especially the latest grant program for biomethane, which amounts to PLN 4 billion. These investments have a chance to be supported by this program, if the program itself is designed in a user-friendly way and finds interest among investors,” says Michał Tarka.

In July, NFOŚiGW conducted consultations on the project of a priority program “Improving energy security through the use of biomethane”. Its aim is to promote the production and use of biomethane in the process of fermenting selectively collected bio-waste. The program, which will be implemented over the next six years, will provide PLN 2 billion for non-refundable financing and PLN 2 billion for repayable forms of financing. They will be available to entrepreneurs who invest in fermentation installations for selectively collected bio-waste, non-edible food, and sewage sludge. The fund informs that the support will cover biomethane production facilities, including connection to the gas network, and biogas production facilities, with a module for cleaning it to biomethane or further processing to a liquefied (bioLNG) or highly compressed (bioCNG) form for use in transport.

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