To reach climate targets, we need scalable, clean alternatives to fossil fuels, and e-fuels are among the most promising options. One of these e-fuels are methane, the primary component of natural gas.
Methane is widely used in industries, transportation (including road- and maritime transport), and for energy production. While conventional methane comes from fossil sources, green methane can be produced through renewable methods like biogas production or synthetic production from green hydrogen, offering a more environmentally friendly alternative with the same chemical properties and usability.
Conventional methane vs green methane
The main difference between green methane and conventional methane is their carbon footprint. While the actual molecules are chemically identical, green methane is produced using renewable energy sources and circular carbon dioxide, resulting in significantly lower greenhouse gas emissions.
Natural gas, extracted from underground fossil reserves, consists of mostly methane (>93%) with small amounts of other burnable gases. Products like natural gas, biogas, synthetic natural gas, and green methane all contain mostly methane gas but may have quite different concentrations of other gases in them. Since the use of natural gas is quite insensitive to these differences, these products are often considered the same.
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Advantages of green methane
One of the main advantages of green methane is its ability to reduce greenhouse gas emissions while fitting seamlessly into today’s energy systems. By using renewable electricity and capturing CO₂ from circular sources like biomass or waste incineration, green methane offers the same energy value as fossil natural gas—without the heavy carbon footprint.
What makes it especially practical is its full compatibility with existing infrastructure. Green methane can be used in the same pipelines, industrial processes, vehicles, and power systems already designed for natural gas. No major retrofits or new technologies are required.
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It can also be injected directly into the natural gas grid, making storage and distribution straightforward. This is particularly valuable in sectors like shipping, freight transport, and high-temperature manufacturing, where gas use is already established and difficult to replace.
By closing the loop on carbon through the use of waste-derived CO₂, green methane supports a circular economy approach to energy. For industries aiming to decarbonize without overhauling their operations, it offers a realistic and scalable solution.
Four important considerations for your green methane project
Choosing energy sources
Producing green methane through electrolysis and methanation requires a steady supply of renewable electricity. Your project needs access to low-cost, low-carbon power, ideally from solar, wind, hydro, or other clean sources, to remain economically viable.
The cost of electricity is often the single biggest driver of synthetic methane’s price, making site selection and power contracting critical from day one.
Circular carbon dioxide
You must secure a reliable source of circular carbon dioxide, ideally from biological sources like wood industries or waste incineration plants. Forming partnerships or deals with owners of local carbon dioxide source gives better insights on the costs and technical aspects of securing supply for methane production. For some projects, a CO2 storage may also be necessary to maintain supply at all times.
Cost analysis
Economic viability is key, so you’ll need to analyze the costs of energy input, carbon dioxide capture, and potential market prices for green methane. Your project’s location matters significantly – you’ll want proximity to renewable energy sources and circular CO2 suppliers. Technological considerations are also important, including selecting the right electrolysis and methanation technologies, and including necessary compression and storage of hydrogen.
Regulatory compliance
You must also ensure compliance with renewable fuel standards and regulations. The ultimate goal is to create a project that can produce green methane competitively while meeting stringent sustainability requirements, essentially balancing technical feasibility, economic performance, and environmental credentials.
According to the EU RFNBO legislation, e-methane is classified as green if the CO2 originates from an approved source such as air captures CO2 and biogenic CO2. CO2 derived from fossil fueled industrial processes can also be approved under certain, specific conditions.
Securing suppliers of green CO2
To identify and secure a reliable circular CO2 supplier, you should focus on local biological industries like wood processing, pulp and paper mills, and municipal waste incineration facilities. These industries often produce CO2 as a byproduct that is typically vented into the atmosphere.
When engaging with local parties, the key is to present a viable business case that demonstrates mutual economic benefit – offering these companies a way to monetize their CO2 emissions instead of simply releasing them. Negotiations will involve discussing partnership models, cost-sharing mechanisms, and long-term supply agreements.
Prepare to address potential perceived technological or economic risks by providing detailed project plans, and demonstrating the economic and environmental advantages of capturing and repurposing CO2. Geographic location plays a crucial role, with regions like Northern Europe having abundant biological CO2 sources due to extensive wood and waste processing industries.
The goal is to create a symbiotic relationship where the CO2 producer sees value in capturing and selling their emissions, while the green methane project secures a stable, circular carbon source.
Using technology to simplify green methane development
Developing a green methane project involves many interconnected decisions, from selecting energy sources to sizing equipment and managing variable inputs. A digital tool like Southern Lights can streamline this process by allowing you to simulate, track, and optimize your projects to make more confident decisions.
