What Is Biomethane and What Are Its Environmental Advantages?

Biomethane is a renewable and low-carbon alternative to conventional natural gas. It begins its journey as biogas — a methane and carbon dioxide mixture produced through the breakdown of organic materials through processes like anaerobic digestion or thermochemical conversion. This includes the fermentation of organic waste from various sources, including agricultural residues, wastewater treatment plants, and landfills. Once the biogas undergoes purification and upgrading to meet quality standards, it’s injected into the natural gas grid. This process involves removing impurities and increasing methane concentration, resulting in biomethane suitable for use as a sustainable energy source.

Biomethane plays a pivotal role in mitigating greenhouse gas emissions by capturing and repurposing methane that would otherwise be released into the atmosphere. This process effectively closes the carbon loop, contributing to a circular economy and reducing the carbon footprint associated with waste decomposition. Biomethane production also encourages the responsible management of organic waste, diverting it from landfills and minimizing the environmental impact associated with waste disposal.

In addition to aligning with sustainable waste management practices, biomethane provides a renewable and domestic energy source, contributing to energy security by reducing dependence on fossil fuels and foreign energy imports. This shift towards renewable energy fosters a more resilient and self-sufficient energy infrastructure.

Brazil's Role in Promoting Biomethane

Brazil has been proactive in fostering the use of biomethane through various regulatory and financial incentives. The government has introduced several measures, including investments under the Special Regime of Incentives for Infrastructure Development and the National Program for the Reduction of Methane Emissions - Methane Zero. These initiatives aim to reduce greenhouse gas emissions and ensure energy security by promoting the production and use of biomethane.

What Are Biomethane Certificates (Gas-RECs) and How Are They Managed in Brazil?

Biomethane certificates are tradable assets that represent a specific amount of biomethane production. These certificates function similarly to renewable energy certificates in the electricity sector, guaranteeing accurate verification and tracing of emission reductions attained by replacing fossil gas with biomethane. In Brazil, these certificates are known as Gas-RECs and are managed by Instituto Totum.

Gas-RECs are currently undergoing the process of receiving an eligibility code under the IREC global standard and are expected to be designated as I-TRACK G once this code is confirmed. Once fully developed, they can be used for various voluntary purposes such as Scope 1 reporting and end-user statements. They’re issued per MMBTu (Million British Thermal Units) and can be easily converted to MWh (Megawatt-hours).

These characteristics can be particularly beneficial for industries heavily dependent on natural gas consumption. Companies with significant Scope 1 emissions can choose biomethane certificates, such as Gas-RECs in Brazil, to claim reductions in these emissions. Many corporations seek certificates with traceable origins and auditable chain of custody records, making these certificates a suitable choice.

Understanding Compliance Markets for Biomethane Strategies

For organizations looking to incorporate biomethane into their sustainability strategies, understanding compliance markets and reporting requirements is crucial. The regulatory landscape is evolving, and keeping abreast of updates is essential. For instance, the GHG Protocol's position on biomethane certificates has shifted, impacting how these certificates can be used for emission offsets. Organizations must ensure they are compliant with the latest guidelines and leverage these certificates effectively in their sustainability reporting.

The direction provided by the GHG Protocol for biomethane Scope 1 is as follows: "In the absence of guidance, companies purchasing certificates may wish to consult with their auditors and consider rules provided by relevant target-setting programs or applicable regulatory schemes in their jurisdiction(s) on how to report these purchases in their reports, while ensuring full transparency and following all GHG accounting and reporting principles."

Customers have the option to potentially accept these certificates with auditor approval and integrate them with physical supply under the green tariff scheme, in line with corporate policies. Moreover, the development of I-Track G aims to provide comprehensive information on biogas or biomethane production to facilitate well-informed decision-making. The launch is anticipated in 2024, with implementation likely in 2025. Guidance on Scope 1 reductions is pending the GHG Protocol Sector and Removals Guidance, expected in 2024. Having the GHG Protocol's endorsement associated with Gas-RECs would significantly streamline processes.

Partnering with a Global Biomethane Expert

Organizations in Brazil and beyond can significantly reduce their greenhouse gas emissions from natural gas consumption by purchasing biomethane certificates, helping them achieve climate action targets, meet regulatory compliance obligations, and enhance energy resilience. Navigating the complexities of biomethane certificates and compliance markets can be challenging, but partnering with an expert can make the process seamless and efficient.

At ACT, we support our clients at every step of the biomethane certificate process. We have the sourcing network, market expertise, administrative capacity, and sourcing criteria knowledge to create and execute a strategic procurement strategy to hit your targets efficiently in every region. Our dedicated global R&D teams diligently track all voluntary and compliance framework changes and renewable energy market trends so you can stay ahead of the curve. By choosing ACT as your biomethane partner, you can align your organization with a team dedicated to advancing renewable energy objectives and achieving tangible results.

For more information on how we can support your organization’s needs, contact us here.