Shell anticipates growth in German biomethane market

Shell anticipates growth in the German biomethane markets, where its clientele is looking for decarbonised energy and where its fossil fuel operation may be restricted to support future profitability from a high-value segment, Reuters reported on Tuesday.

Sonja Mueller-Dib, managing director of Shell Energy Deutschland told Reuters that the company was planning to establish two biomethane plants at Karstaedt and Steinfeld, which by the end of the decade will likely cover about 5 per cent of the national domestic biomethane consumption.

Moreover, in an interview at the E-World of Energy trade show in Essen, she stated that demand for methane from organic residue, such as manure, outpaces supply from industry and over 150 local power plants supplied by Shell.

“Our motivation is to supply the green molecule in large quantities and at competitive prices,” Mueller-Dib stated.

“The value of such products is higher than a pure natural gas product and that allows us the investment.”

Notably, the more carbon emissions costs rise, the more demand there will be for biomethane, which can be stored and used for all the same purposes as fossil fuel gas.

She also emphasised that, following food security guidelines that prioritise human nutrition, there was no intention to use food crops for biomethane applications, which reach the transport, chemicals, automotive, steel, and heat sectors.

The European Commission stated that biomethane output should increase tenfold by 2030 to reach 35 billion cubic metres to replace a portion of the 155 billion cubic metres of gas it used to purchase from Moscow in its RepowerEU plan, which was released following Russia’s conflict with Ukraine.

Germany produced 10.5 terawatt hours (TWh), or 1 bcm, of biomethane last year; however, this amount pales in comparison to the country’s 813 TWh gas consumption. Yet, with Shell’s new plants -which will likely cost several hundred million euros- could each generate 200–250 gigawatt hours (GWh), surpassing the 50–70 GWh current standard size.

Last year, the British oil and gas company purchased Danish biomethane producer Nature Energy for $2 billion.

“We can use our infrastructure position to ship biogas out of Denmark,” she stated, adding other future suppliers could be Poland, France, Spain and the Czech Republic.