Decarbonisation Technology August 2026 Issue

European Union (RED III / REPowerEU)

United States (RFS / LCFS)

Modied Book-and-Claim Environmental attributes are separated from physical molecules and can be traded independently. Continuous Carbon Intensity (CI) Score Fuel is assigned in grams COe per MJ (CI score). Lower CI = higher credit value under LCFS.

Strict Mass Balance Physical tracking of biomethane volumes through the supply chain. Each unit must be physically matched. Threshold-based Compliance based on % greenhouse gas (GHG) reduction compared to the fossil fuel benchmark (e.g. 65%, 70%, 80%). Union Database (UDB) Registry Centralised EU-wide system ensuring transparency, traceability , and compliance for renewable gases. Rigid Only biomethane produced within the EU or via connected countries is eligible. Non-connected imports are excluded.

Chain of custody model

Carbon accounting

EMTS / WREGIS / LRT Registries Multiple registries used for tracking credits and attributes, varying by program me and state.

Tracking mechanism

Regional Allows virtual pipeline pathways and broader eligibility accross regional markets.

Geographic boundaries

Figure 4 Regulatory barriers

requirements for upgrading and injection infrastructure stall emerging market entry. • Blended revenues: Financial viability depends on combining physical gas sales with environmental credits. “ To accelerate deployment, markets like Germany and France enforce regulated percentage splits, where grid operators fund 75% and 60% of connection costs, respectively, leaving developers responsible only for the remainder ” Regulatory barriers (see Figure 4) The structural fragmentation in the global biomethane market is directly illustrated by the contrasting compliance rules of the European Union, which is regulated under the REPowerEU strategy and RED III framework, and the US, which is driven by the federal Renewable Fuel Standard (RFS) and state-level Low Carbon Fuel Standard (LCFS) markets. The critical operational differences span accounting methodologies, lifecycle evaluation, and cross-border trade restrictions. Divergent rules on chain of custody, carbon accounting, tracking and geographic eligibility create complexity, increase compliance costs, and limit cross-border biomethane trade harmonisation. Greater alignment of certification frameworks is essential to unlock the full potential of global biomethane markets.

Infrastructure barriers Infrastructure integration remains a critical structural bottleneck for scaling biomethane. Connecting decentralised production facilities to existing gas networks requires extensive grid connection infrastructure, including injection points, compression systems, and metering stations, which are frequently delayed by lengthy permitting and utility upgrade timelines. Furthermore, gas distribution networks vary widely in technical readiness, often requiring costly retrofitting to accommodate the specific quality standards and pressure variations of renewable gas. As the IEA Outlook for Biogas and Biomethane notes, spatial mismatches between feedstock availability and pipeline networks necessitate additional transport and aggregation systems, materially increasing delivered costs and reducing competitiveness (IEA, 2025b) . A defining factor in resolving these bottlenecks is the regulatory framework governing grid- injection cost allocation, which typically follows two distinct models: • Utility-subsidised splits (The European Model): To accelerate deployment, markets like Germany and France enforce regulated percentage splits, where grid operators fund 75% and 60% of connection costs, respectively, leaving developers responsible only for the remainder. As detailed by the European Biogas Association (EBA) Cost Study , Portugal requires producers to cover upfront