The production of biomethane could generate almost R$200 billion per year in Brazil by 2050, driven by the growing market penetration in the substitution of natural gas. This finding is part of a study by the German consulting firm Roland Berger, which estimates that the energy could reach 39 billion cubic meters of sales per year. The estimated production potential is even higher and could reach 59 billion cubic meters per year, driven by the large amount of agro-industrial waste available in the Southeast and Central-West regions.
For comparison, this number exceeds the extraction of natural gas in 2020, which was 45.9 billion cubic meters, according to the National Petroleum Agency (ANP). Biomethane, or renewable natural gas, is obtained from the purification of biogas, a mixture of gases derived from the natural process of decomposition of organic waste in environments where there is no air exchange — anaerobic digestion.
It has been identified as an alternative for the sustainable replacement of fossil fuels, especially natural gas, and has a high potential to decarbonize various sectors such as manufactured goods, electricity, and transportation. Joo Martins, senior project manager at Roland Berger, said that the input is particularly attractive in Brazil, which relies heavily on natural gas for industrial and residential purposes.
“The forecast is that domestic demand for natural gas products will grow steadily to about 80 billion cubic meters by 2050. The market penetration of biomethane in Brazil, currently only 4%, has the potential to increase to 10% by 2030 and 50% by 2050,” said Mr. Martins.
Of this total, most can be consumed by the industrial sector for heat generation (boilers, furnaces), followed by the electricity sector, such as thermoelectric plants that can replace conventional natural gas with biomethane, and finally a smaller fraction in the transportation sector — the fleet of vehicles powered by compressed natural gas. “The investment in biomethane is to take advantage of the infrastructure and value chain that already exists for natural gas, whether in electricity, industrial heat, or transportation,” he said.
Roland Berger thinks it is unlikely that energy production will immediately replace diesel. On this point, the company disagrees with the Brazilian Association of Biogas (Abiogs), which believes that the development of energy will, in the short term, replace diesel. The point where the entities converge is that the development of this production route will take place on three fronts: agriculture, sanitation, and the sugar-energy sector.
The growth of biomethane production in Brazil began to grow in 2016 in parallel with the progress of the regulation, which, among other things, noted its interchangeability with natural gas and the possibility of mixing the molecule in natural gas pipelines. Nevertheless, today the production is only 182 million cubic meters per year.
Tamar Roitman, general manager at Abiogs, said that the regulatory progress was necessary, but not enough, since only six plants currently sell biomethane. The executive expects that by 2029 there will be 87 plants. What explains this is that the environmental aspect is driving the demand towards decarbonization.
So Paulo is the state with the highest annual production potential, with 18.1 billion cubic meters. It is followed by Minas Gerais (7.5 billion cubic meters), Gois (6.9 billion cubic meters), and Mato Grosso do Sul (4.7 billion cubic meters).
On the part of the companies, there is a growing interest in the input to neutralize operations. For example, Zeg Biogs and the landfill manager Multilixo have started the first off-grid biogas purification plant. Compass, a gas and energy company of the Cosan group, formed a joint venture with Orizon Valorizao de Resduos for the construction of a biomethane plant at the Paulnia landfill, in the state of So Paulo.
Among the manufacturers of heavy vehicles, Scania and Iveco are betting on biomethane models as an alternative to diesel. Ms. Roitman said the source is already mature, with a solid production chain, but she defends incentives, arguing that there are still regulatory and tax barriers to overcome.
According to data from the International Center for Renewable Energy and Biogas (CIBiogs), Brazil had an 82%-increase in biomethane plants in 2022. A total of 20 biomethane-producing plants started operating last year.