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Biogas market movement: German market may slump

Throughout the world, there are more than 10,000 operational biogas plants with an installed capacity of about 5,000 MW. Almost two-thirds of the facilities are located in Germany. The worldwide installed capacity in biogas plants will further increase by 2,700 MW from 2012 until 2016 and the number of plants will grow by another 3,800. However, the focus of this growth will shift away from Germany, where it has mainly happened over the past five years. The German share of newly worldwide constructed plants for instance will decrease to about a third.

Due to their favorable subsidization schemes, the already established biogas markets in Italy, the United Kingdom, the Czech Republic and the Netherlands will continue to be among the most important markets in the next five years. France is one of the new strong European growth markets. The country introduced a feed-in tariff in 2011 and simplified the approval procedures for the construction of biogas plants. Further emerging markets can be found in Eastern Europe. Poland has, for instance, announced a feed-in tariff in early 2013.

The most important non-European markets of the years to come will be the North American and Asian ones. Most biogas plants will be constructed in the U.S., Canada, China, India and Japan. The growth in the U.S. will especially accelerate, as the country’s current project pipeline is one of the largest throughout the world. Standards in India and China will reach western levels in the years to come and the countries will significantly develop their biogas markets thanks to their huge biomass potentials. Japan introduced the world’s highest feed-in tariff for biogas in mid-2012, which will trigger considerable dynamics in this market.

Compared to these growth markets, the world’s largest biogas market in Germany has slumped dramatically since early 2012. This is mainly due to the amended Renewable Energy Act. Compensation rates for biogas were in some cases reduced significantly and legal conditions were tightened (for instance, plants now have to use at least 60 percent of their waste heat). This is why in Germany the number of newly constructed biogas plants per year will decrease from about 1,300 in 2011 to 300 plants in 2012. In the long term, the German market will stabilize on this lower level.