EU Union Database Disrupts U.S. Biogas Exports

Major shifts in decarbonization rules, particularly in the transportation sector, are driving the growth of the biomethane market in the EU.  However, new EU regulations are creating market uncertainty.

The Union Database (UDB) is the EU’s system to provide traceability and “sustainability” certification for biofuel and biogas supplies.  The UDB will operate as an online system where market stakeholders will enter information on transactions and sustainability characteristics of renewable fuels (e.g., lifecycle greenhouse gas emissions). Called for under the 2018 Renewable Energy Directive (RED II), the sustainable certificates will be proof for EU off-takers that their green fuel will count towards RED II renewable energy targets.

As currently constructed by the EU’s Directorate General for Energy (DG ENER), the UDB will only provide sustainable certifications for biogases (e.g., biomethanol and biomethanol-derived fuels) produced within the EU natural gas grid.  The European Commission has noted the intention to exclude the certification of biogases produced in third countries as they claim non-EU gas grid systems are not mass balanced and therefore do not provide sufficient chain of custody guarantees.  The EU is taking this approach due to concerns about traceability and double counting from third-country markets.  

The UDB implementation is in two phases: the first for sustainable liquids (e.g., biofuels) became operational on January 15, 2024, and the second for sustainable gases (e.g., biomethane and its derivatives) is scheduled to come into effect by November 21, 2024, whereby all non-EU biogas suppliers will no longer receive sustainable certifications within the EU.  Prior to the UDB implementation, biogas supplies from third countries were able to be certified as sustainable/renewable in the EU.

U.S. biogas producers are concerned by the current regulation and the market uncertainty.  The UDB will remove incentives for EU customers to buy higher-priced renewable biogas from the U.S. as it will not count towards RED II renewable targets.  

The U.S. Commercial Service at the U.S. Mission to the EU (CSEU) continues to engage the European Commission on this issue on behalf of U.S. industry by hosting industry webinars and roundtables, and meeting with senior European officials.  If your industry may be affected by this policy initiative in any of the EU Member States, please contact CSEU Senior Commercial Specialist Anna Costiuc and Commercial Officer Nathan Donohue for additional guidance and support.