# Biogas and biomethane: Cycles

Why subsidies and credits, not markets, drive investment

Source page: https://www.materialinsights.org/energy/biomethane/cycles/

What this tab covers How its prices and margins move: past booms and busts with price levels, the spread or margin that the industry watches, the drivers of the cycle and the metrics to track.

Biomethane is not priced as a free commodity: revenue is the gas price plus a stack of subsidies or credits (feed-in tariffs, grid-injection tariffs, RINs and LCFS credits, guarantees of origin, India's SATAT price). Investment cycles follow those schemes. Natural gas price spikes (Europe 2022) and credit price falls (US LCFS 2023-24) have been the big swings. In India, the binding constraint has been offtake price and feedstock logistics, which the 2025 blending obligation and GAIL pooling try to fix.
 The spread to watch **Biomethane revenue stack minus production cost**

Production cost averages about $36-108/MWh (IEA 2025), against wholesale gas of roughly $25-45/MWh in Europe and Asia in 2025-26 (indicative). The gap is closed by credits: in California, RNG carbon intensity of -198 g/MJ earns large LCFS credits; in India, the SATAT and CGD offtake price at 85% of CNG retail.

#### Booms and busts

1. 2000s-2014

German and Italian feed-in tariffs built thousands of farm biogas power plants, many on maize silage, until tariffs were cut (indicative).

not retrieved

2. 2022

Europe's gas crisis made biomethane competitive and triggered investment; REPowerEU set a 35 bcm target (indicative).

TTF gas peaked in Aug 2022 (indicative, ICE); level not retrieved

3. 2023-2024

California LCFS credit prices fell as supply of low-CI fuels grew, cutting dairy RNG revenue; CARB amended the LCFS (indicative).

not retrieved

4. 2018-2026 (India)

SATAT launched in 2018 with a target of 5,000 plants and 15 Mt by 2023-24; by Nov 2025 only 114 plants were commissioned. A mandatory CBO from 2025-26, GAIL pricing at 85% of CNG retail and a 5% GST rate on equipment then lifted offtake.

GAIL procurement at 85% of average CNG retail price; reference Rs 1,478 per MMBtu (Renewable Watch, Dec 2025)

#### What drives the cycle

- **Credit and offtake schemes.** RINs, LCFS, EU green gas certificates and India's CBO decide whether plants are financeable.
- **Natural gas prices.** Higher gas prices narrow the subsidy gap; Europe's 2022 spike drove investment.
- **Feedstock logistics.** Seasonal straw and press mud need storage; dispersed manure needs collection.
- **Digestate value.** Fertiliser sales and India's market development assistance for FOM add revenue (indicative).

#### Metrics to track

| Metric | Why it matters | Where to track it |
|---|---|---|
| **SATAT portal: plants commissioned and LoIs** | Indian capacity build-out | SATAT / MoPNG |
| **PPAC CBO compliance reports** | Indian demand under the obligation | PPAC |
| **EBA Statistical Report** | European output and plant numbers | European Biogas Association |
| **LCFS credit price and D3 RIN price** | US RNG revenue | CARB; EPA EMTS |

## Other sections

- [Summary](https://www.materialinsights.org/energy/biomethane/index.md)
- [Energy overview](https://www.materialinsights.org/energy/biomethane/energy/index.md)
- [Correlation](https://www.materialinsights.org/energy/biomethane/correlation/index.md)
- [Efficiency](https://www.materialinsights.org/energy/biomethane/efficiency/index.md)
- [Techniques](https://www.materialinsights.org/energy/biomethane/techniques/index.md)
- [Resources and labour](https://www.materialinsights.org/energy/biomethane/resources/index.md)
- [Impact on the biosphere](https://www.materialinsights.org/energy/biomethane/biosphere/index.md)
- [Overview](https://www.materialinsights.org/energy/biomethane/overview/index.md)
- [Production route](https://www.materialinsights.org/energy/biomethane/routes/index.md)
- [Production](https://www.materialinsights.org/energy/biomethane/production/index.md)
- [Feedstocks](https://www.materialinsights.org/energy/biomethane/feedstocks/index.md)
- [Trading](https://www.materialinsights.org/energy/biomethane/trading/index.md)
- [Movement](https://www.materialinsights.org/energy/biomethane/movement/index.md)
- [Regulation](https://www.materialinsights.org/energy/biomethane/regulation/index.md)
- [Characteristics](https://www.materialinsights.org/energy/biomethane/characteristics/index.md)
- [Emissions](https://www.materialinsights.org/energy/biomethane/emissions/index.md)
- [Relationships](https://www.materialinsights.org/energy/biomethane/links/index.md)