Germany’s changing heating policy keeps biomethane in focus
Recent political developments in Europe are once again showing how closely the biomethane market is tied to geopolitics, regulation, and wider energy policy. According to Johanna Diederichs from Greensteps, the past weeks highlighted both the volatility and the long-term opportunities shaping the sector.
“While I was travelling through Brazil during what turned out to be the rainiest February in 29 years, two developments stood out because of their direct impact on our market,” says Johanna Diederichs.
The first was the renewed instability in global gas markets following escalating tensions in the Middle East after 28 February. The resulting price volatility quickly spread into European energy markets, with knock-on effects for biomethane and related compliance markets such as RTFOs.
“When gas markets move sharply, biomethane markets inevitably feel part of that impact as well,” Diederichs explains. “Particularly in compliance-linked markets, geopolitical events can quickly influence pricing and trading dynamics.”
At the same time, a less internationally visible but highly significant development emerged in Germany. Just days earlier, the German government published the first policy cornerstones for a new Building Modernisation Act, or Gebäudemodernisierungsgesetz (GMG), which is expected to replace the current GEG framework from 1 July.
The timing is notable, as July 1 would have marked a major implementation milestone under the existing legislation, including broader heating-related obligations.
The proposed policy direction signals a change in tone from the German government. Instead of maintaining strict technology-specific heating mandates, the new approach emphasises what policymakers describe as “Vernunft, Freiheit und Tempo statt Verbote” — reason, freedom and speed instead of regulatory bans.
While the details are still being developed, one point appears clear: biomethane is expected to continue playing a recognised role in Germany’s heating-sector decarbonisation strategy.
“For the biomethane sector, that remains an important structural opportunity,” says Diederichs. “Even if the political approach changes, renewable gases continue to be part of the long-term pathway.”
At Greensteps, these developments are closely tied to day-to-day market activity. The company operates extensively between the UK and Germany, combining a strong German market presence with long-standing expertise in UK compliance markets.
This positioning allows Greensteps to support producers and buyers navigating increasingly interconnected European compliance frameworks, including helping UK producers structure sales into the German market.
“The current announcements are still policy cornerstones rather than final legislation,” Diederichs notes. “But they are important indicators of where the market may be heading, and we are following developments closely.”
As regulation across Europe continues to evolve, the ability to understand both policy direction and commercial implementation is becoming increasingly important for market participants operating across borders.
