Biomethane Supply Potential and Its Relevance for Shipping by 2030

August 20, 2026

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(Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping) Summary -- • Lower-emissions energy carriers for hard-to-abate sectors like shipping are available but unlikely to scale in the absence of regulations that make them cost-competitive. This has led to some criticism of potential greenhouse gas (GHG) regulations for shipping on the grounds that insufficient lower-emissions energy will be available.

This analysis tests whether global supply of biomethane, a well-established energy carrier that is technologically mature and compatible with existing infrastructure, could credibly scale up to meet regulated demand.
We specifically test this using the draft International Maritime Organization Net-Zero Framework (IMO NZF) as a benchmark. While the NZF remains under discussion, it proxies many plausible and increasingly likely regulatory pathways for shipping and other hard-to-abate sectors.
Biomethane could provide a sizable share of the shipping sector’s early compliance response if the right regulatory conditions are in place. Our estimated total NZF-induced unconstrained demand for low-emissions fuel in 2030 is equivalent to around 30 billion cubic meters (bcm) of biomethane. (Note that this number refers to the volume that would be needed if biomethane met the entire NZF-induced unconstrained demand. Realized uptake will be lower, bounded by the methane-capable fleet, bunkering infrastructure, and cross-sector competition.)
We estimate that global biomethane supply could reach around 21 bcm in a ‘base’ case and 52 bcm in a policy-driven ‘max’ case by 2030. Both figures remain far below the global technical potential reported by the International Energy Agency (IEA), which suggests the main constraints are infrastructure, certification, regulation, and access to gas and LNG value chains rather than underlying biomass feedstock scarcity.
Certification requirements have a crucial role to play. Without globally recognized mass balancing, shipping would likely have to rely on physically segregated biomethane supply chains, which are difficult and costly to scale. At present, however, mass-balance accounting remains a key hurdle and would require further regulatory clarity.
Conditional on these enabling factors, the analysis shows the scale of energy available under plausible assumptions from this energy carrier is substantial and can support abatement. However, shipping will likely be in competition with other sectors for the same molecules. Greater willingness to pay from other sectors could undermine shipping's access to this source of abatement.
Grid-adjacent feedstock availability is not the binding constraint before 2030. Instead, the key question is whether shipping can access this broader gas-based system through a certified mass-balancing framework.

Some stakeholders have raised concerns about whether enough low-emissions alternative fuels will be available for ships to meet their compliance obligations if climate policy is enacted.1 For example, the draft International Maritime Organization Net-Zero Framework (IMO NZF)2 would require ships to reduce the GHG intensity of the energy they use over time.3

If these fuels are not available, ships may instead continue to use fuel oil and rely on paying penalties to comply. In this article, we share insights into the potential global availability of biomethane and the role that this fuel pathway could play in meeting the IMO’s decarbonization commitments.

IMO NZF

The IMO NZF is a set of regulatory measures that seek to reduce GHG emissions from international shipping, in line with the IMO’s 2023 GHG Strategy.4 If implemented, this framework currently under negotiation would be a globally binding climate regulation for shipping.

At the core of the IMO NZF is the Global Fuel Standard (GFS). The GFS sets a limit on the greenhouse gas fuel intensity of energy used by ships, with the limit becoming increasingly stringent over time.

We estimate that the IMO NZF could create unconstrained demand for around 26 million tonnes LSFO-equivalent of alternative fuel in 2030 (Table 1).

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Why is biomethane attractive for hard-to-abate sectors?

We define next-generation fuels as a family of fuels that includes both e-fuels (e-ammonia, e-methanol) and some biofuels (such as hydrothermal liquefaction and pyrolysis bio-oils). These options are still costly and immature, but they could offer the scalability and climate performance needed for a net-zero pathway by 2050.5 While we expect at least some of these fuels to play a role in long-term decarbonization,6 their contribution around 2030 is likely to be limited by high production costs,7 renewable power constraints,8 project execution risk, infrastructure bottlenecks, and the offtake challenge.9 In the first years of IMO NZF implementation, shipping is therefore likely to rely on transition pathways that can deliver recognized emissions reductions sooner and cheaper.

Biomethane stands out in that context. This fuel can achieve low or even negative well-to-wake emissions, depending on the feedstock, production pathway, and emissions accounting system.10 11 Furthermore, since biomethane is chemically equivalent to fossil methane, it can be used in existing LNG-fueled vessels and gas infrastructure. Taken together, these features give biomethane an important potential advantage over some alternatives: it does not require shipping to wait for new fuel infrastructure to emerge before it can begin delivering abatement.

Importantly, many global bunkering regions do not have significant installed gas grid or pipeline capacity, making physical delivery of biomethane difficult and expensive. Mass balance accounting (see info box) is therefore an important enabling regulatory feature for this fuel pathway.

Mass balancing

Mass balancing leverages existing natural gas infrastructure to enable physical decoupling of biomethane production from combustion on board a vessel.

For shipping applications, biomethane must ultimately be available in liquefied form. Before 2030, the most scalable route is likely to be mass-balanced liquefied biomethane, where biomethane is injected into the natural gas grid, its environmental attributes are transferred through a recognized chain of custody, and the gas is liquefied using existing LNG infrastructure. This means biomethane produced anywhere on a connected grid can be credited to a vessel bunkering far away, avoiding costly and emissions-intensive long-distance gas transport via road or rail.

In that context, grid access determines which biomethane volumes can participate in this pathway without needing decentralized liquefaction, which is expensive and difficult to scale. Based on data from the International Energy Agency, the amount of feedstock close to the grid does not appear to constrain near-term biomethane deployment at the levels considered here (see Appendix 7).

Biomethane could scale up by 2030

Our analysis starts with regional biomethane production in 2025, which totals 10.56 bcm across the regions for which data are available. From this starting point, we project regional production in 2030 under two scenarios. Each region’s aggregate 2030 biomethane estimate is split by feedstock type. This is based on IEA12 regional feedstock shares, using feedstock-specific biogas potential estimates as shown in Appendix 1.

In the ‘base’ case, 2025 production in each region is assumed to grow at a uniform 15% compound annual growth rate (CAGR) through 2030, in line with the IEA (2025) gas outlook.13 In the ‘max’ case, we apply a 38% CAGR, derived from the growth rates required in Europe to meet EU policy targets (more details in Appendix 2). In both scenarios, the respective growth rate assumption is applied across all regions. The resulting production estimates (Table 2) indicate that biomethane supply could plausibly reach meaningful scale in 2030 under both the base and max cases.

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Implications for the shipping industry and the role of regulations

If biomethane can deliver abatement at lower cost and with fewer infrastructure hurdles than many other fuel pathways, it could help the maritime industry comply with the IMO NZF and reach the 2023 IMO GHG Strategy’s indicative checkpoints for 2030.4

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The main implication is straightforward: if the IMO NZF allows credible and workable mass balancing, biomethane could become one of the few scalable near-term compliance options available to shipping. If it does not, the challenges of physical biomethane transport to ships means that much of that potential may remain inaccessible within this decade.

The near-term role for biomethane identified here should be seen alongside the longer-term picture. As Table 1 illustrates, NZF-induced demand for low-emissions fuel grows substantially after 2030 (reaching around 100 Mt LSFOeq by 2035 and over 200 Mt by 2040). This demand likely exceeds what biomethane alone could sustainably supply to shipping as feedstock and cross-sector demand pressures increase. Biomethane could therefore play a valuable bridging role: absorbing a meaningful share of early compliance demand and helping to buy time for next-generation fuels to reach commercial scale. Continued development of pathways such as e-ammonia, e-methanol, and advanced biofuels will remain important to help shipping reach its goal of net-zero emissions by or around 2050.

Is the IMO NZF likely to make shipping a competitive buyer of biomethane?

To assess whether shipping could realistically compete for biomethane under the IMO NZF, it is useful to compare the regulation-induced willingness to pay with an indicative market benchmark.

Using the IMO NZF fossil baseline of 93.3 gCO2eq/MJ and the NZF Tier 2 Remedial Unit price of 380 USD/tCO2eq, the implied compliance value of biomethane can be estimated as:

Maximum NZF compliance value per MWh = (93.3 — CIbiomethane) x (3600/106) x 380

where CIbiomethane is the assumed carbon intensity emission factor of biomethane in gCO2eq/MJ.

Using the CI range from Table 7 in Appendix 3 (17-32 gCO2eq/MJ) gives us an implied maximum NZF willingness to pay of around 84–104 USD/MWh.

As an indicative current market benchmark, biomethane can be proxied as a natural gas price plus a biomethane certificate premium. Using a fossil gas benchmark of €30/MWh* and a Guarantee of Origin (GO) premium of €45/MWh** gives a combined value of roughly €75/MWh, or about 81 USD/MWh at an exchange rate of 1.08 USD/EUR.

The comparison is therefore:

Indicative current biomethane commodity value: around 81 USD/MWh
Maximum NZF compliance value per MWh: a range of 84–104 USD/MWh

This suggests that, at least at the commodity level, the regulation-induced willingness to pay under IMO NZF could be high enough to make shipping a competitive buyer of biomethane. However, this benchmark does not include liquefaction, logistics, terminal handling, or bunkering costs, and should therefore be interpreted as a high-level, illustrative market check rather than a delivered fuel price comparison.

* The Dutch TTF Natural Gas Futures had a 2025 average around 30 EUR/MWh. However, the closure of the Strait of Hormuz has seen this increase to 42 EUR/MWh. When using this higher 42 EUR/MWh TTF price, we would end up with an indicative biomethane commodity value (including GO price proxies) around 87 USD/MWh. This is still within the implied maximum NZF-induced willingness to pay range.

** RNG GO certificates (Guarantees of Origin/renewable gas certificates) are tradable attributes used to evidence that 1 MWh of renewable gas (e.g., biomethane/RNG) was produced and injected into the gas system, enabling credible tracking/claims of renewable supply. We use an average RNG GO certificate price of 45 EUR/MWh across four European markets, based on S&P Global Commodity Insights (Platts) certificate price assessments. RNG = renewable natural gas.

Additional constraints and enablers

The analysis in this article focuses on the potential scale of biomethane supply relative to regulated demand under the IMO NZF. Whether shipping can access and ultimately use these volumes by 2030 depends on how policymakers choose to address several additional factors.

Mass balancing is a critical enabler

If shipping has to rely only on physically segregated biomethane supply chains, biomethane’s role before 2030 will likely remain limited. Dedicated liquefaction at production sites is still scarce, and direct delivery of physically separated liquefied biomethane to marine bunkering locations is difficult to scale quickly and cost-effectively.16

However, if the IMO allows globally harmonized mass balancing, biomethane could be injected into the existing natural gas grid, with its sustainability attributes tracked through a certified chain of custody and allocated to maritime fuel consumption. That would allow shipping to access biomethane’s abatement value through existing infrastructure, making biomethane a far more scalable compliance option before 2030.11

Similar chain-of-custody systems are already used in aviation (ICAO),17 where they are intended to support scale-up and investment when strict physical segregation is impractical. The policy rationale in these sectors is clearly to make sustainable supply commercially accessible earlier and at a lower system cost.

Designing an effective mass-balancing framework for biomethane as a shipping fuel raises a few additional considerations. First, certification is a necessary part of any mass-balancing system. Without a harmonized certification standard, it would be difficult for mass balancing to function within a global measure. Second, access to the natural gas grid remains limited in many regions outside the most interconnected markets, such as the EU.11 Finally, methane leakage can vary across natural gas grids and associated infrastructure.18 If biomethane is allocated to shipping through a mass-balancing framework linked to the gas system, the treatment of these fugitive emissions would need to be clearly defined. Counting fugitive emissions could affect the life-cycle emissions associated with biomethane and therefore increase its abatement cost.
The methane-capable fleet may constrain uptake

Biomethane can only be used by ships capable of consuming methane-based fuels, such as LNG and liquefied biomethane (LBM). Market data (including orderbook dynamics) suggests that by 2030, the global container fleet capable of burning LBM could reach around 2.3 million DWT, or around 70% of the total methane-capable dual-fuel fleet in 2030. Because of long lead times at shipyards, this 2030 number is unlikely to change substantially. Beyond the vessels themselves, the broader value chain (including bunkering infrastructure such as bunker barges and terminal capacity at key ports) would also need to scale up in parallel.

If all of these methane-fueled container vessels were to use solely LBM, shipping’s biomethane demand could reach roughly 11 Mt LSFOeq. This estimate is based on the assumed LNG consumption of 500 m3/day for a representative 20,000 TEU container vessel. On that basis, shipping could absorb up to around 56% of the total biomethane supply projected in our 2030 base case scenario. However, the modeled demand for low-emissions fuels for IMO NZF compliance grows quickly in the decade after 2030 (Table 1). Failure to build enough vessels that can actually use biomethane could constrain the industry’s ability to leverage this fuel pathway for emissions abatement and regulatory compliance.

This methane-capable fleet constraint is partly endogenous: if regulation creates a credible demand signal for a given fuel, fleet investment will likely respond over time. At the same time, flexibility mechanisms such as pooling under regulations like FuelEU Maritime can make biomethane more commercially attractive by allowing compliance benefits to be shared across a wider group of ships. This can strengthen incentives to use biomethane even if direct uptake remains concentrated in the methane-capable fleet.

The IMO NZF may provide an analogous flexibility mechanism on the user side through Surplus Units (SUs). Because ships below the direct compliance target can generate transferable SUs, biomethane use on methane-fueled ships could, in principle, create compliance value that is monetized more widely across the fleet. This would not remove the need for methane-capable ships, but it could soften the practical uptake constraint by increasing the system-wide value of biomethane use.
Other low-emissions fuel pathways may also compete for early alternative fuel demand

Biomethane is not the only potential source of relatively low-cost abatement. Other pathways, including biodiesel and ethanol, will also likely play a role as near-term compliance options. In particular, biodiesel can be readily blended with conventional maritime energy carriers like LSFO,19 meaning that it can deliver abatement to the majority of the existing fleet using internal combustion engines.

With that said, the long-term availability of these other pathways is likely to be shaped by feedstock constraints, rising marginal costs, and competition across sectors.20 In the EU regulatory framework, crop-based biofuels face tighter constraints and are expected to play a diminishing role over time. The availability of non-food/non-feed biomass is low, with intense competition from aviation and road transport.5 However, under current IMO rules, there is no equivalent explicit limit on first-generation biofuels.
Cross-sectoral competition could affect shipping’s access to biomethane

Even if shipping is willing to pay for biomethane under specific regulatory frameworks (such as the IMO NZF), stronger or overlapping regulation in other sectors21 could pull supply away from maritime use. The practical role of biomethane in shipping will therefore also depend on the wider policy environment shaping demand for the same molecules.

Conclusion

In this article, we have presented an analysis building up from relevant feedstock and embedding biomethane’s plausible abatement cost in a supply curve of other low-emissions energy sources. The results suggest that biomethane could cover a significant share of early NZF compliance demand if mass balancing is recognized under a robust global framework.

However, converting potential supply into realized demand hinges on several factors, including enabling regulations that support robust mass balance accounting. Moreover, cross-sector demand from other competing users and the complementary investments in methane propulsion in shipping remain uncertain. The presence of greater willingness to pay in other sectors or the absence of a sufficient installed user base for the molecule in the fleet would blunt biomethane’s value to the maritime sector.

In summary, our results support the potential for shipping to secure meaningful abatement at scale – if appropriate regulations on climate change-causing emissions are in place. READ MORE