There is broad agreement that several barriers are currently hindering the growth of the Swedish biogas market. Since 2015, market growth has slowed and the establishment of new biogas plants has progressed at a sluggish pace. At the same time, the use of biogas in Sweden has increased slightly. To meet demand, gas is therefore being imported, including imports from Denmark.
For the Swedish biogas market to grow, there is a need to improve communication about the benefits of biogas, according to Mikael Ottosson. At the same time, both researchers emphasise the importance of increasing domestic production. Mikael Ottosson highlights several advantages of Swedish biogas, including the fact that it is a domestic energy source that can be scaled up.
“We can produce more biogas. This is an advantage from a security perspective. It provides fuel or energy for industry that we do not need to import. This is a key benefit that many other system solutions lack,” he says.
Biogas production also contributes to waste management and delivers not only gas, but also biofertiliser.
“There is a circular aspect to it,” says Mikael Ottosson.
Different types of barriers
Despite these advantages, there are several obstacles that in different ways hinder market growth. In a recently published study the researchers have, for the first time, compiled and categorised the most significant barriers.
They identify three overarching categories:
- Barriers related to market structures
- Barriers related to market behaviour
- Barriers related to the value proposition
- Barriers related to market structure
The first category includes barriers linked to infrastructure, production, policies, regulatory frameworks and similar structural factors that influence what is possible in the market.
"Everything that affects the structural conditions under which the market operates is included in this category", Mikael Ottosson explains.
Uncertainty surrounding future regulations is identified as the most significant barrier. In Sweden, a range of state support schemes and tax regulations have long benefited both biogas production and biogas use.
“These support mechanisms have changed quite substantially over the years, which creates uncertainty when it comes to investing in biogas production facilities,” says Mikael Ottosson.
This uncertainty also applies to policies and decisions made at EU level.
“There is a great deal happening within the EU related to sustainability and how biofuels are viewed in the future, including perspectives on internal combustion engines,” he explains.
The second most significant barrier concerns permits and licensing processes.
“Within the industry, it is often said that it can take up to seven years from having a plan to build a plant until it is actually in operation. These are very lengthy permitting processes.”
Market behaviour
The second category, barriers related to market behaviour, concerns attitudes, perceptions and behavioural factors influencing biogas. Growth in the Swedish biogas market has stagnated. In their article, researchers at Linköping University identify the barriers preventing further development, in the hope that these can be addressed and overcome.
Competition from electrification is considered the most significant barrier in this category.
“In Linköping, there used to be almost exclusively biogas buses. Today, they are electric buses. There is substantial competition from other sustainable alternatives,” says Mikael Ottosson.
“Electrification is already a viable option, even though we are also seeing setbacks in this area, for example in relation to Northvolt.”
The second most important barrier is lobbying against biogas and biofuels. According to the researcher, biogas is sometimes portrayed negatively in public debate. The biogas sector lacks a unified industry association, which may partly explain why it has struggled to respond effectively, he suggests.
“There is generally a lack of communicative capacity within the biogas sector when it comes to highlighting all the advantages this solution offers.”
The value proposition
The third category concerns barriers linked to the way the value of biogas is presented to customers. At the top of the list is what the researchers describe as a historical misstep. Too much emphasis has been placed on presenting biogas solely as a transport fuel.
“Biogas can be used in many other applications. It can be used in industry, for example to replace liquefied petroleum gas or natural gas. It can also be used in shipping. For various reasons, biogas has primarily been used within the transport sector in Sweden. This has led to it being perceived largely as a transport fuel, which may have caused other market opportunities to be overlooked,” says Mikael Ottosson.
Given that electrification is a strong competitor within the transport sector, growth in other areas is essential. The greatest potential may lie within industry, according to the researcher.
“Industry also needs to transition and replace fossil energy with sustainable alternatives, and biogas is a very suitable solution for that.”
By clearly specifying what constitutes a barrier, it becomes easier to identify what is required to change it, at least at an overarching level.
The article is based on previous research, surveys, interviews and two workshops. In total, 37 barriers are identified, each affecting market development to varying degrees. Mikael Ottosson and Johnny Danell hope that their research will be useful for both other researchers and practitioners.
“One can look at the barriers we have identified and compare them with one’s own operations. Which of these can we influence? What can we do better? How do these barriers affect our business?” says Mikael Ottosson.
Expected outcomes
Increased awareness of existing barriers could be an important step towards overcoming them.
What impact do you hope your research will have?
“Hopefully, it will help other researchers working on the biogas market gain a clearer understanding of the different barriers to market development. Until now, research has been quite fragmented, with very different methods being used. We hope this framework can be applied by others. Ideally, it will also prove useful for practitioners,” says Johnny Danell.
Proposed measures
While the report identifies a wide range of barriers, Mikael Ottosson also outlines two measures that could help the Swedish biogas market grow. First and foremost, there is a need to improve how the benefits of biogas are communicated to policymakers.
“This also requires a strong, coherent voice. Without a strong voice, there is a greater risk that alternatives such as electrification will ultimately be the option chosen by politicians.”
He also sees advantages in greater consolidation within the sector, enabling companies to become more competitive and increase production capacity.
“The larger a company becomes, the more resources it can allocate to communication and other strategic efforts,” he concludes.
