Germany’s biogas industry is showing signs of a significant rebound after years of stagnation, driven by major strategic investments in the country’s east and a growing recognition of the fuel’s role in stabilizing a grid increasingly dominated by wind and solar power.
Following a period marked by low electricity prices and regulatory uncertainty, sentiment in the sector has shifted. Leipzig-based energy utility VNG AG recently signaled strong confidence in the market through its subsidiary, Balance, acquiring ten biogas plants across Saxony, Saxony-Anhalt, Brandenburg, and Mecklenburg-Western Pomerania in October.
The acquisition adds approximately 245 megawatts of thermal output to the company’s portfolio—theoretically enough to supply over 221,000 households. VNG described biogas and biomethane as “strategic cornerstones” of its operation, pledging to invest up to 5 billion euros ($5.2 billion) in decarbonized sectors by 2035.
Balancing the Green Grid
The renewed interest comes as Germany hits new highs in renewable generation. According to the Federal Statistical Office, renewables accounted for a record 64.1 percent of electricity generation in the third quarter of 2025.
Despite this potential, Dominik Most, Professor of Energy Economics at TU Dresden, noted that the sector’s flexibility remains underutilized.
“The plants do not have very large flexibility and largely generate electricity from biogas continuously,” Most said, citing the lack of economic incentives for operators to build larger gas storage facilities needed for peak-demand dispatching.
Industry Outlook
The recovery is not limited to utilities. Claus Sauter, CEO of Saxony-Anhalt-based biofuel producer Verbio, recently stated that the conditions for a market recovery are now in place following a slump in prices.
However, the German Farmers’ Association (DBV) remains cautious. While acknowledging the economic opportunities for rural areas, DBV Secretary General Stefanie Sabet warned that the sector requires clearer political guidelines.
“Planning security is therefore the most urgent concern for agriculture,” Sabet said, calling on policymakers to establish a robust framework to support long-term expansion.
The BMWK confirmed it is developing new legal frameworks to ensure bioenergy has a defined role in the future electricity mix, aimed at reducing greenhouse gas emissions and cutting reliance on natural gas imports.
