INTERVIEW: Biomethane to play pivotal role in Asia energy transition: Engie

Asia is approaching a pivotal moment in low-carbon fuel development, as markets across Southeast Asia and China begin building the commercial and regulatory foundations needed to scale biomethane adoption, unlike Europe, which has spent more than a decade incorporating biomethane into its energy system.

Biomethane is poised to become an increasingly important component of Asia's energy transition -- not as a substitute for hydrogen or ammonia, but as part of a broader portfolio of complementary solutions to help decarbonize the gas infrastructure that underpins regional energy systems, Jules Dufournier, vice president for Asia-Pacific and Australia and New Zealand, at French electric utility company Engie, told Platts, part of S&P Global Energy.

"Natural gas will remain an important part of Asia's energy mix for many years," Dufournier said. "As renewable electricity expands, the challenge is no longer simply replacing fossil fuels, but decarbonizing the gas that industries and power systems will continue to rely on. Biomethane offers a practical pathway because it can leverage existing infrastructure while reducing emissions."

The long-term fundamentals supporting biomethane are becoming increasingly compelling, according to Dufournier.

Rising electricity demand, corporate decarbonization commitments and heightened concerns over energy security are driving governments and businesses to explore a broader mix of low-carbon fuels, Dufournier said.

However, scaling up biomethane production requires more than just production capacity. "A successful market depends on trusted certification systems, transparent pricing, reliable supply chains and bankable commercial structures," Dufournier said. "These are the market fundamentals that give investors, producers and customers the confidence to commit capital and enter long-term agreements."

Engie envisions itself as more than just a biomethane supplier, according to Dufournier.

Drawing on decades of experience in global energy trading, the company seeks to help build the commercial ecosystem necessary for the maturation of Asia's biomethane market, Dufournier said.

This involves developing market-making capabilities, risk management solutions and pricing mechanisms that enhance liquidity and support investment throughout the value chain, he said.

The company's experience in Europe serves as a solid foundation for this ambition, according to Dufournier.

Engie currently supplies biomethane to industrial customers such as Arkema, Sanofi, PepsiCo, and BASF under long-term agreements, Dufournier said.

With about 1.2 terawatt-hours of annual installed biomethane production capacity today and a target of reaching 10 TWh/year by 2030, Engie believes it can transfer its proven commercial and operational expertise to emerging markets in Asia, Dufournier said.

ASEAN challenges

In the Association of Southeast Asian Nations, China, and Japan, the sustainable supply of feedstock, certification standards, infrastructure and long-term demand must all advance simultaneously for biomethane to reach meaningful scale, according to Dufournier.

"Every emerging energy market follows a similar trajectory," Dufournier said. "Ten years ago, solar power was considerably more expensive than it is today. Innovation, investment and scale fundamentally changed its economics. We expect a similar evolution across biomethane, hydrogen, ammonia and other low-carbon molecules."

Instead of treating these fuels as competitors, Dufournier advocates a technology-neutral strategy. Different sectors and geographies require tailored solutions, with biomethane, hydrogen, ammonia and e-methane each best suited to applications where they provide the greatest technical and economic benefits, he said.

Japan exemplifies that philosophy. While hydrogen and ammonia remain central to the country's decarbonization strategy -- particularly in the power sector -- Dufournier said biomethane offers a complementary pathway. By utilizing existing gas infrastructure with minimal modifications, biomethane enables emissions reductions without compromising system reliability, he said.

Singapore's role

Singapore is well-positioned to drive regional market development despite its limited domestic production capacity, Dufournier said, identifying the city-state's most significant role as a demand center, trading hub and regulatory leader.

"Singapore has the ingredients to become ASEAN's market-maker for low-carbon fuels," Dufournier said. "Its established LNG trading ecosystem, financing capabilities and commitment to developing certification frameworks can help create the demand signals and commercial confidence needed to unlock investment across the region."

Hydrogen also remains an integral part of Engie's long-term outlook, according to Dufournier. He anticipates that hydrogen-derived fuels such as ammonia and e-methane will gain traction first, particularly in hard-to-abate sectors including heavy industry, shipping and dispatchable power generation.

Platts assessed the India renewable hydrogen term contract at $3.2429/kg on July 30.

Dufournier expects that energy security will increasingly shape investment decisions alongside climate objectives. Recent geopolitical tensions have underscored the importance of supply resilience and diversification, reinforcing the need for locally produced renewable energy and a wider portfolio of low-carbon fuels, he said.

"The energy transition is no longer driven solely by decarbonization," Dufournier said. "Security of supply, affordability and resilience have become equally important. The future energy system will not rely on a single technology or molecule. It will be built on complementary solutions working together—and biomethane has an important role to play within that portfolio."

The war in the Middle East has highlighted the vulnerabilities associated with heavy reliance on a limited number of energy sources and supply routes.

"While decarbonization goals, technology costs and regulation remain important drivers of the energy transition, considerations around energy security, sovereignty and resilience are now shaping energy strategies around the world," Dufournier said.