The aim is to triple the production of biogas and the more purified biomethane from the current annual 200 million cubic meters to some 600 mcm by 2030, Deputy State Secretary Viktor Horváth of the Ministry of Energy announced on May 23.
Speaking at the first Budapest Biogas Summit, he said that within this total, production of the more valuable (and more expensive to produce) biomethane gas would surge by some 40 times, from the current tiny 5 mcm per annum to 200 mcm.
“Biogas is very important for us. It is a green energy source which is reliable and weather independent, […] it can enhance sustainability within the agricultural and energy sectors, providing very important social-economic benefits for those involved, […] and it is the shortest and cheapest way to achieve the EU obligations which are set by the RED III directive,” he said in the keynote address.
In truth, the headline production figures quoted are not quite what they seem: 600 mcm is only about 7.5% of Hungary’s total annual gas consumption of eight billion cubic meters (bcm), moreover, the production data includes gas that is immediately used in self-consumption in the production process, which in the case of biomethane units amounts to approximately 17% of gross production.
Nonetheless, Hungary is currently a laggard in biogas production compared to the EU average, including regional peers Poland and the Czech Republic, as Horváth admitted.
As a result, the government “wanted to make a big step to catch up,” he said, and numerous measures, including subsidies and non-financial measures, easier permitting regulations and educational courses for farmers, are being planned to exploit the significant potential in the country.
In particular, while small, local biogas plants will also be encouraged, the government will prefer larger schemes (which are better suited to the business case for producing biomethane) with the target of having 100 biogas plants operational by the end of the decade, he said. Of this between 20 and 30 are envisaged to be large capacity, more expensive units.
Grants of between HUF 500 mln and HUF 5 bln will be made available for the bigger plants, while smaller units may attract up to HUF 800 mln in funding, although to date the production capacity defining a larger unit has not been published.
As a result, the financial support could make up between 45-65% of the total project costs, Horváth said, adding that it will cover the entire value chain of a production facility, from the collection, storage and preparation of feedstock via the construction of the biogas facilities to post-production storage of gas and grid connections where necessary.
Naturally, talk of subtantially expanding biogas production raises questions, not least of which is the need for feedstock. The Energy Ministry has done its homework on this, with animal manure the prime source, estimated to provide 55% of the total demand, and by-products of the agricultural and food processing sectors making up the bulk of the remainder.
Location is another issue, with Horváth stressing that though western Hungary has good potential regarding sources for animal manure, access to the transmission grid could be problematic in that region. In contrast, in northern Hungary, the situation is reversed.
“So, the message from us is, please look at both sides of the market,” he cautioned potential investors.
Such investors are now awaiting the call for submissions in June, assuming the final details can be worked out as expected. Since this includes the vexed issue of regulation this is by no means certain.
Indeed, as Horváth himself strongly hinted, getting this far has been something of a grind, saying that it had taken 18 months to create the strategic plan as it stands.
“You know, biogas and biomethane is an issue where we have to reconcile interests coming from the agricultural field, energy field, land-use issues, I would say at least eight or ten policy issues are put on the table if you are handling biogas and biomethane policy,” he said later, speaking as part of a conference panel.
Discussions with the Ministry of Agriculture appeared to be a particularly thorny area, taking a full year to “hammer out” an agreement.
“The biggest challenge for us is, how to put it, how we can move other policy fields in the same direction, how we can have discussions – I don’t want to mention any of these policy fields, because they are not represented here, but you need another type of thinking within the government as such,” he said.
“You cannot think in blocks, you have to think across all of these, and that’s quite a big challenge, for us, but also for other colleagues from other policy departments. Here we need a learning curve, and we are somewhere at the beginning of this,” he added.
Europe has seen remarkable growth in the biogas and biomethane sector, Anna Onida, Policy Officer of the European Biogas Association (EBA) told the summit audience.
“In 2023, Europe was able to produce 22 bcm of biogas, which is more than the entire natural gas consumption of Belgium, Denmark and Ireland combined,” she said.
Focusing on biomethane specifically, the EBA estimates that production in 2040 in the EU 27 is at 101 bcm. “That alone can cover 80% of the gas demand of western Europe,” she added.
Szabolcs I. Ferencz, chief executive of FGSz, Hungary’s high-pressure gas transmission company, suggested an in-depth study of the Danish Biogas Industry could prove a valuable guide for the Hungarians playing catch-up. These are his words when in a panel discussion.
“If we look at the Danish case, where Denmark is kind of highlighted as a kind of success story of biomethane, yes, of course at first we think of the highly developed Danish agriculture, but I don’t think that this is the key to their success.
“I think one key element of the success is that all the regulatory elements have been in place from the very beginning, from production incentive schemes, until injection, until interoperability in between the SO [gas distribution system operator] and TSO [high pressure, transmission system operator] until the green certificates.
“So, everything was in place from the very beginning, and everybody was able to calculate in a predictable manner how the business case could be developed.
“And the only variable system element is the production incentive, because, as time passes, production plant [becomes] more and more efficient.
“So now they don’t need such high subsidies as at the beginning, and now the Danish government is thinking of giving instead of cash into the pockets of the producers, rather a tax allowance for the farmers, but all the other elements are stable, and I think this gives the biggest advantage for Danish biomethane production.”
This article was first published in the Budapest Business Journal print issue of May 30, 2025.
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