Biomethane emerges as data centres’ flexible energy option

Rising electricity demand and long grid waits are pushing data centres to explore biomethane, offering dispatchable, storable renewable power.

The numbers are stark. Global electricity consumption by data centres is on track to more than double between 2024 and 2030, reaching roughly 945 terawatt-hours, a level of demand comparable to the entire output of Japan.

The International Energy Agency identifies AI as the primary driver, and operators feel the pressure daily: in tech-intensive markets such as Virginia in the United States, data centres already account for more than a quarter of total power consumption. In Singapore, the figure exceeds seven per cent of the city-state’s entire electricity supply.

For data centre developers, the queue for new electricity connections has become one of the industry’s most acute operational constraints. In the UK, the wait for a new grid connection can stretch to a decade. Meanwhile, in Ireland, regulators are tightening renewable sourcing expectations for energy-intensive industries through initiatives such as the Large Energy User Action Plan (LEAP).

Against this backdrop, a conversation that once revolved almost exclusively around solar and wind is expanding to include a less glamorous but increasingly practical option: biomethane and biogas.

Produced through the anaerobic digestion of organic matter, biomethane can be injected directly into existing gas networks, combusted in on-site generation equipment, or used to fuel backup power systems, all without waiting for the grid connections that can take the better part of a decade to secure in congested markets.

The appeal is not simply about carbon credentials, it is about dispatchability – the ability to generate power on demand, around the clock, regardless of weather. In that respect, biomethane occupies a space that solar and wind cannot: a firm, storable renewable that works with infrastructure already in the ground.

UK case study: Moor Bioenergy plant

Biomethane provides an alternative solution. Because it travels through the existing gas network rather than new electrical infrastructure, connection timelines are far shorter. Future Biogas, one of the UK’s largest biomethane producers, argues that the UK’s national gas grid effectively functions as the country’s largest battery, capable of storing more than 650 gigawatt-hours of energy per day.

Critically, this means that biogas production facilities do not need to be co-located with the data centres they serve, an advantage in a market where site selection is already constrained by land, power, and planning.

The company’s Moor Bioenergy plant in Lincolnshire, commissioned in 2025 as the UK’s first unsubsidised industrial-scale biomethane facility, is producing more than 100 gigawatt-hours of renewable gas annually under a 15-year agreement with AstraZeneca.

In September 2025, Future Biogas went a step further, launching carbon dioxide capture at the site, capturing more than 14,000 tonnes of biogenic CO₂ per year for use in the food and beverage sector. The company’s CEO, Philipp Lukas, has said the ambition is to make the facility carbon-negative, turning it from a renewable energy source into a net carbon remover.

The development attracted attention from policymakers and utilities earlier this year. A delegation of more than 20 organisations visited the Lincolnshire site in February 2026, examining how the biomethane model might translate to Ireland’s own market – either through domestic production or by sleeving supply through the existing UK interconnectors. Ireland has set a target of 5.7 terawatt-hours of biomethane per year by 2030, with data centres explicitly identified among the priority sectors.

Philipp Lukas, CEO of Future Biogas, said: “Data centre developers and investors need answers as to whether, where and when grid connections and capacity will arrive, and value is being lost while they wait for it.

“Biomethane supplied through the grid to Behind-the-Meter power generation offers a faster route to market, making use of existing resilient infrastructure. Biomethane also aligns with the delivery of net-zero targets with the ability to deploy a climate-positive solution.

“The operators that win will be those who can deliver on a megawatt-to-market strategy with schedule certainty, resilience, and a clear, genuine and auditable climate positive story.”

South east Asia moves on biomethane

The momentum is not confined to the British Isles. In Southeast Asia, Indonesian gas distributor PT Pertamina Gas Negara (PGN) signed a memorandum of understanding with NeutraDC Singapore in August 2025. Setting out plans to supply biomethane derived from palm oil mill effluent to data centre projects in Singapore from 2027. The agreement forms part of PGN’s broader “Step Out” strategy, which aims to develop low-carbon businesses within the Pertamina Group, treating biomethane as what the company described as a “quick win” renewable fuel.

The city-state’s government has positioned biomethane as one of a small number of approved green energy sources under its Green Data Centre Roadmap and its successive calls for applications for new capacity. Under the latest round, announced in late 2025, each proposed data centre must source at least half of its power from eligible green energy options.

Singapore launched a 300-megawatt biomethane import trial in September 2025 and plans to appoint power generators as trade aggregators from early 2026. The signal to the market is clear: the government is not waiting for the technology to mature; it is actively structuring procurement to pull it through.

European policy and production trends

At the European level, the policy environment is also shifting. The EU’s Renewable Energy Directive has broadened the scope of obligations to cover all uses of biomethane, while the European Commission is pursuing a target of 35 billion cubic metres of annual production by 2030, roughly five times current output.

Production across the EU grew by three per cent in 2024, with biomethane specifically expanding by 14% year on year, driven by new capacity in France, Italy, Denmark and the Netherlands.

The Commission’s Data Centre Energy Efficiency Package, expected in April 2026, is likely to embed sustainability reporting requirements that make the provenance of energy more visible to regulators and investors alike.

Challenges: supply, certification, and cost

None of this resolves the fundamental challenge facing any operator considering biomethane: can you get enough of it, reliably, at a price that works? Supply chain consistency is the issue most frequently cited by sceptics, and it is a legitimate concern.

Unlike solar or wind, which rely on a global supply chain, biomethane depends on sourcing organic feedstock and delivering it to a digestion facility, as well as supplying the gas to the grid.

The certification issue remains problematic for major corporate buyers. Future Biogas and over 145 organisations called for clearer guidance from the GHG Protocol in May 2025, highlighting the need for reliable, traceable certification for biomethane. Without a system similar to renewable energy certificates, buyers struggle to demonstrate emissions reductions from biomethane use in Scope 1 reporting.

In the EU, the Union Database system, expected to become operational for biogases in 2025, is intended to facilitate the tracking of proof-of-sustainability certificates required under the Renewable Energy Directive. Whether it will be sufficient to unlock corporate procurement at data centre scale remains to be seen.

Cost competitiveness is the third variable. The unsubsidised status of Future Biogas’s Moor Bioenergy plant is commercially significant, as it demonstrates that the economics can work without government support in the right market conditions. But it is a single data point, and the conditions may not be easily replicated everywhere. In regions where grid-injected biomethane is treated as zero-emission under the EU Emissions Trading Scheme, as it is in Ireland, the commercial case strengthens considerably.

Biomethane’s role in decarbonisation

The reality is that biomethane is unlikely to become the sole or even primary power source for most data centres. The UK’s Green Gas Taskforce has estimated domestic potential at around 100 terawatt-hours per year by 2050, a substantial figure but still a fraction of total gas consumption.

What biomethane can do is fill specific, strategically important gaps: bridging the period before grid connections come online, providing dispatchable backup that avoids the emissions profile of diesel generators, and contributing to a credible Scope 1 decarbonisation story for facilities that need one now rather than in 2035.

Industry leaders gathering at Datacloud Energy Europe will address the urgent challenge of powering data centres, which already account for 1.5% of global electricity use and could reach 945 TWh by 2030. The panel will explore scalable and efficient solutions, the future of legacy and giga-campus sites, the rising cost of energy for AI operations, and the role of renewables, nuclear, and energy storage. Experts will also examine the impact of PPAs, energy provider partnerships, and how data centres can better integrate with energy grids.

Philipp Lukas of Future Biogas, Harmen Dekker from the European Biogas Association, and Dr Bojana Bajzelj of BeZero Carbon, are set to discuss the prospects of biomethane and durable Carbon Dioxide Removals (CDRs) for data centres at Datacloud Energy Europe.

Their panel will address the challenges of scaling sustainable solutions, maintaining reliability, and supporting growth, as operators face increasing pressure to decarbonise. The session aims to offer practical insights into what can be feasibly contracted and delivered across Europe within the next three to seven years, focusing on realistic pathways amidst supply, certification, and cost hurdles highlighted by recent industry developments.

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