Portugal has the resources. What it lacks is operational clarity.
Portugal stands at a familiar crossroads in the long human story of energy transformation: possessing the raw materials and the stated ambition, yet struggling to translate vision into practice. The country's energy traders, gathered under ACEMEL, have identified biomethane — gas drawn from organic waste — as a missing bridge between Portugal's renewable electricity achievements and the harder-to-reach corners of its economy. The obstacle is not nature, nor technology, but the slower work of aligning bureaucracies, financing structures, and regulatory frameworks so that possibility becomes reality.
- Portugal's renewable electricity buildout has raced ahead, but heavy industry, heating, and transport remain stubbornly dependent on fossil fuels — and biomethane is the candidate most capable of reaching them.
- Licensing processes fragmented across government agencies are stalling projects, deterring investors, and turning a strategic national resource into a bureaucratic waiting room.
- Financing structures penalize biomethane's longer development timelines, leaving the upstream infrastructure — the biodigesters that make everything else possible — chronically underfunded.
- ACEMEL is pushing for uniform technical criteria, fixed administrative deadlines, regulated cost-sharing for network connections, and explicit access to EU financing instruments designed for biogas.
- Beneath the biomethane debate lies a broader concern: a weakened liberalized gas market, repeatedly patched with temporary measures, that must be gradually restored to full competition if any of these reforms are to land on stable ground.
Portugal's energy traders have spotted a gap in the country's fossil fuel exit strategy. ACEMEL, the association representing traders in the liberalized market, argues that biomethane — produced from agricultural, food, and wastewater organic waste — could power the sectors that renewable electricity cannot easily reach: heavy industry, heating, and transport. Portugal approved a Biomethane Action Plan in 2024 stretching to 2040, but the sector remains underdeveloped, caught between bureaucratic friction and unclear rules.
ACEMEL president João Nuno Serra frames the challenge plainly: Portugal is failing to align climate ambition with efficient regulation and competitive markets. Licensing processes are complex and interpreted inconsistently across agencies — the Portuguese Environment Agency and the Directorate-General for Energy and Geology operate without effective coordination, fragmenting approvals and slipping timelines. The association calls for uniform technical criteria, fixed administrative deadlines, and clear rules for injecting biomethane into the public gas network.
Financing compounds the problem. Biomethane projects take four to five years to develop, longer than most renewables, yet receive less policy support. Public funding concentrates downstream, leaving biodigesters — the production infrastructure everything else depends on — chronically short of capital. ACEMEL wants the sector embedded in regional smart specialization strategies and given structured access to European biogas financing instruments.
The regulatory architecture also needs rebuilding. Transposing the EU's RED III Directive into Portuguese law must establish certification rules, network access conditions, injection tariffs, and market mechanisms allowing biomethane to compete fairly with natural gas. Currently, renewable gas producers bear the full cost of network connection; ACEMEL argues these should become regulated assets spread across the system. A planned Biomethane Atlas would map national production potential against waste valorization, circular economy, and energy independence goals.
ACEMEL situates all of this within a wider concern: Portugal's liberalized gas market has been weakened by a temporary regulatory regime, repeatedly extended, that has allowed customers to retreat to the regulated market. A gradual return to full competition, the association argues, would create the balanced conditions under which biomethane — and the broader gas sector — could genuinely thrive. The resources exist. The policy framework exists. What remains missing is the operational clarity and financial architecture to make the transition real.
Portugal's energy traders have identified a gap in the country's transition away from fossil fuels, and they believe biomethane—gas produced from organic waste—could fill it. The Association of Energy Traders in the Liberalized Market, known as ACEMEL, argues that biomethane represents a strategic opportunity to accelerate decarbonization, strengthen energy security, and make use of domestic resources that would otherwise go to waste. The timing matters: Portugal has already built substantial renewable electricity capacity and is now mapping zones for accelerated renewable energy deployment. But biomethane, which can power sectors difficult to electrify—heavy industry, heating, transport—has fallen behind.
The Portuguese government approved a Biomethane Action Plan in 2024 covering the period through 2040, establishing an integrated strategy to develop the market. The plan positions biomethane as a tool to reduce greenhouse gas emissions, cut natural gas imports, and create value from organic waste streams already present in agriculture, food processing, and wastewater treatment. Biomethane plants can be sited where feedstock already exists, creating efficiency gains. Yet the sector remains underdeveloped, hampered by bureaucratic friction and unclear rules.
According to João Nuno Serra, ACEMEL's president, the real test is whether Portugal can align climate ambition with industrial policy, efficient regulation, and competitive markets. Right now, it is failing on several fronts. Licensing processes for biomethane projects remain complex and subject to inconsistent interpretation across different government agencies. Projects face delays, investors encounter uncertainty, and timelines slip. The Portuguese Environment Agency and the Directorate-General for Energy and Geology do not coordinate effectively, creating a fragmented approval landscape. ACEMEL calls for uniform technical criteria, fixed administrative deadlines, and clear rules for injecting biomethane into the public gas network.
Financing presents another barrier. Biomethane projects typically take four to five years to develop—longer than many renewable technologies—yet they do not receive the same policy support. Public funding tends to concentrate downstream in the value chain, leaving upstream infrastructure like biodigesters underfunded. Without investment in these production facilities, the national ambition for biomethane will struggle to scale. ACEMEL argues the sector should be explicitly included in regional smart specialization strategies and given structured access to European financing instruments designed for biogas infrastructure.
The regulatory framework itself needs work. The European Union's RED III Directive must be transposed into Portuguese law in ways that establish clear certification rules, define access conditions to gas networks, set injection and transport tariffs, and create market mechanisms allowing biomethane to compete for end-user customers. Currently, producers of renewable gases bear the full cost of connecting to networks. ACEMEL wants these connection costs treated as regulated assets of network operators, spreading them across the system rather than penalizing individual producers. A planned Biomethane Atlas should map national production potential and align it with renewable gas targets, waste valorization, circular economy goals, and energy independence.
Beyond biomethane itself, ACEMEL situates the issue within a broader concern about Portugal's gas market. The liberalized natural gas market has been weakened by a temporary regulatory regime that has allowed customers to shift to the regulated market, a shift that has been repeatedly extended. The association wants a gradual return to full competition in the free market, which would create more balanced conditions for all operators and improve overall market efficiency. Biomethane development should happen alongside this rebalancing, creating a more dynamic and competitive gas sector overall.
The stakes are concrete. Biomethane can reduce emissions in sectors where electrification is difficult or expensive. It can create value from waste streams. It can reduce dependence on imported natural gas. But none of this happens without removing the obstacles—the tangled licensing, the financing gaps, the regulatory confusion, the unfair cost allocation. ACEMEL's message is straightforward: Portugal has the resources and the policy framework. What it lacks is the operational clarity and financial support to make the transition real.
Notable Quotes
Biomethane is an opportunity Portugal should not waste. It is a test of whether we can align climate ambition, industrial policy, efficient regulation, and competitive markets.— João Nuno Serra, ACEMEL president
The Hearth Conversation Another angle on the story
Why does biomethane matter now, specifically? Portugal already has renewable electricity.
Electricity solves some problems, but not all. Heavy industry, shipping, heating in winter—these sectors are hard to electrify. Biomethane can decarbonize them using waste that already exists. It's not competing with renewables; it's complementing them.
So the government has a plan. What's the actual problem?
The plan exists on paper. The real friction is in execution. A company wanting to build a biomethane plant faces licensing that takes years, with different agencies interpreting rules differently. Banks won't finance projects with that much uncertainty.
Who bears the cost of connecting to the gas network?
Right now, the producer does. ACEMEL wants that cost spread across the network operator's regulated assets, like it works for other infrastructure. It's a fairness question—you're asking one company to pay for something that benefits the whole system.
What about the money? Is there enough European funding available?
There is, but Portuguese biomethane projects aren't accessing it systematically. They're not explicitly included in regional development strategies, so they fall through the cracks. The sector needs to be named and prioritized.
How long does a biomethane project actually take?
Four to five years from start to operation. That's longer than solar or wind. Public funding tends to support faster technologies. Biomethane needs patient capital and policies designed for longer development cycles.
What happens if nothing changes?
The sector stays small. Portugal keeps importing natural gas. Waste that could become energy stays in landfills. The decarbonization targets become harder to hit.