The European Commission has approved Germany’s support package for biomass and biogas amounting to €7.9 billion

Bioenergy Facing Challenges: What Germany’s €7.9 Billion Support Package Means

This decision opens new opportunities for the sector’s growth and strengthens the country’s energy security amid a rapid green transition.

Minister of Economy Katharina Reiche emphasized: “Bioenergy has a future and an important role in our electricity system. We are creating investment security for bioenergy and approximately 2,500 power plants in Germany.”

Flexibility and Grid Security

Biogas can be stored and used during peak demand, providing backup for a system increasingly dependent on solar and wind generation. That is why the government is focusing on operational flexibility: subsidies will now only be available for a defined number of hours. This will encourage producers to shift generation to periods of higher electricity demand.

Starting October 1, 2025, subsidies are planned to be integrated into auction mechanisms. The Federal Network Agency (BNetzA) has increased the annual tender volume to 1.3 GW, of which 813 MW will be available in the upcoming round.

Bioenergy for Heat and Rural Areas

Beyond electricity, bioenergy projects are vital for developing climate-safe heating systems. As Sandra Rostek, head of the Capital Bioenergy Office (HBB), noted: “These plants will support not only supply security but also the development of clean heat in rural areas.”

Challenges for the Sector

Despite its central role in the Energiewende, bioenergy faces a number of challenges:

• high land-use requirements,

• risks of monocultures,

• potential negative impacts on nature and biodiversity.

For this reason, the EU oversees financial support measures to avoid market distortions. The Commission acknowledged the increase in funding as justified, since without it the sector risked losing a significant share of its existing capacity.

Implications for Ukraine

Germany once again demonstrates that bioenergy is an integral element of energy security and resilience. For Ukraine, which is only beginning to form its biomethane and bioenergy markets, this experience may serve as a roadmap: a combination of auction mechanisms, generation flexibility, and state support can create conditions for a strong sector that provides the country with its own green resources.