France’s 90% biomethane GO offset cuts supplier revenue, with transport facing the largest adjustment

The largest adjustment concerns vehicle fuel. For affected transactions, the offset rises from 0% to 90%, compared with 75% to 90% for other uses. However, the measure’s reach depends on two separate contracts: the original biomethane purchase-support contract and the subsequent arrangement used to commercialise its guarantees of origin.

The scope depends on two dates. First, the underlying compensation rule concerns biomethane purchased under supported contracts concluded before 9 November 2020. Under that legacy framework, the purchasing supplier can obtain and monetise the associated guarantees of origin, or GOs. For supported purchase contracts concluded from that date, GOs are instead issued for the State, which can sell available volumes through quarterly auctions operated by the European Energy Exchange (EEX).^{[2] [3]}

Second, within the legacy framework, the October order determines the offset according to the GO sale or monetisation arrangement.

The final order therefore preserves earlier rates for qualifying pre-existing arrangements, subject to its amendment and monetisation provisions. An old production-support contract does not, by itself, protect a new GO transaction from the 90% rate.^[1]

The offset reduces what the State reimburses the purchasing supplier. The mechanism has four steps:

In simplified terms:

The supplier can still receive the full commercial payment for a GO. The offset operates through a lower public compensation entitlement. It is therefore not a 90% tax on the producer’s total biomethane sales.

Consider an illustrative MWh with a €100 supported payment to the producer, a €40 reference value for the gas, and €10 of realised GO revenue, also accepted as the valuation used for compensation. Ignoring eligible management costs, the purchasing-cost gap before the GO adjustment is €60.

Illustrative calculation, not market prices. The remaining GO revenue is before commercial costs and is not a measure of total supplier profit.

Under the new treatment, the supplier receives €40 of gas value, €10 of GO revenue and €51 of public compensation. After paying the producer €100, €1 remains from the GO-related benefit. The State has used €9 of certificate value to reduce the cost of supporting that production.

The assessed GO value can exceed realised revenue

The €9 deduction in the example assumes that the €10 of GO revenue also equals the value recognised when calculating public compensation. The ministerial order sets the 90% deduction rate, while CRE, France’s energy regulator, assesses the compensation payable to suppliers and establishes how the GO value used in that calculation is determined. For the relevant arrangements, CRE’s methodology compares the supplier’s declared average GO value with an applicable minimum derived from EEX biomethane GO auction prices and uses the higher value. The deduction can therefore be calculated on a value exceeding the supplier’s actual receipts, leaving it with less than the 10% illustrated above.

For example, if realised revenue is €8 but the applicable assessed value is €10, a 90% offset means a €9 compensation reduction. Saying that suppliers “keep 10%” is accurate only when realised revenue equals the assessed base. A nominally low GO sale price does not necessarily produce a correspondingly low deduction.

Transport faces the largest loss because it previously retained the entire qualifying GO value. In the example, the available GO-related revenue falls from €10 to €1 for vehicle fuel, and from €2.50 to €1 for other uses.

The earlier transport exemption gave the purchasing supplier more value to retain as margin, share commercially or use to support a competitive bioGNV offer. Removing that advantage changes the economics of affected fuel-supply arrangements even though the underlying production tariff remains payable.

The immediate exposure nevertheless sits with the supplier receiving the public compensation. A filling-station operator or transport company is affected through its supply contract and any subsequent repricing. A station already buying certificates at market prices does not automatically experience the same loss as a supplier holding legacy supported-purchase contracts.

The likely responses are therefore commercial: lower supplier margins, higher prices when contracts permit, reduced sharing of GO value, or changes in sourcing. The legislation does not prescribe a uniform increase at the pump.

CPBs finance production through a different mechanism. France’s certificats de production de biogaz create certificate demand through a statutory obligation on gas suppliers serving covered consumption, principally residential and tertiary uses. Obligated suppliers obtain certificates through qualifying production or purchases and surrender them for compliance. Eligible producers can earn revenue from both the gas and the CPBs.^[6]

CPBs are not simply GOs with more favourable revenue treatment. The same quantity of biogas cannot receive both a CPB and a GO. Moreover, CPB eligibility excludes installations benefiting from the public-support contracts specified in the Energy Code. A producer cannot retain its supported purchase arrangement and simply relabel the associated certificates as CPBs.^[6]

Switching to CPBs requires resolving the existing support position, meeting eligibility requirements and securing commercial gas and certificate revenues. Retaining CPB proceeds must be assessed against the support income forgone and the price and counterparty risks assumed.

Nor does the supplier obligation automatically replace the lost transport benefit. Certificates surrendered for compliance support renewable-content claims across the covered customer base; they are not an automatic rebate to bioGNV suppliers. Separate certificate-use rules govern claims for an identified consumption site.^[7]

For the biomethane sector, the practical implications are concentrated in four areas.