Biogas is produced by the biologic breakdown of organic matter in special airtight fermentation plants. The most important substrate for biogas plants are renewable raw materials, animal excrement and so-called coferments (such as organic waste from food production). Depending on ingredients, biogas consists mostly of methane (50 to 70 percent) and carbon dioxide (50 to 30 percent). It also includes other components, e.g. very small amounts of nitrogen and hydrogen sulfide.

Bio natural gas is a processed version of biogas and has the same properties as natural gas with composition requirements according to relevant DVGW (German Association for Gas and Water) worksheets. It can be fed into natural gas pipeline systems, transported in an environmentally friendly manner and stored when necessary. When used with natural gas installations it reacts just the same as natural gas and doesn't need any additional treatment. Bio natural gas offers extremely efficient possibilities for using renewable energies.

Biodiesel is a liquid fuel usually produced by transesterification of rapeseed oil. Rape methyl ester (RME) resulting from this process can be used as an alternative or additive to diesel.

Bioethanol (ethyl alcohol) is ethanol produced exclusively from biomass. Starch from biomass is converted to glucose by enzymes and then fermented. It can be used for stationary electricity generation or as a fuel.

Bioethanol can be used in pure form (E100) in specially developed engines or as a fuel mixture including a percentage of fossil gasoline (e.g. E85, E50) in so-called "Flexible Fuel Vehicles" (FFV).

Bio natural gas is one of the most efficient renewable energy sources. It is especially suited for generating electricity and heat in cogeneration power plants. In contrast to wind or solar energy, it can be produced continually throughout the year, without seasonal fluctuations and completely independent of wind or weather. Its efficiency in terms of the agricultural land required is also much higher than that of other biofuels, such as biodiesel or bioethanol. The biomass yield per hectare of crop produces about three times as much energy in bio natural gas as in biodiesel or bioethanol. In addition, bio natural gas releases only as much CO₂ during combustion as biomass originally absorbed from the atmosphere for its production.

Bio-methane can make significant contribution to make us independent from gas imports but nevertheless it is limited. A BGW/DVGW* survey assumes that about 10 percent of Germany's natural gas consumption at today's level can be covered by renewable biogas.

* "Analyse und Bewertung der Nutzungsmöglichkeiten von Biomasse"(Analysis and evaluation of biomass usage), 2006

Grain, corn, sorghum, Sudan grass, beets, grasses, sunflowers etc. can be used to produce biogas. In addition, we use other plants in biogas production, such as so-called catch crops which are sown and harvested between staple crop harvests.

In 2008, E.ON started producing bio natural gas. Of course, compared to other renewable energies like wind or hydropower, bio natural gas is in the early stages. The percentage of bio natural gas in the natural gas supply will be increased in future. For E.ON, developing renewable energies of all kinds is part of our strategy. Even now, more than 11 percent of E.ON's energy comes from renewable energy sources and we aim for 18 percent in 2015. We believe that especially technology leaders like E.ON should tackle these issues to speed up positive developments. Bio natural gas serves as a good example: Biogas production efficiency has improved greatly during the last years. Research funds and investments - as in the case of the "Schwandorf" plant - speed up progress and, as a result, increase efficiency. Efficient usage of bioenergy will be an essential instrument of climate protection.

The agricultural industry in German is very resourceful and adaptable. In past decades, complex and costly subsidy systems were implemented to reduce its surplus production. Approximately 15 percent of usable land as set aside.  Powerful reserves are available for bio-energy. Recent price volatility cannot be attributed to bio-energy as the price decline and normalization in this summer has demonstrated. The global agricultural industry has quickly responded to demand increases and produced record harvest 10 percent above last year's level.

Of course pricing and price development for grain and other plants are affected by influencing factors such as weather, policy, laws, subsidies, requirements etc. The global population is expected to reach 9 billion by 2050, which will strongly affect demand for foodstuffs. Demands for food and energy crops can only be met permanently by increasing agricultural efficiency of farm land.

The well-known and often repeated example of Mexican tortillas is, strictly speaking, not a suitable example for increased prices for food crops due to competition with energy crops. Instead, it illustrates another complex set of problems, that of misguided agricultural practices leading to shortages. For years U.S. agriculture sold its surpluses to Mexico at dumping prices until local agriculture was no longer able to compete. Withholding these goods led to short-term scarcity, which at first felt like a price explosion to people in Mexico, when actually it helped normalize the situation and should lead to economically stable local agriculture.

Growing energy crop plants for bio natural gas production can be inserted naturally into established farming crop rotation systems, which effectively prevent monocultures and soil exhaustion. Energy crop plants are part of a crop rotation cycle where only 10 to 20 percent of an area's acreage is used for energy crop plants at any time.

We believe that there is little danger of monocultures developing in Germany and Western Europe. There are about 11.8 million hectares of arable land in Germany, as well as more than 5.0 million hectares of grassland. Current estimates predict that about 3.0 million hectares of the acreage available will be used for purposes other than growing food or feedstuffs by 2030. However, Germany's acreage is of very high quality and will certainly continue to be used mostly for producing food and feedstuffs.

Different studies come to very different conclusions. According to the biomass study* conducted by BGW/DVGW (Federal Association for Gas and Water / German Association for Gas and Water) in 2006, there are currently about 1.6 million hectares of acreage that can be used alternatively (of about 11.8 million hectares). This constitutes about 13 percent of total acreage now, and it may increase to 25 percent by 2030. It cannot be said as yet, how much of this will be used for biogas production. Biogas is competing for acreage with firewood, biodiesel, bioethanol and many other raw materials. There can be no doubt, however, that the agricultural efficiency of bio natural gas is by far higher than that of other renewable energy sources such as biodiesel or bioethanol. A mid-range car that would drive almost 70,000 km per hectare and year with bio natural gas could only drive about a third of that distance with biodiesel.

* "Analyse und Bewertung der Nutzungsmöglichkeiten von Biomasse"(Analysis and evaluation of biomass usage), 2006