Singapore takes lead in Southeast Asia’s biomethane transition

Data centres and a new sandbox program are driving demand for renewable gas imports.

Singapore is emerging as the trigger for biomethane development in Southeast Asia, “given the higher willingness to pay” and the government’s move to support imports through a new Biomethane Sandbox programme.

“Biomethane has the same characteristics as natural gas,” Dieter Billen, partner and head of Energy & Sustainability Practice for Southeast Asia at Roland Berger, said during his keynote speech at the Asian Power Summit 2025 held in Singapore.

“You can use this biomethane in the same applications, the same infrastructure, the same transport infrastructure.” He noted that this makes it possible for Singapore to decarbonise existing gas-based power plants without building new systems.

The biggest opportunity, according to Billen, will be in the power sector. “There’s the opportunity to produce electricity using the existing gas-based power plants in Singapore using biomethane,” he said. “That electricity can then be sold with a premium because it’s basically renewable electricity produced in Singapore, even though the biomethane is imported.”

This opportunity is being accelerated by Singapore’s data centre industry. “For upcoming tenders for new data centre capacity, there will be strong mandates to encourage applicants to move towards green energy pathways,” Billen said. “Amongst those green energy pathways, biomethane is the most viable one.”

He shared that data centres are already negotiating with generation companies in Singapore to secure renewable electricity sourced from biomethane.

“At this point, what’s happening is that we have the data centres that want to participate in new capacity tenders negotiating with some of the Gencos,” he said. “Those Gencos are also negotiating import agreements with various types of players because of that opportunity to produce power from biomethane and sell it to companies like data centres.”

The Biomethane Sandbox supports these efforts by allowing imports that replace natural gas, helping companies offset carbon taxes.

“The Singapore government has actually also announced a program called the Biomethane Sandbox to encourage the Gencos to import biomethane into the country,” Billen said. “The idea is that biomethane replacing natural gas can be used to offset the carbon footprint.”

Billen acknowledged the cost challenge, saying biomethane “can be typically double the price of natural gas,” but he emphasised that it remains more cost-competitive than other alternatives. “When you compare it to importing green hydrogen or ammonia into Singapore, biomethane is still significantly more cost-competitive,” he said.

He concluded that Singapore’s leadership will have a broader regional impact. “Biomethane was never a major type of fuel or decarbonization in the region,” he said. “That is now going to change with Singapore being the trigger, especially driven by the data centre requirements and the power sector related to that.”