Biomethane Market

Global Biomethane Market Forecast

• The global Biomethane Market size is projected to rise from US$ 13.81 Bn in 2025 to US$ 40.00 Bn by 2032 with a CAGR of 16.4%.
• The global biomethane market is driven by rising demand for cleaner fuels in transportation and power generation, a shift towards feedstock from waste, and supporting policies from the government across the world. 

Biomethane Market Insights

• Rising demand for cleaner fuels in transportation and power generation is driving biomethane adoption, especially due to supportive policies and emission regulations.
• Utilizing municipal waste and wastewater sludge for biomethane production presents dual benefits: waste reduction and renewable energy generation.
• The growing shift towards using waste-derived feedstocks, with increased R&D in advanced gasification and anaerobic digestion technologies.
• Energy Crops dominate due to their high biogas yield and consistent supply, especially in North America.
• Anaerobic Digestion leads the market, favored for its efficiency, maturity, and cost-effectiveness, especially with energy crops.
• Transportation is the major application, benefiting from stringent fuel standards and the rise of compressed biomethane use in vehicles.
• North American market is dominated by energy crops used in anaerobic digestion for transportation fuel. Strong policy backing supports growth.
• The European market focuses on agricultural residues and thermal gasification for power generation. The EU's renewable energy targets bolster the market.
• The Asia Pacific market mostly depends on Municipal waste as a key feedstock for industrial biomethane use, driven by urbanization, waste challenges, and energy needs in countries like China and India.

A Look Back and a Look Forward - Comparative Analysis

Between 2019 and 2024, the biomethane market experienced steady growth, driven by increasing government support for renewable energy and waste management initiatives. Programs like the European Union’s Renewable Energy Directive II and California’s Low Carbon Fuel Standard accelerated biomethane adoption for transportation and power generation. India’s launch of the SATAT scheme and the GOBAR Dhan initiative further promoted compressed biogas production from municipal and agricultural waste, expanding the market in developing economies.

Looking ahead, from 2025 to 2032, the market is poised for accelerated expansion as governments tighten carbon reduction targets and invest heavily in circular economy models. The European Commission’s Fit for 55 package and the U.S. Inflation Reduction Act will continue to drive funding and infrastructure development for biomethane projects. Furthermore, emerging markets in Asia and Latin America are expected to scale up biomethane production, supported by urban waste management reforms and rising energy security concerns.

Key Growth Determinants

Scaling Biomethane Production to Meet Global Decarbonization Goals

The biomethane market is gaining momentum as global decarbonization efforts intensify, with key industry players spearheading impactful initiatives. In April 2024, Shell launched Germany’s largest bio-LNG plant at its Energy and Chemicals Park Rheinland, capable of producing up to 100,000 tons annually, enough to fuel 4,000–5,000 LNG trucks. By using grid-injected biomethane, the plant aims to cut up to one million tons of CO₂ emissions per year, directly contributing to cleaner transportation solutions.

Furthermore, Future Biogas, in collaboration with AstraZeneca, inaugurated a biomethane facility in Lincolnshire, UK in February 2025, supplying 100 GWh of renewable energy annually to support AstraZeneca’s UK operations. This initiative aligns with AstraZeneca’s net-zero targets and demonstrates growing corporate reliance on renewable gas sources.

These developments underscore how industrial partnerships and large-scale infrastructure investments are pivotal in scaling biomethane production and supporting national and corporate decarbonization goals.

Key Growth Barriers

High Production Costs and Feedstock Variability Challenge Biomethane Growth

​The biomethane market faces significant challenges due to high production costs and feedstock variability, particularly in developing regions. Establishing and maintaining biomethane plants require substantial capital investment, often exceeding $5 million per facility.

Furthermore, the decentralized nature of feedstock sources, such as agricultural residues and municipal waste, complicates consistent supply and increases procurement costs. To address these issues, India has implemented several initiatives. The National Bioenergy Programme, with an initial allocation of ₹858 crores, supports the development of large-scale biogas and bio-CNG plants.

Moreover, the GOBAR Dhan scheme aims to promote a circular economy by establishing 200 compressed biogas plants, including 75 bio-methanation plants in urban areas. The introduction of the Compressed Biogas Blending Obligation mandates the blending of CBG into CNG and PNG, stimulating demand and providing a guaranteed offtake for producers.

These measures collectively aim to reduce production costs, stabilize feedstock supply, and enhance the financial viability of the biomethane sector.

Biomethane Market Trends and Opportunities

Circular Economy Drives Innovation in Waste-Derived Biomethane Production

The shift toward a circular economy is gaining momentum as companies focus on waste-derived feedstocks and invest in advanced technologies like gasification and anaerobic digestion. In April 2024, Shell launched Germany’s largest bio-LNG plant at its Energy and Chemicals Park Rheinland, producing up to 100,000 tons annually, using biomethane from the gas grid. This initiative aims to reduce CO₂ emissions by up to one million tons per year.

Similarly, in March 2025, Gasum partnered with Fazer to convert inedible bakery waste into biogas, powering a portion of Fazer’s transportation fleet and contributing to its carbon reduction goals. Furthermore, in 2024, Air Liquide expanded its biomethane production with two new units in the U.S., utilizing dairy farm waste. These developments are complemented by government initiatives such as the sustainability charter introduced by Air Liquide, emphasizing enhanced environmental practices, promoting the integration of renewable feedstocks into energy systems.

Waste Management Integration Unlocks New Growth Opportunities for Biomethane

The integration of waste management into biomethane production offers dual benefits of waste reduction and renewable energy generation. In April 2024, Air Liquide advanced this concept with two new biomethane production units in Pennsylvania and Michigan, which convert dairy farm waste into 74 GWh of renewable energy annually.

Furthermore, in February 2025, Future Biogas partnered with AstraZeneca to open a biomethane plant in Lincolnshire, UK, powered by organic waste, to supply 100 GWh of renewable energy to AstraZeneca’s operations. Moreover, TotalEnergies and Vanguard Renewables signed a joint venture agreement in April 2024 to develop RNG projects in the U.S., utilizing agricultural waste, demonstrating how integrating waste streams into energy production aligns with sustainability goals. This trend is also supported by European and global regulatory frameworks incentivizing waste-to-energy transitions.

Leading Segment Overview

Energy Crops Lead the Biomethane Production with High Yield and Reliability

Energy crops are a leading feedstock in biomethane production due to their high biogas yield and consistent supply. In 2024, the U.S. Department of Energy (DOE) allocated $52 million to six projects focused on advancing low-carbon, purpose-grown energy crops, such as switchgrass, miscanthus, and non-food sorghum. These initiatives aim to enhance feedstock sustainability and diversity.

Furthermore, the American Biogas Council reported a 40% increase in biogas investments, amounting to $3 billion in 2024, with a significant focus on agricultural feedstocks. Companies like Verbio are integrating energy crops into their operations, processing large quantities of corn stover to produce renewable natural gas and bioethanol, further reinforcing the strategic role of energy crops in renewable energy generation.

Mature and Cost-Effective Anaerobic Digestion Fuels Market Growth

​Anaerobic digestion leads the biomethane production market due to its efficiency, maturity, and cost-effectiveness, particularly when paired with energy crops. In 2024, several major industry players, including Shell and Gasum, expanded their anaerobic digestion facilities to enhance biogas production. Shell’s bio-LNG plant in Germany utilizes anaerobic digestion to process organic waste, including energy crops, producing 100,000 tons of biomethane annually.

Correspondingly, Gasum acquired new biomethane production sites in the Netherlands in 2024, using anaerobic digestion to convert agricultural residues and energy crops into renewable natural gas. The method's popularity is further supported by government initiatives, such as the U.S. Department of Energy’s funding for projects that focus on optimizing anaerobic digestion processes. The approach remains the preferred technology due to its well-established track record in cost-effectively converting organic feedstocks into biogas and its ability to support large-scale renewable energy generation.

Bio-LNG and RNG Expansion Strengthen Biomethane’s Role in Clean Mobility

Transportation is the leading application for biomethane, benefiting from stricter fuel standards and the increasing use of compressed biomethane in vehicles. In April 2024, Shell launched Germany's largest bio-LNG plant, producing 100,000 tons of bio-LNG annually to fuel 4,000–5,000 LNG trucks. This development supports the growing trend of decarbonizing the transportation sector.

Furthermore, in the U.S., regulatory initiatives like the Renewable Fuel Standard have boosted demand for renewable natural gas in transportation, with companies such as OPAL Fuels expanding RNG production. As vehicle manufacturers and fuel providers increasingly adopt compressed biomethane, governments and industries are aligning to create favorable conditions for its growth. These factors position transportation as a key driver in the expansion of the biomethane market.

Regional Analysis

• Policy Support and Energy Crops Drive North America’s Biomethane Expansion

North America’s biomethane market is primarily driven by the use of energy crops in anaerobic digestion for transportation fuel. The region’s adoption of renewable natural gas is bolstered by robust policy support, such as California’s Low Carbon Fuel Standard, which incentivizes the use of low-carbon fuels in the transportation sector.

The U.S. Department of Energy’s initiative of investment in energy crop projects to support the developments of low-carbon feedstocks for anaerobic digestion fuels the market growth. On the market player’s front, companies like OPAL and TotalEnergies are expanding their biomethane business in the region. The growing infrastructure for renewable natural gas fueling stations further aids the transition to cleaner transportation. Partnerships like TotalEnergies and Vanguard Renewables’ joint venture to develop farm-powered renewable natural gas projects also highlight the ongoing push toward using agricultural waste and energy crops to produce renewable fuels, fostering growth in the North American biomethane market.

• Agricultural Waste and Gasification Technologies Fuel Europe’s Biomethane Growth

Europe’s biomethane market is heavily focused on using agricultural residues and thermal gasification for power generation. The region benefits from the EU's ambitious renewable energy targets, which are driving the shift toward cleaner energy sources. In 2024, Gasum expanded its biomethane production in the Netherlands, incorporating agricultural residues into its facilities, aligning with EU regulations to meet renewable energy goals.

Furthermore, the European Commission’s renewable energy directive mandates the increased use of biogas in electricity generation, further boosting market growth. Companies like Engie have also made significant strides, participating in the inauguration of Italy’s first biogas-to-biomethane plant for industrial use in November 2024, which will help meet both local and EU-wide energy targets. The EU’s strong policy backing, combined with advancements in thermal gasification technologies, positions Europe as a leader in integrating agricultural waste into renewable power generation, significantly driving the growth of the biomethane market.

• Asia Pacific's Biomethane Market Strengthened by Waste Management and Energy Policies

In the Asia Pacific region, municipal waste is a key feedstock for industrial biomethane production, driven by rapid urbanization, waste management challenges, and growing energy demands, particularly in countries like China and India. In 2024, China’s government invested in waste-to-energy projects, including biomethane production from municipal solid waste, to address waste disposal issues and enhance renewable energy output.

In India, companies like RAMKY Group are expanding biogas plants that convert municipal waste into renewable energy, contributing to local energy needs. These developments are supported by regional policies targeting waste reduction and renewable energy growth, positioning municipal waste as a crucial feedstock for industrial biomethane production across the Asia Pacific. ​

Competitive Landscape

The biomethane market is characterized by significant involvement from both global energy giants and specialized renewable energy companies. Major players are expanding their biomethane operations, focusing on large-scale production plants and strategic acquisitions. Regional players are also prominent, by expanding their production capacity by utilizing agricultural residues and landfill gas.

Government policies, such as the EU’s renewable energy directives and North America's Low Carbon Fuel Standard, provide a competitive advantage to companies adopting clean energy technologies. As demand for renewable fuels rises, partnerships and acquisitions continue to shape the competitive landscape, with a focus on scalability, feedstock diversification, and aligning with sustainability goals.

• In April 2024, Air Liquide announced the construction of two new biomethane production units in Pennsylvania and Michigan, utilizing dairy farm waste to produce 74 GWh annually.
• ​​In February 2023, Shell completed its acquisition of Nature Energy, Europe's largest renewable natural gas producer, for nearly $2 billion. This move enhances Shell's low-carbon fuel portfolio and supports its net-zero emissions goal.

Key Companies

• Shell Petroleum NV
• Gasum
• Air Liquide
• Archaea Energy
• Opal Fuels Inc.
• Kinder Morgan Inc.
• Total Energy
• Engie SA
• EnviTech Biogas AG
• Future Biogas Ltd.
• E.ON SE
• Verbio Vereinigte Bioenergie AG

Global Biomethane Market Segmentation-

By Feedstock

• Energy Crops
• Agricultural Residues & Animal Manure
• Municipal Waste
• Wastewater Sludge 

By Production Process

• Anaerobic Digestion
• Thermal Gasification 

By End use

• Transportation
• Power Generation
• Industrial

By Region

• North America
• Europe
• Asia Pacific
• Latin America
• The Middle East & Africa