Biomethane Market By Feedstock (Agricultural Waste, Animal Manure, Organic Household Waste, Industrial Food Processing Waste, Energy Crops, Sewage Sludge, Landfill Gas, and Forestry Residues), By Production Method (Anaerobic Digestion, Thermal Gasification, and Power-to-Gas), By Upgrading Technology Provider (Technology Integrators, Turnkey System Providers, and Modular System Providers), By Technology (Membrane Separation, Water Scrubbing, Pressure Swing Adsorption (PSA), Chemical Absorption, and Cryogenic Separation), By Application (Electricity Generation, Heat Generation, Transportation Fuel, Grid Injection, Industrial Feedstock, and Others), By Distribution Channel (Onsite, and Offsite), and By End-User (Power & Utilities, Residential, Commercial, Transportation, Industrial, and Agriculture), Global Market Size, Segmental Analysis, Regional Overview, Company Share Analysis, Leading Company Profiles, and Market Forecast, 2025 – 2035.

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What trends will shape the Biomethane Market in the coming years?

The Biomethane Market accounted for USD 8.03 Billion in 2024 and USD 9.14 Billion in 2025 is expected to reach USD 33.29 Billion by 2035, growing at a CAGR of around 13.8% between 2025 and 2035. Increasing demand for renewable and low-carbon alternatives of energy, particularly in transportation and generation sectors, is projected to define the biomethane market. In Europe and North America, the pace of biomethane development and capacity of the network are accelerated by governmental incentives and carbon neutrality goals.

The biogas upgrading and grid injection systems are improving efficiency in production due to technological advances. Further growth in investments in waste-to-energy projects and circular economy models will continue boosting the market. The introduction of biomethane to the existing gas grids and the emergence of bio-CNG in the commercial fleet are also bound to bring game changers.

What do industry experts say about the Biomethane market trends?

“Volumes bought through long-term contracts will fall, and we plan to incorporate biomethane into our energy mix.”

• Francisco Reynes, CEO, Naturgy Energy Group.

Which segments and geographies does the report analyze?

What are the key drivers and challenges shaping the Biomethane market?

How are decarbonization mandates accelerating renewable gas production and transportation fuel adoption?

The global Biomethane Market is a fast-growing market due to the presence of decarbonization requirements that trigger the production of renewable gases and the use of transportation fuel. These requirements make industries and governments substitute fossil fuels with cleaner options like biomethane to achieve the emission reduction goals. Biomethane is bridging the gap between national and regional policy, as much of the policy is looking at biomethane within clean energy roadmaps, which is leading to more organic waste being converted into renewable gas. To give an example, the European Union has biomethane in its Renewable Energy Directive, where it is accorded importance as a source of renewable energy.

These regulatory measures enhance the growth of bio-CNG adoption in transport systems at both the commercial and public levels. Project implementation is also increased by streamlined permitting processes and fiscal incentives. Investments in infrastructure, such as unit upgrades and fuel stations, are a priority. The private investments are also following these mandates because they enhance the viability of the projects. Consequently, biomethane is emerging as a hotspot in meeting clean energy and low-carbon mobility in the world.

What role do government subsidies play in scaling biomethane infrastructure and project financing?

The importance of government subsidies in scaling the infrastructure and financing in the global Biomethane Market is that it lowers the costs of production and guarantees revenue stability. In Estonia, biomethane producers are subsidized by transport fuel and grid injection (69/MWh, as of January 2017, subsidized by), which is offset against the natural gas market price. These operational incentives promote investments in the technological upgrading and logistics of feedstocks.

Subsidies reduce the financial risk involved in the projects, thus making them more attractive to banks and private investors. They assist in the attainment of economies of scale by the small and mid-sized producers. Bio-CNG and grid injection systems can also be implemented sooner because of guaranteed returns. Projects and the associated construction schedules benefit through acceleration as a result of subsidies. Also, they promote national energy independence and rural development. Overall, these types of financial mechanisms are the ones to ensure the expansion of renewable gas systems and clean transportation strategies.

Why does high initial investment deter small players from entering the biomethane production market?

The global Biomethane Market may come with high capital requirements, thus not being affordable for small players to make an entry, as the cost of putting up a full-scale facility can discourage a small player. Erecting anaerobic digesters, retrofitting machines, interfacing to manage the feedstock, and injecting into the grid require huge initial capital investments. These are costs that are usually hard to afford for small companies with no access to large-scale bargaining or decent loaning options. Further costs associated with permitting, regulatory compliance, and environmental studies also dent tight budgets.

Biomethane projects have a long payback period, which further creates uncertainty among smaller investors. Financial risks are not reduced in the absence of a confirmed subsidy or off-take arrangements. The cost of operations also goes up due to the intricacy of technology and strong labor costs. Bigger companies have economies of scale and incorporated supply chains, which increases the gap. Consequently, there is a low rate of entry due to major barriers to entry, which reduces the involvement of other smaller players despite the increase in demand in the market.

How can emerging bio-CNG demand in transportation boost biomethane consumption globally?

An increasing demand for bio-CNG (compressed natural gas) in the transportation sector is already a big step towards increased consumption of biomethane in the Global Biomethane Market since it is establishing a certain source of high-volume end use. Due to the high levels of emission regulations by countries, fleet operators are shifting towards bio-CNG as a clean alternative to diesel and petroleum. Upgraded biomethane in the form of Bio-CNG has significant greenhouse gas benefits, an aspect that makes it appealing to public transit, logistics, and municipal fleets. Incentives and programs on the part of the government are fast-tracking the installation of refueling stations and the conversion of vehicles.

Rapidly urbanizing cities, which are also more polluted cities, are looking at bio-CNG adaptation, especially. This transition generates constant demand, which promotes further investment in the construction of biomethane production plants. Bio-CNG also helps in energy security as it decreases the dependency on imported fossil fuels. The move of the transportation industry towards cleaner fuels is directly making the biomethane value chain even longer. The rise in bio-CNG strengthens the place of biomethane in the international clean energy plans.

What impact could international carbon trading markets have on biomethane revenue generation?

Biogas integration into Downtown Biomethane Carbon trading could bring an immense revenue increase to the global Biomethane Market, with monetization of the low-carbon qualities. Augmenting the fossil fuel it displaces, carbon credits give biomethane producers an extra income source, which can be traded. These are credits that can be sold at regulated and voluntary carbon markets to increase the financial viability of projects. The investment in these schemes is interesting to climate-minded investors and de-risks the long-term returns.

Countries having cap-and-trade systems also encourage the use of biomethane by inducing market-related credit prices. The process of trading credit across borders makes it possible to enables producers in emerging economies to reach buyers in high-demand areas. It also propagates standardization on emissions supervision and certification procedures. As the carbon markets are enlarged, it contributes to the biomethane producers covering their operating expenses. This increment in the incomes enhances both profits and expedites the development of the infrastructure. Finally, the efforts in decarbonization of the world are reinforced by the carbon trading mechanism, which puts biomethane at the center of such endeavors.

What are the key market segments in the Biomethane industry?

Based on the feedstock, the Biomethane Market is classified into agricultural waste, animal manure, organic household waste, industrial food processing waste, energy crops, sewage sludge, landfill gas, and forestry residues. Grass feedstock is well distributed and available in large quantities. The practice of the use of sewage sludge is more common in the city waste treatment facilities, particularly in Europe.

Organic household waste is becoming an active component of the municipal biomethane schemes as the cities seek to minimize the use of landfills. Industrial food processing wastes provide a steady, high-energy source for biomethane plants, which have been the subject of investment in industrial biomethane plants. Maize and sorghum, both sources of energy, are efficient crops, but their land use determines that they go through internet scrutiny. In the meantime, landfill gas and forestry residues also play a niche market, particularly in North America and Nordic nations.

Based on the application, the Biomethane Market is classified into electricity generation, heat generation, transportation fuel, grid injection, industrial feedstock, and others. Biomethane is promoted as a transportation fuel in the first place, as bio-CNG and bio-LNG as transportation fuel acquire an increasing role in the decarbonization of the public transport industry and the commercial fleet. A second major area is grid injection, where nations are injecting biomethane into their existing natural gas grids to achieve renewable energy goals.

Power installation projects are still important, particularly in the countryside and off-grid, where distributed power plays a vital role. In the industrial sector, biomethane is used as a clean source of energy to minimize the use of energy in industries. There is an increase in residential applications in areas where green gas is encouraged by subsidizing. Carbon credits and government imperatives are improving the implementation of every area of application. Together, these applications help the use of biomethane to contribute to the goal of a circular economy and climate neutrality.       

Which regions are leading the Biomethane market, and why?

The North American Biomethane Market is leading due to the high policy support, carbon-cutting targets, and increasing renewable natural gas (RNG) demand. The United States, especially states such as California, has enacted Low Carbon Fuel Standards (LCFS) and has renewable gas incentives, which have helped speed up the adoption of bio-CNG in the transport industry. Larger utilities and gas distributors are showing huge investments in RNG infrastructure and grid injection.

Canada is also increasing biomethane production, with provinces such as British Columbia providing mandates and subsidies to encourage clean gas. Availability of feedstock is also helped by the presence of a large volume of organic waste generated through agriculture and industry. In general, the regulatory environment and development of decarbonization implemented in North America make it the global leader in the sphere of biomethane development.

The Asia Pacific Biomethane Market is leading due to the surging energy demand, garbage production, and government policies encouraging the promotion of biomethane. India and countries in Asia, such as China, are leading in this expansion as bio-CNG programs and proposals like waste-to-energy on large-scale projects are being advocated.

Due to urbanization and industrial growth, huge quantities of organic waste are being produced, which can offer plenty of feedstocks to be used to produce biomethane. South Korea and Japan are also investing in biomethane that can be used in transport and the generation of power. The project implementation is faster because of technological partnering and public-private decreeing. The region has garnered sufficient policy momentum and interest in decarbonization and therefore forms a strong growth engine.

What does the competitive landscape of the Biomethane market look like?

The Biomethane Market is quite competitive, as large energy giants and bioenergy companies that dominate the industry are increasing their place in the manufacturing, upgrading, and distribution value chain. Air Liquide, Engie, Shell, TotalEnergies, EnviTec Biogas AG, Verbio, Future Biogas, Gasum, Nature Energy, Waga Energy, and OPAL Fuels are the main actors. To capture the market, these firms are undertaking investments in extensive anaerobic digestion facilities, highly advanced upgrading methods, and long-term offtake pacts. Shell recently boosted its biomethane presence by purchasing Nature Energy for $2 billion, whereas Air Liquide opened new RNG production facilities in Pennsylvania and Michigan.

Technological innovation, like pressure swing adsorption and membrane separation systems, leads to competitive differentiation. The companies are also spreading their base to feed stocks and are getting into transport, grid injection, and industrial fuel. The regionalization tactics are speeding up, especially in Asia and North America. The level of strategic partnership and M&A keeps increasing. The latest asking happened in June 2025 with the deal of EQT with France-based Waga Energy at more than 600 million euros, which once again shows the purchasing power of investors in the landfill-to-biomethane option.

Biomethane Market, Company Shares Analysis, 2024

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Which recent mergers, acquisitions, or product launches are shaping the Biomethane industry?

• In June 2025, Private equity firm EQT agreed to acquire France’s landfill-to-biomethane specialist Waga Energy for over €600 million, signaling strong investor confidence in waste-to-grid gas projects.
• In February 2025, German firm Weltec Biopower commissioned a dairy RNG/biomethane plant in Barron County, Wisconsin, using advanced membrane upgrading tech to produce 2.36 million m³ (~86,600 MMBtu) annually, which is injected into the gas grid.
• In February 2025, AstraZeneca, in partnership with Future Biogas, opened a biomethane plant in Lincolnshire, UK, generating 100 GWh of renewable energy annually—enough to power 20% of its global gas needs under a 15-year agreement.

Report Coverage:

By Feedstock

• Agricultural Waste
• Animal Manure
• Organic Household Waste
• Industrial Food Processing Waste
• Energy Crops
• Sewage Sludge
• Landfill Gas
• Forestry Residues

By Production Method

• Anaerobic Digestion
• Thermal Gasification
• Power-to-Gas

By Upgrading Technology Provider

• Technology Integrators
• Turnkey System Providers
• Modular System Providers

By Technology

• Membrane Separation
• Water Scrubbing
• Pressure Swing Adsorption (PSA)
• Chemical Absorption
• Cryogenic Separation

By Application

• Electricity Generation
• Heat Generation
• Transportation Fuel
• Grid Injection
• Industrial Feedstock
• Others

By Distribution Channel

• Onsite
• Offsite

By End-User

• Power & Utilities
• Residential
• Commercial
• Transportation
• Industrial
• Agriculture

By Region

North America

• U.S.
• Canada

Europe

• U.K.
• France
• Germany
• Italy
• Spain
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• Australia
• South Korea
• Singapore
• Rest of Asia Pacific

Latin America

• Brazil
• Argentina
• Mexico
• Rest of Latin America

Middle East & Africa

• GCC Countries
• South Africa
• Rest of the Middle East & Africa

List of Companies:

• Air Liquide S.A.
• Engie S.A.
• Royal Dutch Shell plc
• TotalEnergies SE
• EnviTec Biogas AG
• Verbio Vereinigte BioEnergie AG
• Future Biogas Limited
• Gasum Oy
• Nature Energy Biogas A/S
• Waga Energy S.A.
• OPAL Fuels Inc.
• Aemetis, Inc.
• Weltec Biopower GmbH
• Clean Energy Fuels Corp.
• PlanET Biogas Group GmbH

Frequently Asked Questions (FAQs)