Biomethane Market - Global Biomethane Industry Analysis, Size, Share, Growth, Trends, and Forecast 2025-2032 – (By Feedstock, By Production Process, By End use, By Geographic Coverage and By Company)

The global biomethane market is poised for remarkable expansion, with its size projected to grow from USD 13.81 billion in 2025 to USD 40.00 billion by 2032, reflecting a compound annual growth rate (CAGR) of 16.4%. This surge is propelled by growing global demand for clean and renewable fuels, particularly in transportation and power generation, alongside supportive policy frameworks and increased utilization of waste-derived feedstocks.

Market Insights

Biomethane, a sustainable alternative to fossil fuels, is rapidly gaining traction due to its potential to support decarbonization goals while addressing waste management challenges. Produced through anaerobic digestion or thermal gasification of organic materials such as agricultural residues, municipal waste, and energy crops, biomethane is being increasingly adopted across industries seeking low-carbon fuel options.

A key advantage of biomethane lies in its versatility and compatibility with existing natural gas infrastructure, making it an ideal substitute in sectors like transportation, electricity generation, and industrial manufacturing. The rising popularity of compressed biomethane in vehicles and its role in achieving net-zero targets are significantly boosting market demand.

Key Market Drivers

One of the most powerful forces behind biomethane market growth is the increasing global focus on sustainable energy. Cleaner fuel alternatives are in high demand across the globe, particularly in transportation and industrial sectors, as countries strive to meet stringent emissions targets.

The launch of large-scale biomethane production facilities is accelerating market momentum. In April 2024, Shell inaugurated Germany’s largest bio-LNG plant, capable of producing 100,000 tons annually. This plant is expected to reduce carbon emissions by up to one million tons per year, contributing directly to the transition toward low-emission freight transport. Similarly, Future Biogas launched a facility in Lincolnshire in partnership with AstraZeneca, providing 100 GWh of renewable energy annually to the pharmaceutical giant’s UK operations. These developments highlight growing corporate commitment to renewable energy sources.

Emerging Opportunities

The biomethane market presents vast opportunities for both private and public stakeholders. Waste-to-energy initiatives offer dual benefits: reducing landfill waste and generating renewable energy. With increased research and development in gasification and digestion technologies, the sector is becoming more efficient and scalable.

Government-backed programs are also helping reduce financial and logistical barriers. In India, for example, the GOBAR Dhan scheme and the Compressed Biogas Blending Obligation are driving demand by encouraging the construction of biogas and bio-CNG plants. These efforts ensure a reliable offtake market for producers, creating long-term investment appeal.

In parallel, rising interest in carbon-neutral logistics and clean public transport is fueling adoption of biomethane in heavy-duty vehicle fleets, paving the way for further innovations and market expansion.

Challenges to Growth

Despite its vast potential, the biomethane industry faces challenges. High initial capital investment, often over USD 5 million per plant, deters many small and mid-sized enterprises. Furthermore, feedstock variability, particularly in developing economies, hampers consistent production. Agricultural residues, animal manure, and municipal waste are often decentralized and seasonal, complicating collection and logistics.

Governments are working to address these hurdles through subsidies, public-private partnerships, and infrastructure investment. India’s National Bioenergy Programme, with a budget of ₹858 crores, is a prime example, aimed at encouraging the development of scalable biogas and biomethane facilities.

Regional Market Analysis

North America

In North America, biomethane is gaining ground through policy support and the widespread use of energy crops in anaerobic digestion. The U.S. Clean Fuel Standard and Renewable Fuel Standard are key policy drivers. Moreover, companies like OPAL Fuels and TotalEnergies are expanding biomethane operations, supported by a growing network of renewable natural gas (RNG) fueling stations. Collaborations like the TotalEnergies–Vanguard Renewables joint venture focus on converting farm and food waste into energy, boosting the market significantly.

Europe

Europe is a frontrunner in integrating agricultural waste into energy systems. The region leverages thermal gasification and anaerobic digestion technologies to convert agricultural residues into power. The European Commission’s Renewable Energy Directive has set ambitious targets, pushing member countries to ramp up biomethane production. Gasum’s recent expansion in the Netherlands and Engie’s project in Italy further demonstrate the region’s commitment to green energy transition.

Asia Pacific

Asia Pacific is witnessing rapid adoption of biomethane, mainly due to urban waste management challenges and increasing energy needs. Municipal waste is the dominant feedstock in countries like China and India. In China, government investments in waste-to-energy projects are boosting biomethane capacity, while in India, firms like RAMKY Group are advancing municipal waste-to-energy infrastructure. Supportive policies in these countries are helping to address urban waste issues while simultaneously enhancing renewable energy production.

Competitive Analysis

The global biomethane industry is competitive and dynamic, with major energy corporations and specialized biogas firms investing in new projects and technologies. Companies such as Shell, TotalEnergies, and Engie are expanding their biomethane portfolios through acquisitions and infrastructure development. These global players are complemented by regional companies like Future Biogas and Archaea Energy, which bring innovation and local expertise to the market.

Key strategies being employed include long-term supply agreements, strategic partnerships, and feedstock diversification. These moves aim to ensure stable production, reduce operational costs, and meet growing demand across multiple industries.

Key Companies
• Shell Petroleum NV
• Gasum
• Air Liquide
• Archaea Energy
• Opal Fuels Inc.
• Kinder Morgan Inc.
• TotalEnergies
• 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

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