Biomethane and Biogas Market Size, Share, Growth, and Industry Analysis, By Type (Remodeling, New Construction,), By Application Covered (Residential, Commercial,) and Regional Forecast to 2032

Biomethane and Biogas Market Size

The Biomethane and Biogas Market was valued at USD 20,080 million in 2023 and is expected to reach USD 20,843.04 million in 2024, growing to USD 27,992 million by 2032, with a compound annual growth rate (CAGR) of 3.8% during the forecast period from 2024 to 2032.

The Biomethane and Biogas Market in the U.S. is experiencing growth, driven by increasing demand for renewable energy and sustainability initiatives. Government incentives, along with advancements in waste-to-energy technologies, are boosting market development across various industries in the region.

Biomethane and Biogas Market Growth

The biomethane and biogas market has experienced significant growth over the past few years, driven by the increasing demand for renewable energy sources and the growing global emphasis on sustainability. As countries strive to meet environmental targets, the demand for alternative energy solutions like biomethane and biogas has surged. Biomethane, a purified form of biogas, is gaining traction as a viable energy source due to its ability to be used in transportation and as a substitute for natural gas in various industries. According to recent industry data, the global biomethane market is poised for continuous expansion, with forecasts predicting substantial increases in production and consumption over the next decade.

One of the major growth drivers of the biomethane and biogas market is the increasing focus on reducing carbon emissions. Governments around the world are adopting policies and incentives aimed at reducing reliance on fossil fuels. This has led to substantial investments in the biogas industry, particularly in Europe, North America, and parts of Asia. Countries like Germany and the United Kingdom have established favorable regulatory frameworks that encourage the production of biogas and biomethane. 

The market is also benefiting from technological advancements in biogas production and upgrading techniques. Innovations in anaerobic digestion, a key technology used in biogas production, have improved the efficiency and cost-effectiveness of biogas plants. Meanwhile, advancements in biogas upgrading technologies, such as pressure swing adsorption (PSA) and water scrubbing, have enhanced the production of high-quality biomethane that meets the standards for natural gas grid injection and vehicle fuel use. As a result, the use of biomethane in the automotive and transport sectors is expected to rise significantly, further contributing to market expansion.

Economic factors also play a crucial role in the market's growth. With the fluctuating prices of oil and natural gas, countries and industries are seeking stable and locally sourced alternatives to conventional fuels. Biomethane, produced from organic waste such as agricultural residues, food waste, and sewage sludge, offers a reliable and sustainable energy solution. The lower cost of production, when compared to conventional fossil fuels, is making biomethane an attractive option for both public and private sector investments.

The biogas market itself is experiencing growth due to the increasing demand for waste management solutions. With rising urbanization and population growth, the volume of organic waste generated worldwide is escalating. Biogas plants offer an effective solution for converting waste into energy while simultaneously addressing waste disposal issues. Moreover, the ability of biogas plants to produce valuable by-products, such as organic fertilizers, enhances the attractiveness of the technology for waste-to-energy projects.

Biomethane and Biogas Market Trends

The biomethane and biogas market is witnessing several notable trends that are shaping the future of the industry. One key trend is the increasing integration of biomethane into the natural gas grid. With advancements in upgrading technologies, biomethane is becoming a viable substitute for conventional natural gas, allowing it to be injected directly into the gas grid for use in residential, commercial, and industrial applications. This trend is gaining momentum, particularly in Europe, where governments are setting ambitious renewable energy targets and promoting the use of biogas and biomethane as part of their decarbonization efforts.

Another prominent trend is the growth of biogas in the transportation sector. Biomethane is emerging as a sustainable alternative to diesel and petrol, especially for heavy-duty vehicles like buses, trucks, and waste collection fleets. This shift is supported by the increasing availability of compressed biomethane (CBG) and liquefied biomethane (LBM) fuel stations, particularly in Europe and North America. 

Additionally, the rise in decentralized energy production is gaining traction in the biogas sector. Smaller, localized biogas plants are being deployed in rural and agricultural areas, providing communities with an efficient way to manage organic waste and generate renewable energy. This decentralized approach reduces transmission losses and increases energy security, especially in remote areas. 

Market Dynamics

The biomethane and biogas market is influenced by several dynamic factors, including regulatory support, technological advancements, and consumer demand for clean energy solutions. 

Drivers of Market Growth

The key drivers of growth in the biomethane and biogas market are the increasing demand for renewable energy sources, technological advancements, and strong regulatory support. As nations work to meet their climate change targets and reduce reliance on fossil fuels, there is an increasing push towards the adoption of sustainable energy solutions, including biomethane and biogas. These energy sources are seen as crucial to achieving carbon neutrality, especially in sectors like transportation, where they can help reduce greenhouse gas emissions and dependence on imported fossil fuels.

Technological advancements in biogas production, such as improvements in anaerobic digestion and biomethane upgrading technologies, are another critical factor driving market growth. These innovations have not only made the production of biomethane more efficient but also reduced the overall cost of biogas plants. This makes biogas and biomethane more competitive with traditional energy sources and increases their adoption across industries.

In addition to technological and regulatory factors, economic considerations also play a significant role. Biomethane can be produced from a variety of organic feedstocks, including agricultural waste, food waste, and sewage sludge. This gives it the advantage of being a locally sourced energy solution, which can reduce supply chain risks and costs associated with fossil fuels. As fuel prices fluctuate, biomethane offers a stable and cost-effective alternative, making it an attractive option for industries and consumers alike.

Market Restraints

Despite the positive growth trends, several factors pose challenges to the expansion of the biomethane and biogas market. One of the primary restraints is the high initial capital investment required for setting up biogas plants and upgrading facilities. While the long-term benefits of biomethane, such as low operating costs and environmental impact reduction, are well recognized, the upfront costs can be prohibitive for smaller companies or startups. This financial barrier can slow down the adoption of biogas technology, particularly in developing countries where access to funding may be limited.

Feedstock availability is another key restraint. Biomethane production depends heavily on the availability of organic waste materials, and fluctuations in feedstock supply can affect production volumes. For instance, seasonal variations in agricultural waste or supply chain disruptions can lead to inconsistent feedstock availability, which in turn impacts biogas production capacity. Moreover, the reliance on certain waste streams, such as food waste and agricultural residues, may raise concerns about sustainability and environmental impact, particularly in regions where waste management systems are not adequately developed.

In addition, regulatory challenges also pose a restraint to market growth. In some regions, the lack of clear policies and incentives for biomethane production can create uncertainty for investors and hinder market development. Furthermore, complex permitting processes, infrastructure limitations, and inconsistent quality standards for biomethane can slow down the adoption of biogas solutions in various sectors.

Market Opportunities

The biomethane and biogas market presents numerous opportunities, particularly in areas related to waste-to-energy solutions, rural electrification, and the growing demand for sustainable transportation fuels. As the world becomes more focused on reducing carbon emissions, the demand for renewable energy sources like biomethane is expected to continue growing. Governments’ commitment to promoting green energy, coupled with advancements in biogas and biomethane technologies, creates ample opportunities for investment in the sector.

One significant opportunity lies in the transportation sector, where the adoption of biomethane as an alternative fuel for heavy-duty vehicles is expanding. Compressed and liquefied biomethane are increasingly being used as vehicle fuels, reducing the carbon footprint of the transportation industry. This trend is supported by the increasing number of biomethane refueling stations and the growing recognition of biomethane’s environmental benefits.

In addition, decentralized biogas production is gaining traction, particularly in rural and agricultural areas. Small-scale biogas plants can help local communities manage organic waste and produce renewable energy, creating new opportunities for energy independence and rural development. Furthermore, as consumer awareness of sustainability and carbon neutrality grows, there is an opportunity to capitalize on the demand for green energy solutions, particularly from industries seeking to meet sustainability targets.

Market Challenges

The biomethane and biogas market faces several challenges, with the most significant being the high capital investment required for biogas infrastructure, feedstock supply inconsistencies, and regulatory hurdles. While the market is growing, the financial challenges of setting up biogas plants can discourage potential investors, particularly in regions where financial incentives are limited.

In addition, feedstock availability remains a challenge. Many biogas plants rely on specific organic waste streams, and fluctuations in feedstock supply can impact production volumes. This issue is particularly relevant in regions where waste management systems are not well-developed, which can result in inconsistent biogas supply.

Regulatory uncertainty is also a major challenge. In some regions, the absence of clear policies and regulations around biomethane production can make it difficult for investors to gauge the long-term viability of projects. The lack of uniform quality standards for biomethane also creates challenges in terms of market integration, particularly when injecting biomethane into natural gas grids.

Lastly, market competition from other renewable energy sources such as solar and wind energy presents a challenge. While biogas offers significant benefits in terms of waste management and energy production, it is often overshadowed by other renewable technologies that benefit from larger-scale investments and more streamlined deployment.

Segmentation Analysis

The biomethane and biogas market can be segmented based on various factors such as type, application, and region. Each of these segments plays a crucial role in the market’s overall growth and development. Understanding the segmentation is vital for businesses and investors looking to explore specific opportunities within the market. By analyzing each segment, it becomes clear that biomethane and biogas serve multiple industries and have diverse applications, ranging from waste management to renewable energy production.

By Type

1. Biogas: The production of biogas involves the anaerobic digestion of organic materials such as agricultural waste, food waste, sewage sludge, and industrial effluents. This biogas is a mixture of methane, carbon dioxide, and other gases and is typically used for generating electricity, heat, and as a fuel for vehicles in some cases. It is widely used in power plants and other industrial applications where raw biogas can be effectively utilized for energy generation.

2. Biomethane: Biomethane, which is produced by upgrading biogas to remove impurities such as carbon dioxide, hydrogen sulfide, and water, is a purified form of biogas. Biomethane has a similar composition to natural gas, making it suitable for injection into natural gas grids or for use in vehicles. Biomethane is gaining popularity due to its potential as a clean and renewable substitute for natural gas in the transportation sector and its use in residential, commercial, and industrial applications.

By Application

1. Energy Generation: Both biogas and biomethane are widely used for power generation and heating applications. Biogas plants that generate electricity through combustion or gas turbines are common in many countries. Additionally, biomethane is becoming increasingly popular as a fuel source for combined heat and power (CHP) systems. These systems are particularly efficient for supplying energy in rural areas or industries looking for local energy solutions, reducing reliance on grid power.

2. Transportation: In the transportation sector, biomethane is used as a substitute for natural gas in vehicles, especially heavy-duty trucks, buses, and waste collection vehicles. The growing adoption of compressed natural gas (CNG) and liquefied natural gas (LNG) vehicles powered by biomethane is driving demand in this segment. The use of biomethane as a fuel helps reduce greenhouse gas emissions and air pollution, making it an attractive alternative to traditional fossil fuels.

3. Industrial Processes: The biogas and biomethane market also plays a significant role in industrial applications, where these gases are used as a fuel source for various manufacturing processes. Biomethane, in particular, is used in industries that require high thermal energy for production processes. It is an efficient, renewable energy source that helps reduce the overall carbon footprint of industries.

4. Waste Management: The waste management sector is one of the most significant beneficiaries of the biogas industry. The conversion of organic waste into biogas through anaerobic digestion not only helps manage waste but also provides a valuable source of renewable energy. Moreover, this process also generates organic fertilizers that can be used in agriculture.

Biomethane and Biogas Market Regional Outlook

The biomethane and biogas market is geographically diverse, with different regions experiencing varying levels of growth due to factors such as government policies, availability of feedstock, and infrastructure. The market is expanding across several key regions: North America, Europe, Asia-Pacific, and the Middle East & Africa.

North America

North America, led by the United States and Canada, is witnessing growing adoption of biomethane technologies, primarily driven by rising demand for renewable energy sources and sustainability initiatives. The U.S. government’s policies supporting clean energy production, such as the Renewable Fuel Standard (RFS) and incentives for biogas plant development, are bolstering market growth. The use of biomethane in the transportation sector, especially in heavy-duty vehicles, is increasing, with several biomethane refueling stations emerging across the region. The growth of the market is further supported by advancements in upgrading technologies and biogas production methods, making it more cost-effective and scalable.

Europe

Europe remains the largest market for biomethane and biogas, with countries such as Germany, the United Kingdom, and France leading the charge in renewable energy adoption. The European Union’s Renewable Energy Directive (RED II), which sets ambitious targets for renewable energy usage, has played a pivotal role in driving the biomethane market in the region. In particular, Germany has established itself as a global leader in biogas production, with a well-developed infrastructure for biomethane and biogas plants. The use of biomethane in the transportation sector is also growing, with an expanding network of refueling stations and vehicles running on compressed natural gas (CNG).

Asia-Pacific

The Asia-Pacific region is experiencing rapid growth in the biomethane and biogas market, driven by rising energy demands, waste management needs, and government incentives to adopt clean energy solutions. Countries like China, India, and Japan are investing heavily in renewable energy projects, including biogas plants. China, in particular, has a large agricultural sector that produces significant amounts of organic waste, making it an ideal location for biogas production. India is also focusing on developing decentralized biogas systems to provide rural areas with renewable energy. Biomethane adoption is expected to rise, particularly in the transportation sector, where there is increasing demand for cleaner fuels.

Middle East & Africa

The Middle East & Africa region presents a unique opportunity for biomethane and biogas market growth, primarily due to the region’s efforts to diversify its energy sources. While traditionally reliant on fossil fuels, several countries in the Middle East, such as the UAE and Saudi Arabia, are now investing in renewable energy projects, including biogas production. The African market is also seeing growth, particularly in countries with large agricultural sectors like South Africa and Kenya, where organic waste can be converted into biogas to meet local energy needs. Waste management and energy production from organic materials offer viable solutions to address both energy deficits and waste disposal issues.

List of Key Biomethane and Biogas Companies Profiled

• Fletcher Building
• Wilsonart
• Panolam Industries
• Kronospan
• ASD
• EGGER
• Greenlam
• OMNOVA Solutions
• Merino
• Abet Laminati
• Arpa Industriale
• Gentas
• Sonae Indústria
• PFLEIDERER
• Trespa International
• FORMILINE
• LAMITECH
• Stylam
• Hopewell
• Royal Crown Laminates
• Zhenghang
• Guangzhou G&P

Covid-19 Impacting Biomethane and Biogas Market

The biomethane and biogas market was significantly impacted by the COVID-19 pandemic, which disrupted supply chains, delayed project timelines, and caused fluctuations in energy demand. However, the pandemic has also highlighted the need for energy independence and sustainability, leading to an increased focus on renewable energy sources like biomethane and biogas. As countries recover, there is a renewed interest in clean energy solutions to support economic growth and environmental goals.

Investment Analysis and Opportunities

Government Policies and Incentives: A major driver of investment in the biomethane and biogas market is government support for renewable energy initiatives. In many regions, such as the European Union and North America, policymakers are implementing stricter regulations to reduce carbon emissions and increase renewable energy production. Countries like Germany, the United Kingdom, and France have adopted ambitious renewable energy targets, with financial incentives and subsidies for biogas and biomethane projects. These incentives lower the financial barriers for investors and businesses, making the market more attractive.

Technological Advancements: Continuous technological innovations in the biomethane and biogas production process have made the sector more efficient and cost-effective. For instance, advancements in anaerobic digestion technology and biogas upgrading systems have significantly improved the yields and quality of biomethane. Additionally, improvements in biogas plant design and waste-to-energy technologies have enhanced the feasibility of scaling up production. Investors are keen on funding companies that are involved in research and development of these next-generation technologies, as they offer a high potential return on investment.

Sustainability and ESG Goals: Investors are increasingly focused on environmental, social, and governance (ESG) factors, with a growing number of institutional investors and private equity firms looking for sustainable investment opportunities. The biomethane and biogas market is particularly attractive for these investors, as biogas and biomethane production are viewed as key components of the transition to a low-carbon economy. The growing importance of ESG considerations has led to increased investments in companies involved in renewable energy production, waste management, and green infrastructure.

Market Expansion: The demand for biomethane is expected to grow significantly, particularly in the transportation sector. Biomethane is gaining popularity as a cleaner alternative to conventional fuels in heavy-duty vehicles like buses, trucks, and waste collection fleets. The expansion of the biomethane fueling infrastructure is another area that presents investment opportunities. Investors can fund the development of compressed natural gas (CNG) and liquefied natural gas (LNG) refueling stations, which will further accelerate the adoption of biomethane as a vehicle fuel.

Emerging Markets: Asia-Pacific and Africa represent significant opportunities for investment in the biomethane and biogas market. These regions have large agricultural sectors that generate significant organic waste, creating a natural feedstock for biogas production. Governments in countries like China, India, and South Africa are increasingly focusing on clean energy solutions and waste management, creating a favorable environment for the expansion of the biomethane sector. As these regions invest in renewable energy infrastructure, they present attractive opportunities for investors to tap into a rapidly growing market.

Recent Developments

• Increased Investment in Biogas Upgrading Technologies: Several leading players in the biomethane and biogas market have been focusing on technological advancements in biogas upgrading systems, making biomethane production more efficient and cost-effective. Companies are investing in innovative upgrading methods, such as pressure swing adsorption (PSA) and water scrubbing, to enhance the quality of the gas for commercial use.

• Biomethane as a Vehicle Fuel: The increasing adoption of biomethane in the transportation sector has been a major development. With several countries offering incentives for low-emission vehicles, biomethane has emerged as a viable alternative to natural gas, especially in the heavy-duty vehicle segment.

• Expansion of Biogas Refueling Infrastructure: To support the growing demand for biomethane in transportation, there has been a marked increase in the establishment of biomethane refueling stations globally. This infrastructure expansion is critical for increasing the adoption of biomethane-powered vehicles.

• Partnerships and Collaborations: Companies across the biomethane and biogas value chain are forming partnerships to enhance their product offerings and expand market reach. Collaborations between technology providers, government bodies, and energy companies are helping accelerate the growth of the market.

• Regulatory Changes and Support: Several countries have introduced new regulations and financial incentives aimed at boosting biomethane production. Governments are increasingly adopting supportive policies to reduce carbon emissions and transition to renewable energy, making the biomethane and biogas market an attractive area for investment.

REPORT COVERAGE of Biomethane and Biogas Market

• Market Size and Forecast: The report offers quantitative data on market size, forecasts, and growth rates for each segment.
• Competitive Landscape: Key companies in the market are profiled, including their market share, revenue, product offerings, and recent developments.
• Technological Insights: Detailed information is provided on the latest technological innovations, such as biogas upgrading technologies and improvements in anaerobic digestion.
• Regional Analysis: The report covers the market outlook for key regions, including North America, Europe, Asia-Pacific, and Middle East & Africa.
• Market Trends and Drivers: Key trends affecting the growth of the biomethane and biogas market are highlighted, along with detailed analysis of market drivers and challenges.

NEW PRODUCTS

• Biogas Upgrading Systems: New products in the biogas upgrading segment are focused on enhancing the quality of biomethane by removing impurities such as carbon dioxide and hydrogen sulfide. Companies are developing more cost-effective, compact, and energy-efficient systems to upgrade raw biogas into high-purity biomethane suitable for injection into natural gas grids or use as vehicle fuel.

• Modular Biogas Plants: The development of modular biogas plants is another key innovation in the biomethane and biogas market. These plants are designed for easy deployment and scalability, enabling businesses to quickly set up biogas production facilities in areas with significant organic waste. Modular systems are particularly attractive for rural areas or regions with limited access to large-scale infrastructure.

• Biomethane-Fueled Vehicles: Biomethane is increasingly being adopted as a clean alternative fuel in the transportation sector, especially for heavy-duty vehicles like trucks and buses. Companies are developing new products, including biomethane-powered trucks and refueling stations, to facilitate the transition to renewable transportation fuels. 

• Biogas Fertilizers: Another innovative product in the biomethane and biogas market is the use of biogas byproducts to produce organic fertilizers. The digestate from anaerobic digestion can be processed into high-quality fertilizers that can be used in agriculture.