Biogas Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented, By Source (Municipal, Agricultural, Industrial), By Application (Vehicle Fuel, Electricity, Heat, Upgraded Biogas, Cooking Gas), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 89.56 Billion
CAGR (2026-2031)	6.33%
Fastest Growing Segment	Vehicle Fuel
Largest Market	Europe
Market Size (2031)	USD 129.43 Billion

Market Overview

The Global Biogas Market will grow from USD 89.56 Billion in 2025 to USD 129.43 Billion by 2031 at a 6.33% CAGR. Biogas is a renewable energy source produced through the anaerobic digestion of organic matter, such as agricultural residue, manure, and municipal solid waste, consisting primarily of methane and carbon dioxide. The market is fundamentally driven by the escalating global imperative for energy security and the enforcement of rigorous environmental regulations aimed at decarbonization. These factors compel industries to adopt circular economy frameworks, transforming waste into viable energy to mitigate greenhouse gas emissions. According to the World Bioenergy Association, in 2024, global biogas demand reached 1,746 PJ, underscoring the sector's expanding role in the renewable energy landscape.

However, a significant challenge impeding market expansion is the high capital expenditure required for plant construction and infrastructure upgrading. The substantial investment needed for establishing reliable feedstock supply chains and processing facilities often necessitates government subsidies to ensure financial viability. This economic barrier limits widespread adoption, particularly in emerging economies where funding mechanisms for capital-intensive renewable energy projects remain insufficient.

Key Market Drivers

The proliferation of government subsidies, tax credits, and feed-in tariffs is a primary catalyst propelling the global biogas market, as financial incentives are crucial for overcoming high initial capital costs. Governments worldwide are implementing robust funding mechanisms to de-risk projects and attract private capital, thereby accelerating infrastructure development. For instance, the Inflation Reduction Act in the United States has stimulated the sector by offering tax credits for renewable natural gas projects. This fiscal support has led to tangible market expansion; according to the American Biogas Council, February 2025, in its annual industry assessment, investment in new U.S. biogas systems surged by 40% in 2024, reaching a record total of over $3 billion. Such financial frameworks ensure the economic viability of anaerobic digestion facilities and encourage the integration of advanced upgrading technologies. According to the International Energy Agency, in 2025, driven by these supportive policy environments, global production of biogas and biomethane is projected to increase by 22% between 2025 and 2030.

Concurrently, the escalating demand for Bio-CNG and Bio-LNG in the transportation sector is reshaping market dynamics, particularly as heavy-duty logistics and maritime industries seek immediate decarbonization solutions. Biomethane offers a drop-in alternative to fossil fuels that utilizes existing engine technology and refueling infrastructure, making it a pragmatic choice for fleet operators aiming to reduce their carbon footprint. This trend is especially pronounced in regions with established gas networks and stringent emission targets. According to the European Biogas Association, December 2024, in the 'Statistical Report 2024', approximately 23% of the biomethane produced in Europe was utilized specifically for the transport sector, highlighting the critical role of mobility applications in driving consumption. As corporations strive to meet net-zero logistics goals, the adoption of liquefied biogas is expected to rise, further incentivizing the conversion of organic waste into high-value transport fuels.

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Key Market Challenges

The growth of the global biogas market is severely constrained by the substantial capital expenditure required for the establishment of anaerobic digestion plants and associated infrastructure. Developing these facilities demands heavy upfront investment in specialized technology, including fermentation tanks, gas upgrading units, and grid connection systems. This financial burden restricts market entry primarily to large-scale entities with access to significant liquidity or government-backed financing, while effectively pricing out smaller operators. Consequently, the sector struggles to establish the comprehensive feedstock supply chains and processing capabilities needed for widespread adoption, particularly in emerging economies where high-interest rates and limited funding mechanisms further exacerbate the issue.

This economic barrier creates a significant disparity in project viability based on size, preventing the market from realizing its full potential in decentralized agricultural sectors. The inefficiency of capital allocation for smaller projects is a documented hurdle. According to the European Biogas Association, in 2024, capital costs for smaller biogas facilities were found to be two to three times higher per megawatt of capacity compared to larger biomethane plants. This cost differential creates a prohibitive environment for small-to-medium enterprises, stalling the development of a diverse and resilient global biogas infrastructure and concentrating growth only in highly subsidized, industrial-scale applications.

Key Market Trends

The Integration of Carbon Capture and Utilization (CCU) Systems is fundamentally altering the market by transforming anaerobic digestion facilities into carbon-negative production hubs. Operators are increasingly installing liquefaction units to capture the high-purity biogenic carbon dioxide separated during the biomethane upgrading process, rather than venting it into the atmosphere. This captured CO2 creates a secondary revenue stream, supplying industries such as food and beverage processing or greenhouse horticulture, while simultaneously lowering the carbon intensity score of the produced fuel to meet stricter environmental standards. According to the European Biogas Association, December 2024, in the 'Statistical Report 2024', the sector's production capacity created a potential supply of 29 million tonnes of biogenic CO2 in 2023, a volume equivalent to 71% of the European Union's total commercial carbon dioxide demand.

Simultaneously, the Diversification of Feedstocks Beyond Traditional Energy Crops is gaining momentum as the industry shifts toward processing agricultural residues and organic waste to ensure long-term sustainability. This trend is driven by regulatory pressures to eliminate food-feed competition and the need to unlock vast untapped potential in the farming sector, moving development focus from landfills and purpose-grown crops to manure-based systems. By utilizing substrates like animal slurry and food scraps, operators can secure abundant, low-cost inputs that often qualify for higher-tier advanced biofuel incentives. According to the American Biogas Council, February 2025, in its annual market data release, this structural shift was evidenced in the United States where new agricultural biogas projects grew four times faster than landfill gas projects in 2024, with 93 new farm-based facilities coming online.

Segmental Insights

The vehicle fuel segment is emerging as the fastest-growing category in the global biogas market due to increasing regulatory pressure to reduce carbon emissions in transportation. Major policy initiatives, such as the Renewable Energy Directive by the European Union, are promoting the use of biomethane as a direct substitute for fossil fuels. This uptake is facilitated by the ability to utilize existing natural gas infrastructure, offering a practical solution for fleet operators aiming to meet sustainability targets. Consequently, the shift toward renewable natural gas in commercial and public transport is significantly propelling the expansion of this market segment.

Regional Insights

Europe holds the leading position in the global biogas market due to a robust combination of favorable government policies and established renewable energy infrastructure. The region benefits significantly from initiatives like the European Green Deal, which mandates strict carbon reduction goals and incentivizes the adoption of clean energy alternatives. Additionally, the European Biogas Association plays a critical role in fostering industry collaboration and standardizing practices across the continent. These coordinated efforts to utilize organic waste for energy generation create a stable environment for continuous market development.

Recent Developments

• In November 2024, Wärtsilä Gas Solutions secured a contract to supply advanced biogas upgrading and liquefaction systems for a new bioLNG facility in Sweden. The project, commissioned by the Nordic energy company Gasum, will utilize agricultural and organic household waste to produce high-quality liquefied biogas. The technology provided includes a storage tank, an export station, and a liquefaction unit capable of producing 25 tons of bioLNG daily. This development supports the expansion of the renewable gas infrastructure in the Nordic region and aligns with the industry's shift towards decarbonizing heavy transport through the use of liquefied biomethane.
• In August 2024, Electrochaea received industry recognition for its research in biological methanation, winning the Research and Innovation category at the AD and Biogas Industry Awards. The company developed a proprietary technology that utilizes ancient microorganisms known as archaea to convert green hydrogen and captured carbon dioxide into synthetic methane. This renewable gas can be stored and transported using existing natural gas infrastructure, offering a scalable solution for energy storage and carbon recycling. The award highlighted the successful demonstration of this technology at industrial pilot scales, validating its potential to reduce carbon footprints in the global biogas market.
• In May 2024, Engie strengthened its commitment to the renewable gas sector by investing in Wase, a British startup specializing in waste-to-energy technology. This strategic move was executed through the company's corporate venture capital arm and focuses on deploying Wase's proprietary electro-methanogenic process. The technology is designed to increase methane yields from biomass by up to 30 percent and accelerate treatment times for organic waste, including feedstocks that are typically difficult to process. The collaboration is expected to enhance the operational efficiency of anaerobic digestion plants and support the company's goal of scaling biomethane production in Europe.
• In April 2024, TotalEnergies and Vanguard Renewables entered into an agreement to establish an equally owned joint venture dedicated to developing renewable natural gas (RNG) projects in the United States. This collaboration aims to launch ten RNG facilities within the first year, possessing a combined annual capacity of 0.8 terawatt-hours. The partnership leverages the expertise of Vanguard Renewables in farm-based organics-to-energy production alongside the significant industrial and financial scale of the French energy major. The joint venture intends to consider further investment in a potential pipeline of approximately 60 additional projects across the country to scale up biomethane production.

Key Market Players

• Engie SA
• EnviTec Biogas AG
• Air Liquide
• Hitachi Zosen Inova
• DMT Environmental Technology
• WELTEC BIOPOWER GmbH
• PlanET Biogas Global GmbH
• Xebec Adsorption Inc.
• Malmberg Water
• Carbotech Gas Systems GmbH

By Source	By Application	By Region
Municipal Agricultural Industrial	Vehicle Fuel Electricity Heat Upgraded Biogas Cooking Gas	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Biogas Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Biogas Market, By Source:

• Municipal
• Agricultural
• Industrial

• Biogas Market, By Application:

• Vehicle Fuel
• Electricity
• Heat
• Upgraded Biogas
• Cooking Gas

• Biogas Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE