Biomethane Market: Global Industry Analysis and Forecast (2024-2030)

The Biomethane Market size was valued at USD 5431.40 Million in 2023 and the total Biomethane revenue is expected to grow at a CAGR of 6.08% from 2024 to 2030, reaching nearly USD 8210.06 Million by 2030.

Biomethane is rising as a particularly lucrative opportunity for commodity traders, driven by rapid market growth, feedstock, end-consumer diversity, and early market positioning. As European production of biomethane is set to increase tenfold by 2030, the biomethane market is expected to present a considerable trading (buying and selling) margin potential. This growth is fueled with the aid of the pressing need for decarbonization across challenging sectors which include heavy-obligation transport and business warmth, wherein biomethane serves as a possible alternative to standard natural gas. The European biomethane market, currently accounting for about 2% of overall natural gas intake, is expected to reach a total addressable market of 300 to 340 TWh by 2030.

Key factors contributing to the biomethane market's attractiveness include rapid growth in demand, diverse feedstock sources, and varying carbon intensities of biomethane production. The transport sector stands out as a major driver, with a significant shift towards biomethane replacing conventional compressed and liquefied natural gas. This shift is supported by political commitments, investment inflows, and evolving policies that create favorable conditions for biomethane trading. The biomethane market’s fragmentation, with various feedstocks ranging from agricultural waste to municipal waste, provides traders with opportunities to exploit differences in carbon intensity and pricing, leading to higher gross margins compared to conventional LNG trading.

Moreover, the biomethane trading landscape remains in its nascent stage, offering traders the chance to influence and shape the market. As the sector matures, early participants will benefit from capturing substantial value, optimizing value chains, and establishing pan-European low-carbon systems. The diversity in feedstock and end-user requirements enables traders to engage in arbitrage and adjust their strategies based on carbon intensity and demand fluctuations.

In the United States, biomethane market growth has been primarily driven by the transport sector, supported by initiatives such as the Renewable Fuel Standard (RFS) and California’s Low Carbon Fuels Standard (LCFS). Recent years have seen accelerated growth in biomethane production in the United States, thanks to new federal and state-level policies. The new RFS Set Rule aims to double biomethane supplies within three years, and combined targets for biogas, renewable natural gas (RNG), and injected biomethane in California suggest a 2.1-fold expansion over the next five years. Generous financial support from various programs, particularly those allowing additionality, provides a robust framework for this rapid growth. This environment is expected to significantly boost biomethane production, leveraging both federal incentives and state-level goals to meet rising demand and achieve ambitious sustainability targets.

India is a lucrative region for biomethane providers to generate the highest revenue share. India also has considerable small-scale household biogas production in rural areas lacking grid access, with biogas being an important energy source for clean cooking and lighting. Through its One Nation One Gas Grid program, India plans to enlarge the role of natural gas in its economy by investing in new gas infrastructure, aiming to raise the share of natural gas in the energy sector to nearly 15% by 2030 (from 6.2% in 2022). India has recently announced a blending mandate of 5% biomethane in compressed natural gas (CNG) for transport and in piped natural gas for domestic use from 2028, growing each year from 1% in FY 2025-2026.



In China, the growth of the biomethane market has evolved significantly from its initial focus on household digesters to large-scale, engineered biogas projects. Early efforts concentrated on providing clean energy for cooking and residential use in rural areas, with household digesters accounting for approximately 300,000 TJ/year of biogas production. By 2015, the Chinese Rural Household Biogas State Debt Project had successfully installed nearly 42 million digesters, reflecting a strong commitment to small-scale biogas systems.

However, from 2015 onwards, China’s policy direction shifted towards supporting larger-scale biogas plants designed for combined heat and power generation. This transition was marked by increased capital aid and feed-in tariffs aimed at promoting engineered biogas projects. Since 2019, the focus has been on large-scale bio-natural gas (BNG) or biomethane projects, which integrate rural and urban waste feedstocks to generate both electricity and gas for grid injection.

The 14th Five-Year Plan for Renewable Energy Development, launched in 2022, underscores a renewed push for biogas industry revitalization. Despite previous five-year plans falling short of their biogas targets, the sector is expected to grow due to several factors: increased investment from national and international energy companies such as PetroChina, China Three Gorges Corporation, China General Nuclear Power Group, and international firms like Air Liquide and EnviTec Biogas AG; strengthened policy support; and improved grid access.

To know about the Research Methodology :- Request Free Sample Report

MMR Key Findings in the Global Biomethane Market:

1. Biomethane production in Europe saw a nearly 20% increase in 2022, rising from 3.5 bcm in 2021 to 4.2 bcm in 2022. This growth reflects the growing importance of biogases in Europe's energy mix, especially as the EU's dependency on natural gas imports increased from 83% in 2021 to 97% in 2022.

2. Major biomethane producers in Europe include Germany, the United Kingdom, the Netherlands, Denmark, Sweden, and France. While most countries have a balanced production and consumption, Denmark and Germany produce more biomethane than they consume, with excess being exported or stored. In contrast, Sweden consumes more biomethane than it produces due to incentives focused on consumption rather than production.

3. Consumer willingness to pay for biomethane is heavily influenced by GHG emission reductions and additional costs compared to natural gas. The cross-border trade of biomethane remains limited, with ongoing efforts to establish European harmonization and cross-border cooperation. REGATRACE aims to improve the efficiency of biomethane trade by setting up a unified system for Guarantees of Origin (GoO) and integrating it with other renewable gas systems.

4. Shell's acquisition of Danish biomethane producer Nature Energy and plans to source biomethane from other European countries like Poland, France, Spain, and the Czech Republic highlight its strategy to integrate biomethane production and distribution across Europe. This supports the broader European goal of increasing biomethane output tenfold by 2030 as part of the RepowerEU plan.



Brazil Biomethane Market: Significant Growth Potential Region

Brazil is expected to be the lucrative region, registering rapid CAGR, and generating a significant amount of revenue share in the global biomethane market during the forecast period. This growth is driven by the country's vast potential for biogas production from organic raw materials. According to the analysis, the production of biogas and biomethane is expected to capture 25% to 30% of Brazil's natural gas demand. This growth is fueled by a rising need for renewable energy sources and advancements in biogas technology.

In addition, key factors contributing to this growth include the diversity of production sources. In Brazil, urban solid waste, by-products from the sugarcane industry, and animal waste are crucial raw materials. Municipal solid waste management and the sugarcane industry's organic by-products, such as vinasse and bagasse, play significant roles, while animal waste supports a circular economy approach to sustainability.

The Brazilian government performs a critical role within the biogas and biomethane market through more than a few supportive guidelines and incentives. Recognizing the importance of renewable electricity, Brazil has carried out diverse initiatives to promote biogas and biomethane production. These consist of subsidies and tax incentives designed to draw investment and foster regional growth. Such economic measures are pivotal for encouraging both huge-scale and small-scale tasks within the biogas sector.

A key initiative is the National Biogas and Biomethane Program, spearheaded by the Ministry of Mines and Energy. This application pursuits to reinforce the production and usage of biogas and biomethane throughout the United States. It presents technical and financial assistance to biogas projects, making sure they have the important guide to be successful. Additionally, this system makes a specialty of schooling experts and facilitates the adoption of modern technologies, thereby enhancing the overall performance and effectiveness of biogas and biomethane manufacturing.

Moreover, precise regulation is important for sustainable market growth. The National Agency for Petroleum, Natural Gas, and Biofuels (ANP) is actively concerned with organizing standards and indications for biogas and biomethane manufacturing and commercialization. These rules are vital for keeping fuel exceptional and safe, making sure that biogas and biomethane meet enterprise standards and are dependable for use.

Thus, Brazil’s biogas and biomethane market shows significant promise during the forecast period. With diverse production sources, economic benefits, and robust government support, the sector is well-positioned for growth. Continued investment in infrastructure, innovation, and supportive public policies will be key to realizing its full potential and establishing Brazil as a global leader in renewable energy.

Ukraine's Strategic Entry into the Biomethane Market: A New Era of Renewable Energy and Investment Opportunities

On May 30, 2024, Ukrainian President Volodymyr Zelenskiy officially launched Ukraine’s biomethane market, positioning the country as a significant player in Europe's renewable energy landscape. This move aims to attract international investment and could potentially meet up to 20% of the European Union's biomethane demand, given Ukraine's capacity to produce 22 billion cubic meters (BCM) of biomethane. The country's extensive agricultural resources provide a robust foundation for this growth, with its potential exceeding that of many European nations. The newly enacted legislation focuses on streamlining customs control and clearance for biomethane transported via pipelines across Ukraine’s borders. With 22 biomethane plants either operational or in development, Ukraine is preparing to integrate these facilities into its gas distribution network. Technical approvals have been granted for plants in Kyiv and Dnipropetrovsk, with additional approvals pending for other regions. Currently, five refining plants are set to produce 77 million cubic meters of biomethane this year, with projections to double production by 2025.

Despite progress, Ukraine faced challenges due to wartime restrictions affecting biomethane exports. However, the recent lifting of these restrictions has renewed optimism. Ukraine is preparing to begin exports to Germany and align with EU sustainability criteria to facilitate integration into the European single market. The new legislation includes measures to ensure biomethane is subject to the same customs controls as natural gas, based on volume and sustainability standards. The biomethane initiative also aligns with Ukraine's strategic goals of reducing reliance on Russian energy imports and leveraging its agricultural assets for sustainable energy production. The State Agency for Energy Efficiency and the Ministry of Energy emphasize the need to stimulate both domestic and export markets for biomethane. Naftogaz Group has expressed support for expanding production and transportation infrastructure, including potential financial mechanisms to attract investment in the biomethane market.

Worldwide Total Biogas Consumption Trends From 2015 To 2021

(Production in Volume in 1000 m3)



Region/ Year
2015
2016
2017
2018
2019
2020
2021


Total
15791875
15808177
15748093
15677520
15593902
15485345
15375668


Africa
41645
47463
51090
56167
54997+
60004
63597


Asia
15538196
15541482
15476423
15390249
15307792
15194130
15080919


C America + Caribbean
17673
20746
21623
21370
21366
21336
21314


South America
194360
198485
198956
209734
209709
209836
209794



Europe’s Leadership in Biomethane Production: Advancing Renewable Energy Goals and Market Growth by 2030

Europe is the largest producer of biogas and biomethane in the world today. The region scale up production of these renewable gases in order to meet renewable energy demand by 2030 and achieve climate targets in 2050. The EU currently produces enough biomethane to satisfy around 2% of its total natural gas consumption. Therefore, the region held the largest market share and dominated the global biomethane market growth in 2023. Driven by electricity generation, the biogas industry is now pivoting towards biomethane due to recent policy shifts that emphasize diversification in biogas utilization. This trend is expected to continue, with the majority of biogas growth in Europe over the forecast period attributed to biomethane production from both new facilities and upgraded existing plants.

In major European markets like Germany, biomethane's role in transportation has become particularly lucrative. Producers benefit from clean-fuel certificates and renewable fuel quotas, making transport the most profitable end-use for biomethane in these regions. Countries with established gas vehicle fleets and filling stations are experiencing robust growth driven by this sector. The European Union's integration of biogas and biomethane into its Guarantee of Origin (GO) system is further bolstering the biomethane market growth. This system aids compliance with the EU Emissions Trading System (EU ETS) and supports private companies in meeting their emissions reduction targets.

The RED II regulation governs biogas GOs, and several European countries—such as Denmark, Germany, the Netherlands, Austria, Switzerland, the UK, and France—have established national registries and bilateral agreements to facilitate cross-border biomethane trading. Expanding this mechanism to other countries will enhance international trade, whether through physical gas exchanges or certificate trading.

The EU's 2022 REPowerEU plan ambitions for a non-binding target of 35 BCM of biomethane via 2030. While some countries, like Denmark, have already done widespread biomethane integration (37.9% in November 2023), others, along with Belgium, Spain, and Poland, are at an earlier stage of development. Achieving the bold goal will require accelerated growth and supportive policy frameworks throughout the continent.

Biogas production in Europe remained stable between 2016 and 2022. However, the volume of refined biomethane in the market increased, reaching 44 TWh in 2022. Europe is expanding its biomethane capacity, with nearly 20,000 biogas plants and about 1,400 biomethane plants. Denmark, a top producer, meets 40% of its gas demand with biomethane and aims for 100% by 2030. Other major producers include Germany, France, the UK, the Netherlands, and Italy. Despite softening natural gas prices, demand for biomethane remains strong, although uncertainty persists, prompting buyers to secure long-term agreements. Thus, these factors boosted the biomethane market growth in the European region.



Sweden’s Growing Biomethane Market: A Shift Towards Renewable Energy Amidst Energy Price Volatility and Strategic Goals for 2045
Sweden's biomethane market has shown an astonishing increase amidst a difficult challenging landscape. As of 2022, energy gases contribute a modest 3% to Sweden's total energy supply, with biogas and biomethane accounting for a good-sized proportion. The use of electricity gases dropped from 20.4 TWh in 2021 to 16.2 TWh in 2022, in large part because of soaring electricity charges exacerbated by the Russian conflict in Ukraine. Renewable gases, which include biogas and biomethane, represented 18% of the total energy gases used in 2022, whilst fossil gases dominated at 72%. Biogas manufacturing in Sweden remained strong at 2.3 TWh in 2022, with 67% of this biogas upgraded to biomethane. Most of the upgraded biomethane is applied inside the delivery zone, which displays Sweden's sturdy commitment to renewable fuels for lowering carbon emissions. The manufacturing of liquefied biogas (LBG) has accelerated notably, with a 63% rise in LBG output in 2022 as compared to the previous year, driven by new LBG vegetation and a shift closer to manure-based production.

Sweden’s biogas and biomethane market faces a fragmented infrastructure, with nearby and nearby grids serving as main distribution channels. Biomethane as a delivery gasoline has grown, with an average biomethane of 96% in compressed natural gasoline (CNG) and 95% in liquefied herbal gasoline (LNG) in 2022. The variety of CNG/CBG and LNG/LBG filling stations has multiplied, supporting a fleet of approximately 50,000 fuel vehicles. The national method for renewable electricity includes ambitious goals for 2045, specializing in a climate-neutral electricity sector and an enormous discount on greenhouse gas emissions. The roadmap for fossil-unfastened power gases envisions that each one power gases used in Sweden can be fossil-free by 2045. Key policy measures include a proposed countrywide biogas production target of 10 TWh by 2030 and continued assistance for biogas manufacturing via tax exemptions and manufacturing incentives.



Germany’s Thriving Biomethane Market: Leveraging GHG Quotas and International Trade Amidst Energy Crisis and Market Dynamics

The German biomethane market has emerged as a highly attractive sector due to its dynamic regulatory framework and evolving market conditions. Central to its appeal is the greenhouse gas (GHG) quota system, which incentivizes the use of sustainable biofuels by setting legal mandates for reducing emissions. This system, introduced in 2015, replaced the earlier biofuel quota, focusing on actual GHG reductions rather than merely the energetic quantity of biofuels. Under this system, biomethane, especially that produced from advanced substrates like farm manure, qualifies for significant benefits, including double crediting for GHG reductions. Germany's biomethane market saw record sales exceeding 11 TWh in 2022, driven by heightened demand for biomethane in the fuel sector and increased import/export activities. The GHG quota's influence on the market is profound; it creates a lucrative environment for biomethane producers by linking revenue to the amount of GHG reduction achieved. This system favors biomethane from substrates like manure, which offers superior GHG reduction values, thus enhancing revenue prospects.

Price development for biomethane is influenced by both long-term contracts and spot market dynamics. Long-term contracts provide stability with the potential for significant revenue, while the spot market offers opportunities based on current prices and immediate supply-demand balances. The energy crisis and rising natural gas prices have further heightened interest in biomethane, contributing to its growing market value and increasing international trade. International trade is crucial, with a notable increase in biomethane imports from neighboring EU countries due to the GHG quota's favorable conditions. Countries such as Poland, the Czech Republic, Spain, and France play significant roles in supplying biomethane to Germany. However, the complex certification process and varied regulations for biomethane imports from outside the EU pose challenges. Ensuring compliance with sustainability standards and navigating certification requirements are essential for successful market participation. Overall, the German biomethane market is characterized by robust regulatory support, evolving market dynamics, and increasing international interest, making it a promising sector for both domestic and international stakeholders.
Biomethane Industry Ecosystem
Biomethane Market Scope: Inquiry Before Buying



Global Biomethane Market


Report Coverage
Details


Base Year:
2023
Forecast Period:
2024-2030


Historical Data:
2018 to 2023
Market Size in 2023:
US $ 5431.40 Mn.


Forecast Period 2024 to 2030 CAGR:
6.08%
Market Size in 2030:
US $ 8210.06 Mn.


 Segments Covered:
by Feedstock
Energy Crops
Animal Manure
Municipal Waste
Waste Water Sludge
Others


by Production Method
Anaerobic Digestion
Gasification
Others


by Application
Transportation
Power Generation
Others


by End-User Type
Industrial
Commercial
Residential



Biomethane Market, by Region
North America (United States, Canada, and Mexico)
Europe (UK, France, Germany, Italy, Spain, Sweden, Austria and Rest of Europe)
Asia Pacific (China, South Korea, Japan, India, Australia, Indonesia, Malaysia, Vietnam, Taiwan, and Rest of APAC)
Middle East and Africa (South Africa, GCC, Egypt, Nigeria and Rest of ME&A)
South America (Brazil, Argentina Rest of South America)
Leading Biomethane Market, Key Players:
1. Air Liquide (France)
2. Engie (France)
3. Nature Energy Biogass A/S (Denmark)
4. Terega Solutions (France)
5. Waga Energy (France)
6. Total Energy (France)
7. Archea Energy (Texas)
8. Envitec Biogas AG (Germany)
9. Future Biogas Ltd. (US)
10. Gaz Métro (Énergir) - Montreal, Canada
11. Greenlane Renewables - Burnaby, Canada
12. VERBIO - Leipzig, Germany
13. Landwärme GmbH - Munich, Germany
14. Future Biogas - Cambridge, UK
15. PlanET Biogas - Vreden, Germany
16. EnviTec Biogas AG - Lohne, Germany
17. Schmack Biogas - Schwandorf, Germany
18. BioConstruct GmbH - Melle, Germany
19. Scandinavian Biogas - Stockholm, Sweden
20. BTS Biogas - Brescia, Italy
21. Agraferm Technologies AG - Pfaffenhofen, Germany
22. Agrinz Technologies GmbH - Vienna, Austria
23. Puregas Solutions - Kalmar, Sweden
24. Nature Energy – Denmark
FAQs:
1. What are the growth drivers for the Biomethane market?
Ans. The increasing demand for renewable energy, government incentives, advancements in production technology, and the need for sustainable waste management solutions are expected to be the major drivers for the Biomethane market.

2. What are the factors restraining the global Biomethane market growth during the forecast period?
Ans. The high production costs, limited infrastructure for distribution, regulatory challenges, and competition from other renewable energy sources are expected to be the major factors restraining the global Biomethane market growth during the forecast period.

3. Which region is expected to lead the global Biomethane market during the forecast period?
Ans. Europe is expected to lead the global Biomethane market during the forecast period.

4. What is the projected market size and growth rate of the Biomethane Market?
Ans. The Biomethane Market size was valued at USD 5431.40 Million in 2023 and the total Biomethane revenue is expected to grow at a CAGR of 6.08% from 2024 to 2030, reaching nearly USD 8210.06 Million by 2030.

5. What segments are covered in the Biomethane Market report?
Ans. The segments covered in the Biomethane market report are Feedstock, Production Method, Application, End-User, and Region.