Global Biomethane Market Size By Type of Feedstock, By Technology of Production, By End-Use (Transportation Fuel, Natural Gas Grid Injection, Combined Heat and Power ), By Geographic Scope And Forecast

Biomethane Market Size And Forecast

Biomethane Market size was valued at USD 1.95 Billion in 2023 and is projected to reach USD 3.22 Billion by 2031, growing at a CAGR of 6.48% from 2024 to 2031.

Biomethane is a renewable gas produced from organic materials through anaerobic digestion or thermal gasification. It consists primarily of methane and can be used as a substitute for natural gas.

Biomethane is utilized in various sectors, including transportation (as a fuel for vehicles), electricity generation (to power turbines), and residential heating (for heating systems).

It can also be injected into the natural gas grid, contributing to energy supply.

The use of biomethane is gaining traction due to its environmental benefits, such as reducing greenhouse gas emissions and reliance on fossil fuels.

It offers a sustainable energy source that helps manage waste from agricultural, industrial, and municipal sources, promoting a circular economy.

Biomethane supports energy security and can provide cost-effective alternatives for energy generation, making it a crucial component in the transition to cleaner energy systems.

The biomethane market has substantial growth potential, particularly in regions with abundant organic waste resources.

As technology advances and production costs decrease, biomethane is expected to become a more competitive alternative to fossil fuels.

Global Biomethane Market Dynamics

The key market dynamics that are shaping the global biomethane Market include:

Key Market Drivers:

Increasing Demand for Renewable Energy: According to the International Energy Agency (IEA), renewable energy capacity additions increased by 45% in 2020, the largest year-on-year increase since 1999. For biomethane, the European Biogas Association reports that biomethane production in Europe increased by 23% in 2021, reaching 3.5 billion cubic meters (bcm). Growing global energy demands and the push for cleaner energy sources are driving interest in biomethane as a sustainable alternative to fossil fuels.

Government Incentives and Policies: Supportive regulations, subsidies, and incentives from governments worldwide to promote renewable energy sources enhance the viability of biomethane production.

Environmental Concerns: The IEA projects that biomethane production could reach 200 bcm by 2040, providing about 20% of today's natural gas demand. Rising awareness about climate change and the need to reduce greenhouse gas emissions motivate industries and governments to invest in biomethane as a cleaner energy solution.

Technological Advancements: Innovations in anaerobic digestion and gasification technologies improve the efficiency and cost-effectiveness of biomethane production, making it more competitive with traditional energy sources.

Waste Management Solutions: The World Bank estimates that global waste generation will increase to 3.40 billion tonnes by 2050, up from 2.01 billion tonnes in 2016. The need for effective waste management strategies drives the utilization of organic waste for biomethane production, providing a dual benefit of energy generation and waste reduction.

Key Challenges:

High Initial Investment Costs: The capital required to establish biomethane production facilities can be a significant barrier for new entrants and small-scale producers.

Feedstock Availability and Quality: Sourcing high-quality organic feedstock consistently can be challenging, impacting the overall efficiency and profitability of biomethane production.

Competition with Other Renewable Sources: The biomethane market faces competition from other renewable energy sources, such as solar and wind, which may have lower initial investment costs and faster deployment times.

Regulatory Hurdles: Navigating the complex regulatory landscape can pose challenges for biomethane producers, particularly concerning waste management and emissions standards.

Public Perception and Acceptance: There may be resistance or skepticism among the public regarding the use of organic waste for energy production, impacting market growth and acceptance.

Key Trends:

Integration with Circular Economy Models: The biomethane market is increasingly aligning with circular economy principles, promoting waste-to-energy solutions that reduce landfill waste while generating energy.

Technological Innovations: Biogas upgrading and purification technologies are enhancing biomethane quality, making it more compatible with existing natural gas infrastructure.

Partnerships and Collaborations: Strategic partnerships between companies, governments, and research institutions are becoming more common to promote innovation and expand biomethane production capabilities.

Decentralized Energy Production: A trend towards localized energy production is emerging, with small-scale biomethane facilities providing energy solutions for rural communities and reducing transmission losses.

Focus on Carbon Neutrality Goals: Many industries are incorporating biomethane into their sustainability strategies to achieve carbon neutrality targets, further driving demand for this renewable energy source.

Global Biomethane Market Regional Analysis

Here is a more detailed regional analysis of the global biomethane Market:

North America:

The North American biomethane market is witnessing significant growth, driven by the region's increasing emphasis on renewable energy sources and sustainability.

The U.S. Environmental Protection Agency (EPA) reports that under the RFS, biomethane production for transportation has grown from virtually zero in 2014 to over 543 million ethanol-equivalent gallons in 2021, a compound annual growth rate of 30%.

According to the American Biogas Council, the U.S. has the potential to build 13,500 new biogas systems, of which over 8,000 would be farm-based anaerobic digesters producing biomethane.

The United States and Canada are at the forefront of this development, with substantial investments in biomethane production technologies and infrastructure.

In the U.S., government initiatives, such as the Renewable Fuel Standard (RFS) and various state-level renewable portfolio standards, promote biomethane production and use.

These policies provide financial incentives for producers and consumers, encouraging the adoption of renewable natural gas (RNG) adoption in the transportation and heating sectors.

There is a growing recognition of biomethane's role in waste management, as it can be derived from organic waste materials such as agricultural residues, food waste, and landfill gas.

Canada is also advancing its biomethane initiatives, with provincial governments implementing policies to support the development of renewable energy projects.

The country has been successful in establishing numerous anaerobic digestion facilities that convert organic waste into biomethane, contributing to energy diversification and reduction of greenhouse gas emissions.

The increasing consumer awareness of sustainability and environmental concerns is driving demand for biomethane as a clean energy alternative.

The North American biomethane market is expected to continue expanding, with more projects being developed to harness the potential of organic waste for energy generation.

This growth is anticipated to play a crucial role in achieving regional sustainability goals and enhancing energy security.

Asia Pacific

The Asia Pacific biomethane market is anticipated to experience the fastest growth, driven by increasing energy demand, environmental concerns, and government support for renewable energy initiatives.

In Europe, the European Commission's REPowerEU plan aims to produce 35 bcm of biomethane by 2030, representing a ten-fold increase from current levels.

The European Biogas Association reports that biogas and biomethane production in Europe already prevents 87 million tonnes of CO2 equivalent emissions annually, demonstrating the sector's contribution to both waste management and emissions reduction.

Countries such as China, India, Japan, and Australia are at the forefront of this development, investing in biomethane production technologies and infrastructure to address their energy needs while reducing greenhouse gas emissions.

In China, the government has implemented various policies and regulations to promote the development of renewable energy, including biomethane.

The country has invested heavily in anaerobic digestion technology to convert agricultural waste, livestock manure, and food waste into biomethane, thereby enhancing energy security and reducing pollution.

Large-scale projects, such as biogas plants, are being developed to produce renewable natural gas for use in transportation and heating sectors.

India is also witnessing significant growth in the biomethane market, fueled by the need for sustainable waste management and energy production.

The Indian government has launched several initiatives, such as the "Swachh Bharat Abhiyan" (Clean India Mission), aimed at promoting waste-to-energy projects.

Biomethane is being generated from organic waste in urban areas, helping to address the challenges of waste disposal while providing a clean energy source.

In Japan, the focus is on utilizing biomethane as part of the country's strategy to achieve energy diversification and enhance energy security, particularly after the Fukushima nuclear disaster.

The government supports the establishment of biogas plants and encourages the use of agricultural and food waste for biomethane production.

The Asia Pacific biomethane market is poised for substantial growth, driven by supportive government policies, technological advancements, and a growing awareness of the environmental benefits of renewable energy.

This trend is expected to continue, with more projects being developed to harness the potential of organic waste for sustainable energy generation in the region.

Global Biomethane Market: Segmentation Analysis

The Global Biomethane Market is segmented based on Type of Feedstock, Technology of Production, End-Use, And Geography.

Biomethane Market, By Type of Feedstock

• Organic Waste
• Energy Crops
• Livestock Manure

Based on the Type of Feedstock, the Global Biomethane Market is segmented into Organic Waste, Energy Crops, and Livestock Manure. The Organic Waste segment holds significant growth in the Global Biomethane Market owing to the increasing focus on waste management and its transformation into renewable energy, which helps reduce greenhouse gas emissions and supports sustainable development goals.

Biomethane Market, By Technology of Production

• Anaerobic Digestion
• Biogas upgrading

Based on the Technology of Production, the Global Biomethane Market is segmented into Anaerobic Digestion and Biogas Upgrading. The Anaerobic Digestion segment significantly dominates the Global Biomethane Market owing to its cost-effectiveness and widespread adoption in converting organic waste into biogas. This technology is highly favored for its ability to handle a wide range of feedstocks, contributing to energy recovery and sustainable waste management.

Biomethane Market, By End Use

• Transportation Fuel
• Natural Gas Grid Injection
• Combined Heat and Power (CHP)

Based on End Use, the Global Biomethane Market is segmented into Transportation Fuel, Natural Gas Grid Injection, and Combined Heat and Power (CHP). The Transportation Fuel segment significantly dominates the Global Biomethane Market owing to the growing demand for sustainable fuel alternatives that reduce greenhouse gas emissions. Biomethane's compatibility with existing natural gas infrastructure makes it an attractive option for grid injection, while its use in CHP systems supports energy-efficient power generation and heat production.

Biomethane Market, By Geography

• North America
• Europe
• Asia Pacific
• Rest of the world

Based on Geography, the Global Biomethane Market is segmented into North America, Europe, Asia Pacific, and the Rest of the World. The North American biomethane market is witnessing significant growth, driven by the region's increasing emphasis on renewable energy sources and sustainability. The U.S. Environmental Protection Agency (EPA) reports that under the RFS, biomethane production for transportation has grown from virtually zero in 2014 to over 543 million ethanol-equivalent gallons in 2021, a compound annual growth rate of 30%. According to the American Biogas Council, the U.S. has the potential to build 13,500 new biogas systems, of which over 8,000 would be farm-based anaerobic digesters producing biomethane.

Key Players

The "Global Biomethane Market" study report provides valuable insight with an emphasis on the global market. The major players in the market are Engie, SUEZ, Enertech, Future Biogas, EnviTec Biogas AG, Verbio Vereinigte BioEnergie AG, Waste Management, Inc., Gazprom, Royal Dutch Shell plc, Veolia Environnement.

• This section offers in-depth analysis through a company overview, position analysis, the regional and industrial footprint of the company, and the ACE matrix for insightful competitive analysis. The section also provides an exhaustive analysis of the financial performances of mentioned players in the given market.

Our market analysis also entails a section solely dedicated to such major players wherein our analysts provide an insight into the financial statements of all the major players, along with product benchmarking and SWOT analysis. The competitive landscape section also includes key development strategies, market share, and market ranking analysis of the above-mentioned players globally.

Global Biomethane Market Key Developments

• In February 2023, ENGIE announced its acquisition with Vol-V Biomasse; with this acquisition, ENGIE had a portfolio of nearly 80 projects, thus supporting its aim of producing 5 TWh/year of biomethane by 2030.
• In March 2023, Total Energies announced its acquisition with a stake in Ductor, a Finland-based start-up that had developed an innovative technology to process high-nitrogen organic waste, such as poultry manure, which was usually difficult to use for biomethane production.