Biomethane Market: Analysis By Production, By Technology, By Feedstock, By End-Use, By Region Size and Trends with Impact of COVID-19 and Forecast up to 2029

The global biomethane market was valued at US$3.66 billion in 2023. The market value is expected to reach US$5.63 billion by 2029. Biomethane is a renewable and sustainable form of energy. Derived from organic sources such as agricultural waste, food scraps, and animal manure, biomethane is a purified form of biogas, primarily composed of methane.

Market Segmentation Analysis:

By Technology: The report provides the bifurcation of the market into three segments based on the technology: Anaerobic Digestion, Thermal Gasification, and Others. The anaerobic digestion segment held the highest share of the market, whereas thermal gasification is expected to be the fastest-growing segment in the forecasted period. Anaerobic digestion (AD) has historically dominated the biomethane market due to its maturity, scalability, and compatibility with a wide range of organic feedstocks. As technological advancements continue to improve process efficiency, enhance gas yields, and reduce operational costs, the use of anaerobic digestion for biomethane production is poised for continued growth in the forthcoming years. On the other hand, thermal gasification technology has emerged as a promising approach for converting biomass and organic waste into biomethane and other valuable products such as syngas and biochar. Unlike anaerobic digestion, which relies on microbial decomposition, thermal gasification utilizes high temperatures and controlled oxygen levels to convert organic materials into a synthesis gas composed of hydrogen, carbon monoxide, and methane. While thermal gasification with biomethane synthesis is still in the pre-commercial phase, there is significant potential to scale up this technology in the mid to long term.

By Feedstock: The report further provides the segmentation based on the following feedstock: Municipal Solid Waste, Agriculture, Energy Crops, and Others. Municipal solid waste held the highest share of the market, whereas the agriculture segment is expected to be the fastest-growing segment in the forecasted period. The utilization of municipal solid waste (MSW) as a feedstock for biomethane production has been on the rise as the increasing global population and urbanization have led to a corresponding surge in waste generation, creating a significant abundance of organic materials suitable for biomethane production. Moreover, landfill diversion policies and regulations aimed at reducing methane emissions from waste decomposition have incentivized the adoption of waste-to-energy technologies such as anaerobic digestion for MSW treatment. On the other hand, as sustainable agriculture practices gain momentum, and policies incentivize renewable energy production from agricultural sources, the utilization of agricultural feedstock for biomethane is poised for significant growth in the forthcoming years.

By End-Use: The report provides the glimpse of the biomethane market based on the following end-use: Transport Fuel, Power Generation, and Others. Transport fuel held the highest share of the market and is expected to be the fastest-growing segment in the forecasted period. In the transportation sector, biomethane can be utilized as a direct substitute for compressed natural gas (CNG) or liquefied natural gas (LNG) in vehicles. Its use helps to significantly lower carbon dioxide emissions and other pollutants compared to conventional gasoline or diesel. In the past few years, the European transportation sector has also seen a strong increase in demand for biomethane supported by the numerous bio-LNG plants in operation and under construction. To continue this momentum and achieve rapid decarbonization policymakers in Europe would need to adopt a neutral-technology approach.

By Region: The report provides insight into the biomethane market value and market production based on the regions: Europe, North America, Asia Pacific, and the Rest of the World. Europe held the major share of the market both in terms of market value and market production. European biomethane production has been further analyzed based on feedstock (Agriculture Residues, Energy Crops, Organic Waste, and Others), end-use (Building, Transport, Power, Industry, and Others), and regions (Germany, France, UK, Denmark, and Rest of Europe). Currently, the EU produces enough biomethane to satisfy approximately 2% of its total natural gas consumption. However, the REPowerEU plan aims to increase this share to 20% by 2030, necessitating a substantial increase in production to over 350 TWh annually. Capacity expansion efforts are already underway, with Europe boasting 1,322 biomethane-producing facilities as of April 2023. Countries like Denmark, Germany, France, the UK, the Netherlands, and Italy are leading the charge in biomethane production, driven by supportive government initiatives and ambitious renewable energy targets.

The expansion of the US biomethane sector is supported by legislative measures such as the Inflation Reduction Act (IRA), which provides fiscal support to biogas for all end-uses and extends credits for alternative fuels in transportation. Additionally, demand for biomethane from non-transportation sectors is expected to drive significant growth, with natural gas utilities and large natural gas users purchasing RNG to decarbonize their supplies and comply with environmental, social, and governance (ESG) commitments. The US’s biomethane market production has been further analyzed based on feedstock (Municipal Solid Waste, Agriculture Waste, Food Waste & Waste Water) and end-use (Transport Fuel and Power Generation).

China is the major producer of biomethane in the Asia-Pacific region and has the potential to grow further in the coming years. China has adopted its 14th Five-Year-Plan (FYP) on renewable energy, which includes high targets for renewables, including RNG, given its dual carbon strategic goals. Combined with the rural revitalization strategy and the strong focus of China’s policy on energy security, the still undeveloped RNG sector is expected to register an accelerated development during the 14th FYP period (2021-2025). The growth would be facilitated by improvement in policy support, better grid access to the network, and the participation of big players in the sector.

The Indian biomethane market production has also been analyzed based on the following feedstocks (Agricultural Waste, Pressmud, Municipal Solid Waste, Animal Waste, and Others).

Market Dynamics:

Growth Drivers: The global biomethane market has been growing over the past few years, due to factors such as growing greenhouse gas emissions, increasing development of biomethane plants, increasing number of bio-LNG plants, growing electricity generation through renewable energy sources, growing establishment of biomethane refueling station, strengthening power generation infrastructure, government initiatives and key supportive policies, and many other factors. Bio-LNG (liquefied natural gas) plants are specialized facilities that produce LNG from biomethane, enabling its use as a transport fuel and providing a sustainable alternative to conventional diesel and petrol. The development of bio-LNG plants expands the market potential for biomethane by opening up new avenues for its utilization in heavy-duty transportation, marine, and off-grid energy applications. By converting biomethane into LNG, bio-LNG plants enable efficient storage, transportation, and distribution of renewable energy, overcoming logistical challenges associated with biomethane's gaseous form, driving its growth and widespread adoption in the renewable energy landscape.

Challenges: However, the market growth would be negatively impacted by various challenges such as technological complexity, lack of public awareness, financial viability concerns, etc. The capital-intensive nature of biomethane production, coupled with uncertainties surrounding revenue streams and investment returns, significantly influences market dynamics.

Trends: The market is projected to grow at a fast pace during the forecast period, due to various latest trends such as hydrothermal gasification, guarantees of origin (GoO) certificates, enhanced reactor configurations and process optimization, increasing awareness of circular economy, growing international trade and cooperation, integration with renewable energy systems, etc. Guarantees of Origin (GoO) certificates play a crucial role in boosting the biomethane market growth by providing transparency and credibility to biomethane producers and consumers. These certificates certify the origin and sustainability of biomethane production, enhancing market confidence and facilitating trade across borders. As demand for renewable energy sources rises, GoO certificates offer assurance of environmental integrity and compliance with renewable energy targets, driving investment and market expansion in the biomethane sector.

Impact Analysis of COVID-19 and Way Forward:

While the COVID-19 pandemic initially posed challenges to the global biomethane market, including disruptions in production and reduced consumption, the market's long-term trajectory remains positive. Looking ahead, as economies rebound and prioritize green recovery strategies, biomethane is well-positioned to emerge as a key player in the transition towards a more sustainable and resilient energy landscape. The market is poised to capitalize on the momentum generated by the pandemic's emphasis on sustainability and resilience, with demand expected to rise across sectors such as transportation, power generation, and industrial applications.

Competitive Landscape:

The global biomethane industry is fragmented. The key players in the global biomethane market are:

• Veolia Group
• EnviTec Biogas AG
• ENGIE
• E.ON SE (E.ON Bioerdgas GmbH)
• Verbio SE
• Greenlane Renewables Inc.
• Landwärme GmbH
• PlanET Biogas Group
• The AB Group
• Future Biogas Limited
• Bioenergy Devco
• Renergon International AG

In the competitive landscape of the biomethane market, players are adopting various strategies to expand their market share and gain a competitive edge. For instance, on April 25, 2024, TotalEnergies and Vanguard Renewables signed an agreement to create an equally owned joint venture to develop, build and operate Farm Powered® renewable natural gas (RNG) projects in the US. TotalEnergies and Vanguard Renewables would advance 10 RNG projects into construction over the next 12 months, with a total annual RNG capacity of 0.8 TWh (2.5 Bcf). On the other hand, on April 25, 2024, Brimex Energy, a joint venture between Mexico-based Grupo Serrano and England-based Farmergy, obtained the first permit in Mexico for the production of biomethane. The permit authorizes the production and storage of biomethane.