Biomethane Market Size & Overview:

The Biomethane Market Size was valued at USD 12.70 billion in 2024 and is expected to reach USD 34.32 billion by 2032 and grow at a CAGR of 13.23% over the forecast period 2025-2032.

Biomethane market analysis the increasing adoption of biomethane as an environment-friendly replacement for conventional fuel in the transportation sector. This movement is spurred on by the need to decarbonize mobility quicker and to move away from traditional fossil fuels. With “near-zero” carbon emissions when derived from organic waste, biomethane is a promising alternative for public transport fleets, heavy-duty trucks, and even marine use. Several countries are now incorporating biomethane in their national transportation agendas with subsidies and low-carbon fuel standards. In Europe, for example, several cities operate city buses on pure biomethane, as well as many logistics providers are converting commercial fleets to bio-CNG or bio-LNG. And this transition reduces greenhouse gases and encourages a circular economy by turning waste into fuel, which drives the biomethane market growth.

A biomethane market report shows that increased use of biomethane as a low-carbon alternative is emerging the case in the transportation space due to ongoing policy and investment support throughout the U.S. For instance, Clean Energy Fuels teamed up with Maas Energy Works in 2024 to build RNG (renewable natural gas) facilities at dairy farms in seven states housing a collective herd of 35,000 cows set to produce around 4 MM gallons of RNG annually for sale at Clean Energy’s CNG stations, financed at USD 130 MM and expected to be finished by 2026.

Biomethane Market Growth Drivers:

•   Increasing Adoption in the Transportation Sector Drives the Market Growth

The growing emphasis on reducing carbon emissions in the transport sector has significantly increased the demand for biomethane as an alternative fuel. Biomethane, also known as renewable natural gas (RNG), is compatible with existing CNG and LNG vehicle infrastructure, making it a cost-effective replacement for fossil fuels. Heavy-duty vehicles, public buses, and waste collection trucks are increasingly powered by RNG due to its low carbon intensity.

In 2024, Clean Energy Fuels Corp. and BP partnered to invest over $130 million in RNG production across dairy farms in the U.S., targeting transportation use—enough to replace nearly 15 million gallons of diesel annually.

Biomethane Market Restrain:

• High Infrastructure and Upgrading Costs, which May Hamper the Market Growth

Despite its environmental benefits, the growth of the biomethane market is hampered by the high capital and operational costs associated with its production and purification. Producing pipeline-quality biomethane involves advanced biogas upgrading technologies such as pressure swing adsorption, water scrubbing, or membrane separation, all of which require expensive equipment and ongoing maintenance. Moreover, the logistics of grid injection or setting up vehicle fueling stations involve permitting, safety compliance, and land use planning. Small- and medium-scale biogas producers often lack the financial backing to upgrade their operations to produce biomethane, slowing market penetration.

Biomethane Market Opportunities:

• Integration into Natural Gas Grids Create an Opportunity for the Market

The integration of biomethane into existing natural gas grids offers a transformative opportunity for large-scale decarbonization of heating, electricity, and industrial applications. By injecting biomethane into pipelines, energy providers can reduce the carbon footprint of distributed gas without needing to overhaul infrastructure. This approach allows biogas producers to monetize their gas at a national scale, tapping into broader energy markets and improving the economics of renewable gas projects. Countries with established pipeline infrastructure like the U.S., Germany, and the Netherlands are increasingly enabling RNG grid injection as part of national clean energy strategies which drive the biomethane market trends.

In 2023, Dominion Energy began injecting RNG into its pipelines in North Carolina and Utah, enough to serve around 40,000 homes annually, and announced further RNG expansion plans as part of its commitment to reach net-zero emissions by 2050.

Biomethane Market Segmentation Analysis:

By Feedstock

Agricultural Waste emerged as the dominant feedstock in the biomethane market in 2024, holding around 32% biomethane market share. It is due to the support of widespread farming activities and the availability of crop residues, husks, and livestock slurry. This feedstock benefits from established collection logistics and favorable government subsidies under rural energy schemes. It offers high biogas yield and is well-suited for co-digestion processes.

Energy Crops such as maize silage and grass are the fastest-growing feedstock type. Their predictable methane output and compatibility with anaerobic digestion make them highly attractive, especially in Europe, where long-term energy crop contracts are being encouraged to meet green fuel mandates.

By Production Method

Anaerobic Digestion leads the production method segment and held 42 % share in 2024. It is due to accounts for a significant market share due to its proven efficiency, lower operating costs, and ability to treat various organic waste types. It's widely used in both urban and rural installations for biogas production and is well supported by public funding in countries like Germany, France, and India.

Gasification is the fastest-growing production method. Although more capital-intensive, it can process a broader range of dry biomass like wood chips and municipal solid waste, making it ideal for regions with limited access to wet waste. Investments in advanced thermal conversion facilities, especially in Japan and the U.S., are accelerating their adoption.

By Application

The Automotive (Vehicle Fuel) segment dominates the market, driven by rising environmental regulations and the shift toward clean mobility solutions. Compressed biomethane (Bio-CNG or RNG) is increasingly used in public transport, taxis, and long-haul trucking in countries like Sweden, India, and the U.S. It helps reduce tailpipe emissions while offering cost parity with diesel.

Injection into Natural Gas Grid is the fastest-growing segment. It allows biomethane producers to monetize green gas by feeding it directly into utility pipelines, creating flexible and scalable use cases for heating, cooking, and industrial applications. In 2024, Europe added over 100 new biomethane injection sites, reflecting this trend.

By End-Use Industry

Transportation held the largest share in the biomethane market in 2024. Governments worldwide are supporting the use of renewable fuels in logistics and passenger transit through subsidies, GHG credits, and fuel tax relief. The biomethane-powered vehicle fleet grew steadily in the EU and U.S., supported by infrastructure expansion and fuel supply agreements.

 Utilities are the fastest-growing end-use sector. To meet carbon neutrality targets, many utilities are replacing fossil-derived natural gas with renewable biomethane. For example, SoCalGas in California committed to replacing 20% of its natural gas supply with RNG by 2030. This utility-scale adoption is reshaping demand dynamics in the biomethane market.

Biomethane Market Regional Outlook:

Europe held the Biomethane market share largest market share, around 47.32%, in 2024. It is driven by its strong automotive and industrial base, particularly in Germany, France, and Italy. The region's stringent regulations around sustainable and high-performance materials in tire and medical device manufacturing have accelerated the shift towards synthetic polyisoprene due to its superior purity and uniformity. Additionally, the growing emphasis on decarbonization in manufacturing and support for circular materials has led to increased investment in bio-based and synthetic rubber alternatives.

In 2024, Synthos (Poland) expanded its synthetic rubber capacity by commissioning a new polyisoprene production unit tailored to medical-grade applications, signalling Europe's firm positioning in this market.

The North America region is the fastest-growing market. It is owing to its vast tire manufacturing industry, strong demand from medical device manufacturers, and advanced R&D infrastructure. The region is also witnessing rising investments in electric vehicle (EV) components, which depend heavily on durable and high-performance elastomers like polyisoprene. Favorable regulatory conditions for domestic manufacturing and strategic investments from key players have supported regional growth.

In 2024, Goodyear Tire & Rubber Company invested in synthetic rubber R&D in Ohio to optimize tire performance, sustainability, and durability further boosting polyisoprene consumption.

 The U.S Biomethane market size was USD 2.2 billion in 2024 and is expected to reach USD 6.64 billion by 2032 and grow at a CAGR of 14.72% over the forecast period of 2025-2032. It is primarily driven by its mature automotive and healthcare infrastructure. The presence of major tire manufacturers, surgical glove producers, and innovations in wearable medical devices continues to support demand. Additionally, government incentives for reshoring industrial production and advanced polymer development have led to domestic supply chain strengthening. In a notable move in 2024, Kraton Corporation advanced its polyisoprene-based formulation technologies for medical tubing and adhesives, reinforcing the U.S.'s leadership in high-performance elastomer applications.

Asia Pacific holds a substantial share in the global biomethane market it is due to its rapidly expanding automotive production, booming healthcare sector, and rising disposable incomes. Countries like China, India, Japan, and South Korea are investing heavily in both tire manufacturing and disposable medical products, key end-users of polyisoprene. Moreover, a robust manufacturing ecosystem, low production costs, and supportive government initiatives for industrial growth are attracting global producers to set up regional bases. In 2024, JSR Corporation (Japan) announced capacity enhancement for high-cis polyisoprene at its Yokkaichi plant to cater to surging medical glove demand across the region.

Biomethane Market Companies are:

Major Biomethane companies are Engie, Air Liquide, Gasum, EnviTec Biogas AG, Future Biogas Ltd., Waga Energy, PlanET Biogas Group, Clean Energy Fuels Corp., Bright Biomethane, Xebec Adsorption Inc., Veolia, Greenlane Renewables, Archaea Energy, Hitachi Zosen Inova AG, Axiom Energy Group, Pentair, Verbio AG, TotalEnergies, Nature Energy, Biogest.

Recent Development:

• In April 2024, Repsol purchased 40% of shares in Genia Bioenergy and access to 19 raw biomethane producing plants in the pipeline with an aggregate capacity of 1.5TWh/year from agricultural and animal waste.

• In 2024, Air Liquide announced it has increased its biomethane production capacity by starting operations at new biomethane production facilities in Pennsylvania and Michigan in the U.S., in a move to strengthen its position in the North American renewable gas market.