Biomethane Market (By Source: Energy Crops, Animal Manure, Municipal Waste, Waste Water Sludge; By End Use: Construction, Industrial) - Global Industry Analysis, Size, Share, Growth, Trends, Revenue, Regional Outlook and Forecast 2024-2033

Biomethane Market Size and Trends

The global biomethane market size was estimated at around USD 7.12 billion in 2023 and it is projected to hit around USD 25.1 billion by 2033, growing at a CAGR of 13.43% from 2024 to 2033.

Key Pointers

• Europe led the market with the largest market share of 46% in 2023.
• The North America estimated to expand the fastest CAGR of 13.53% from 2024 to 2033.
• By End Use, the construction sector generated the maximum market share of 44% in 2023.
• By Source, the municipal waste captured the maximum market share of 39% in 2023.

Biomethane Market Overview

The biomethane market is rapidly gaining traction globally as a sustainable and renewable energy source. Biomethane, a high-quality gas derived from biogas, is primarily composed of methane and is considered a viable alternative to natural gas. It can be produced through anaerobic digestion of organic matter or via gasification of biomass followed by methanation. The increasing focus on reducing greenhouse gas emissions and transitioning to cleaner energy sources has significantly driven the demand for biomethane.

Biomethane Market Growth Factors

The growth of the biomethane market is significantly driven by an increasing global focus on reducing greenhouse gas emissions and combating climate change has led to greater adoption of renewable energy sources, with biomethane emerging as a viable alternative to fossil fuels. Secondly, supportive government policies and incentives, such as subsidies for renewable energy projects and carbon credits, are encouraging investments in biomethane production. Additionally, advancements in biogas upgrading technologies have enhanced the efficiency and cost-effectiveness of converting biogas into high-quality biomethane. The growing awareness of waste management benefits, as biomethane production utilizes organic waste, also contributes to its market expansion.

What are the Trends in Biomethane Market?

• Increasing Adoption in Transportation: There is a growing trend of using biomethane as a transportation fuel, especially in heavy-duty vehicles and public transport systems, due to its lower carbon footprint compared to traditional fuels.
• Government Policies and Incentives: Numerous governments worldwide are implementing supportive policies, such as subsidies, tax incentives, and carbon credits, to promote the production and use of biomethane, driving market growth.
• Integration into Natural Gas Grids: There is a rising trend of injecting biomethane into existing natural gas grids, facilitating its widespread use for residential heating, industrial processes, and power generation.
• Circular Economy Initiatives: Biomethane production aligns with circular economy principles by converting organic waste into a valuable energy resource, reducing landfill use, and promoting sustainable waste management practices.

What are the Key Challenges Faced by Biomethane Market?

• High Production Costs: The initial capital investment required for setting up biomethane production facilities and the costs associated with upgrading biogas to biomethane can be significant, posing a financial challenge for producers.
• Infrastructure Limitations: Existing natural gas infrastructure needs modifications to accommodate biomethane, and the lack of adequate infrastructure for distribution and storage can hinder market growth.
• Regulatory Barriers: Inconsistent regulatory frameworks and lack of standardized policies across regions can create uncertainties and barriers for biomethane producers and investors.
• Feedstock Availability: Ensuring a consistent and sustainable supply of organic feedstock for biomethane production can be challenging, particularly in regions with limited agricultural or organic waste.
• Competition with Fossil Fuels: Despite its environmental benefits, biomethane still faces competition from cheaper fossil fuels, which can limit its adoption, especially in price-sensitive markets.

What is the Contribution of Europe to Biomethane Market?

Europe dominated the global market, accounting for over 46% of the total revenue. This growth is expected to continue from 2024 to 2033 due to the increasing sources of biomethane and the focus on alternative and renewable energy sources. European universities and research institutes are receiving grants and funding from the European Commission for cutting-edge research to reduce technology costs.

The North America biomethane market is projected to witness a CAGR of 13.53% from 2024 to 2033, driven by the renewable energy transition and the trend of using green materials in industries, particularly in the U.S.

The U.S. biomethane market dominated in 2023, with about USD 1.8 billion in capital investment for biogas projects, including methane capture systems for biomethane production. The market is driven by the increased use of recyclable construction infrastructure and the need to reduce carbon emissions.

According to the World Biogas Association, the Asia Pacific region has significant potential to enhance biogas generation and subsequently increase biomethane demand. This aligns with its waste management policies and efforts to combat climate change.

End Use Insights

In 2023, the construction sector accounted for the highest revenue share, exceeding 44%. According to the IEA, bioenergy constituted around 10% of the global primary energy demand, with a significant portion used as biogas, notably biomethane. In construction, biomethane is utilized for cooking and heating, and a large amount is integrated into the gas network as a transport fuel.

Industries such as food, drink, and chemicals generate byproducts rich in organic content, ideal for biomethane production. The demand for biomethane in these sectors is expected to rise due to its role in reducing greenhouse gas emissions and promoting sustainable production methods.

Source Insights

In 2023, municipal waste accounted for the highest revenue share, approximately 39%. This includes organic waste from food, green waste, paper, wood, and cardboard not used for composting or recycling, as well as waste from food processing industries. Biogas, primarily composed of methane, is produced through anaerobic digestion and converted into biomethane after processing. Significant growth in the biogas industry is anticipated to boost market growth. For example, Maruti Suzuki India Ltd. installed a pilot plant for biogas generation and purification at its Manesar Plant in Haryana, India, in June 2024.

Animal manure is another valuable segment in the market. Biogas production from livestock farming manure positively impacts both the economy and the environment. According to the European Biogas Association, the agricultural sector (including manure, sequential crops, and other residues) contributed 64% to European biomethane production in 2023.

Who are the Top Manufactures in Biomethane Market?

• Air Liquide
• Engie
• Nature Energy Biogas A/S
• Gasum
• Terega Solutions
• Waga Energy
• TotalEnergies
• Chevron
• Kinder Morgan
• Archea Energy
• Envitec Biogas AG
• Future Biogas Ltd.
• E.ON SE
• Verbio Vereinigte Bioenergie AG
• South Hills RNG

Recent Developments

• In April 2024, France-based Air Liquide announced the expansion of its biomethane production capacity in the U.S. by constructing two new plants in Pennsylvania and Michigan. These plants will serve the industrial and transport sectors in the region.
• In January 2023, France-based Arkema signed a long-term agreement with France-based ENGIE for the supply of 300 GWh/year of biomethane. This deal is one of the largest agreements in the European biomethane market and aims to help Arkema reduce its carbon footprint in the chemical industry.

Biomethane Market Segmentation:

By Source

• Energy Crops
• Animal Manure
• Municipal Waste
• Waste Water Sludge
• Others

By End Use

• Construction
• Industrial
• Power Generation
• Transport
• Others

By Region

• North America
• Europe
• Asia Pacific
• Central & South America
• Middle East & Africa