Biogas Market Size, Share & Trends Analysis Report By Source (Municipal, Agricultural, Industrial), By Application (Vehicle Fuel, Electricity, Heat, Upgraded Biogas, Cooking Gas), By Region, And Segment Forecasts, 2024 - 2030

Biogas Market Growth & Trends

The global biogas market size was estimated at USD 65.53 billion in 2023 and is projected to expand at a compound annual growth rate (CAGR) of 4.2% from 2024 to 2030. The industry is expected to witness growth due to increasing product demand from various application segments, including heat, electricity, upgraded biogas, vehicle fuel, and cooking gas. Moreover, a shift in focus toward the use of renewable energy, particularly in the electric power sector, has significantly driven biogas demand in electricity applications. Also, the rising need to reduce dependency on fossil fuels is creating lucrative opportunities for biogas in vehicle fuel applications.

The U.S. emerged as one of the largest markets for biogas in North America in 2023 and is anticipated to expand at a substantial CAGR, based on revenue, over the projection period. The country's government has introduced a number of regulations to reduce its dependency on conventional fuels and meet its zero carbon emissions target. Significant factors that influence market growth such as favorable regulatory & political support, environmental support, and customer support, geopolitical support, agricultural and economic support.

Biogas demand in North America is primarily driven by the U.S. Growing demand in applications, such as cooking gas, electricity, vehicle fuel, heat, and others, is expected to have a positive impact on industry growth over the forecast period. Major factors supporting the regional market include high demand for green fuels, stringent environmental regulations, and increased investment for the development of refineries.

The abrupt onset of the COVID-19 pandemic caused an industrial lockdown that brought all manufacturing activity to a grinding halt in most industries around the world. Hence, it has also impacted product demand in heat generation applications. Sluggish industrial activities have reduced demand for heat consumption, thereby negatively affecting demand for biogas.

Market Dynamics

As per the International Renewable Energy Agency (IRENA), transitioning to biogas for use as vehicle fuel can lead to reductions in greenhouse gas emissions by 60-80%, when compared to fossil fuels. Owing to the issue of climate change and rising environmental concerns, a majority of governments have set targets to cut down their emissions. Thus, there have been significant investments in renewable energy and alternative fuels, with the trend expected to continue in the near future. For example, in February 2021, Clean Energy Fuels Corp. signed a deal with the Los Angeles County Metropolitan Transportation Authority (Metro) for around 47.5 million gallons of its renewable natural gas (RNG) to fuel the largest transit bus fleet in the country. The agreement would mark the completion of Metro’s 5-year goal to shift its diesel fleet to cleaner, low-carbon fuel, with 2,400 buses powered by RNG. Thus, an increasing inclination toward environment-friendly products to reduce emissions is expected to fuel demand for biogas over the forecast period.

However, the high initial investment required to establish a biogas plant is expected to restrain market growth. The cost of biogas plant construction comprises land, materials, equipment, and labor. Financial aid is needed for developing and expanding biogas facilities. The process to procure and store raw materials is time-consuming and expensive. Regulation and financial assistance are required for collecting, sorting, processing, supplying, and distributing feedstock; plant construction & operation; and biogas sale & distribution. Output of the plant needs to be sufficient and consistent to cover the installation and operating costs.

Application Insights

The electricity application segment led the market and accounted for around 30% of the revenue share in 2023. Growing attention to renewable energy uses, particularly in the electric power sector, has significantly increased the use of biogas for electricity generation.

In 2022, approximately 220 million kWh of electricity was generated using biogas (from 24 livestock and dairy operations) and from industrial and sewage wastewater treatment facilities approx. 1 billion kWh of electricity was produced in the U.S. Biogas qualifies as a renewable energy fuel in the country, to generate electricity as per the state renewable electricity standards (RES).

The upgrade biogas segment is expected to expand substantially over the forecast period, aided by the rising biofuel demand in various end-use sectors, including automotive. Upgrade biogas is the result of converting biogas into biomethane by removing hydrogen sulfide, water, carbon dioxide, and contaminants from biogas.

Source Insights

Municipal sources accounted for the largest revenue share of 41.35% in 2023. Growing usage of this municipal solid waste (MSW) in biogas production for reducing landfills and greenhouse emissions is expected to support market demand over the forecast period.

The industrial segment is expected to witness significant growth over the estimated period. A growing interest in finding effective means to obtain bio-products and biofuel from industrial food waste coupled with an increasing need for wastewater treatment in the industrial sector is expected to fuel market demand over the forecast period.

Regional Insights

Europe was the dominant regional segment and accounted for about 41% of revenue share in 2023. The European biogas sector is growing owing to technological developments and increasing investments in the refinery industry. Companies across Europe are investing huge capital in research and development of biogas production from existing sources and planning to increase their share of feedstock over the next few years. This will fuel regional market growth.

Italy's biogas market growth is driven by government efforts to move toward decarbonization. For instance, in March 2021, Eni SpA (BIT: ENI) agreed to buy an Italian biogas company from FRI-EL Greenpower, a Gostner family holding, through its circular economy subsidiary, ‘Ecofuel’. This acquisition, however, is yet to be approved by relevant antitrust authorities.

Key Companies & Market Share Insights

Biogas industry is highly competitive due to the global presence of major companies. Key biogas solutions & service providers include Air Liquide, PlanET Biogas, Wartsila, EnviTech Biogas AG, Robert Bosch GmbH, Asia Biogas, and Schmack Biogas GmbH. Air Liquide, PlanET Biogas, Wartsila, and EnviTech Biogas AG are full-scale manufacturers and leaders in terms of investment in R&D.

Spanish companies are taking active steps to drive the adoption of biogas in the country. For instance, Repsol, a Spanish fuel company, in June 2020, announced the development of an industrial-scale biogas project.

Biogas Market Report Scope

Global Biogas Market Report Segmentation

This report forecasts revenue growth at global, regional & country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this report, Grand View Research has segmented the global biogas market report based on source, application, and region:

• Source Outlook (Revenue, USD Million, 2018 - 2030)

  • Municipal

    • Landfill

    • Wastewater

  • Industrial

    • Food Scrap

    • Wastewater

  • Agricultural

    • Dairy

    • Poultry

    • Swine Farm

    • Agricultural Residue

• Application Outlook (Revenue, USD Million, 2018 - 2030)

  • Vehicle Fuel

  • Electricity

  • Heat

  • Upgraded Biogas

  • Cooking Gas

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • Italy

    • France

    • Russia

    • U.K.

    • Spain

    • Switzerland

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

  • Central & South America

    • Brazil

    • Argentina

  • Middle East & Africa

    • UAE

    • South Africa