The global biogas market size was valued at USD 71.3 billion in 2025 and is projected to grow from USD 74.43 billion in 2026 to USD 104.87 billion by 2034 at a CAGR of 4.38% during the forecast period 2026-2034.
Biogas is a combination of several gases, predominantly methane, carbon dioxide, and hydrogen sulfide, used for power generation. It is made from waste products such as food waste, animal manure, municipal trash, plant material, and sewage and is an environment-friendly, renewable energy source. The transition from coal-based energy sources to cleaner energy sources is anticipated to enhance the demand for biogas for electricity generation throughout the projected period. In addition, growing awareness of greenhouse emissions in the transportation sector and the rising need to reduce dependency on fossil fuels will increase the demand for biogas as vehicle fuel.
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The greenhouse gas emissions from various energy-intensive industries, including transportation, buildings, energy, agriculture, and others, have been increasing over the past decade, leading to a change in the climate pattern. These factors also lead to the threat of global temperatures and disrupt human and environmental activities. Various initiatives to offset these emissions include shifting to alternative energy sources and increasing energy efficiency.
Additionally, various steps to reduce emissions include carbon sequestration, technology transfer from developed to developing countries, and alternate fuels. Switching to biogas as a vehicle fuel can cut greenhouse gas emissions in the transportation sector by 60% to 80% compared to fossil-based fuels like gasoline and diesel. Most countries have set goals to reduce emissions in response to climate change and growing environmental concerns. Significant investments have been made in alternative fuels and renewable energy, and this trend is anticipated to continue in the upcoming years. The growing preference for environmentally friendly energy that minimizes emissions is expected to increase the demand for biogas.
The global biogas market is expected to grow owing to the increasing application scope of biogas in various application sectors. Factors such as reduced household air pollution and associated diseases, low annual cost, and locally available feedstock such as agricultural residues or from animal or human waste are increasing the demand for biogas in cooking gas applications. In addition, benefits such as reduced cooking time, improved indoor air quality compared to traditional cooking stoves, and reduced waste volume propel the demand for cooking gas application. Biogas is also gaining popularity in electricity generation.
Electricity generated by biogas is used for barns or houses and can be sold to the electric grid. This helps to reduce the dependency on utilities. Increasing the use of biogas in applications such as heat, electricity, and vehicle fuel is further expected to boost the market growth. Increasing public awareness about renewable energy sources encourages consumers to move towards alternate energy sources from fossil fuels. Government initiatives, such as subsidies for producing or using renewable energy, are predicted to encourage power producers to switch to clean energy sources, spurring the market's expansion.
The high initial investment to establish a biogas plant is expected to restrain the biogas industry growth. Biogas plant construction costs land, materials, equipment, and labor, and the process of procuring and storing raw materials is costly and time-consuming. Regulation and financial assistance are required for sorting, collecting, processing, supplying, and distributing the feedstock; construction and operation of the plant; and sale and distribution of Biogas.
The plant's output must be sufficient and consistent to cover the installation and operating costs. In addition, like other renewable energy sources, i.e., wind and solar, weather affects biogas production. In addition, the optimal temperature bacteria require to digest the waste is around 37°C. In a cold climate, say below 20°C, biodigesters need heat energy to maintain a constant biogas supply, which may further increase the cost.
The rising need to reduce dependency on fossil fuel is anticipated to create an opportunity for biogas in vehicle fuel application over the forecast period. Government support to upsurge production and consumption through various initiatives such as financial assistance and tax incentives is expected to be a significant factor in boosting demand for biogas in vehicle fuel applications.
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Based on source type, the global market of biogas can be divided into agriculture, industrial, and municipal. The agriculture segment is the highest contributor to the market and is anticipated to grow at a CAGR of 4.6% during the forecast period. Agriculture is one of the primary sources of biogas production. The waste material such as livestock manure slurry, agriculture waste, and food and abattoir wastes generated from dairy, poultry, swine farms, and agriculture farms are used as feedstocks to produce biogas. These feedstocks are held and ensiled in clamps or hoppers before being fed into the digester to be converted into sustainable power for various applications, including electricity, heat, car fuel, and culinary gas.
The industrial segment is anticipated to experience rapid growth. The requirement for wastewater treatment in the industrial sector is expected to increase along with growing interest in developing practical ways to produce bio-products and biofuel from industrial food waste. Additionally, the food and beverage industries are now focusing on properly managing food waste to achieve zero waste. Companies like Nestlé S.A., PepsiCo, Inc., and Unilever plc have started executing food waste to biogas production to generate power for manufacturing units. These trends and supportive government policies will likely propel market growth in the coming years.
In municipal source types, solid waste such as food waste, glass, yard trimmings, non-recyclable paper, woody waste materials, rags, and sludge from wastewater are widely used as feedstock for the production of biogas. The growing usage of municipal solid waste in biogas production to reduce landfills and greenhouse emissions is expected to support the market demand over the forecast period.
The electricity segment owns the highest biogas market share and is expected to grow at a CAGR of 3.8% over the forecast period. The use of biogas for electricity generation has increased due to the increased focus on the use of renewable energy, notably in the electric power sector. Moreover, the shift in various countries towards gas-based power plants from coal-based power plants due to an increase in carbon emissions is expected to fuel the demand for biogas for electricity generation over the forecast period.
The vehicle fuel application segment is the second most dominating and is anticipated to develop significantly during the coming years. The growing awareness of greenhouse emissions in the transportation sector, coupled with various stringent regulations laid by the government, is driving the demand for biogas in vehicle fuel applications. Transportation accounts for 30% of global energy use, and switching to biogas as an alternative vehicle fuel can help reduce greenhouse gas emissions between 60% and 80% in the transport sector compared to fossil fuels like diesel and gasoline.
Therefore, countries such as Sweden, Germany, the U.K., Switzerland, and the U.S. have been promoting the usage of biogas-driven trucks, cars, and buses by combining investment subsidies, tax exemptions, and incentives for biogas injection into the natural gas grid. These factors are expected to fuel the market demand in the coming years.
Biogas is widely used for heating purposes in the industrial and domestic sectors. The biogas production through the anaerobic decomposition process of organic material is used to generate heat via combined heat and power gas engine (CHP). In contrast to conventional electrical generators and on-site boilers, heat is recovered using heat exchangers built into the cooling and exhaust systems of CHP engines during the combustion process of organic materials. This helps to reduce energy expenditures as well as pollution.
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Europe's market of biogas is expected to grow at a CAGR of 2.7% over the forecast period. Numerous countries, such as Austria, Germany, and Denmark, have a robust legal structure for renewable energy sources. Due to technological advancements and rising expenditures in the region's refinery industry, the market of biogas in Europe is expanding. Companies around Europe are investing a significant amount of money in research and development of biogas production from existing sources and have plans to raise the share of feedstock over the following years, which will support the market growth of biogas in the region. The government and different European organizations are initiating projects to promote and encourage the use of biogas actively.
Moreover, the high rate of depletion of fossil fuels in the region creates plenty of growth prospects for the global market. European Union has set a target to utilize more renewable energy as compared to fossil fuels. The government's focus on decreasing carbon emissions also presents growth opportunities for the European market.
Asia-Pacific is expected to grow at a CAGR of 6.1%, generating USD 15,343 million during the forecast period. The Asia-Pacific market for biogas is still in its initial development phase. The primary reasons for the region's high growth include increased demand for biogas and growing investments by both public and private. The solid waste generated yearly across the globe is over 2 billion tonnes, and around 40% of solid waste is generated from Pacific and Southeast Asian countries.
Hence, the region can produce biogas and resolve the issues related to waste management and climatic changes. In addition, the Asia-Pacific market is expanding due to the region's high energy consumption and stringent environmental laws. Increasing investments from the public and private sectors in China for the production of biogas are driving the development of the market.
The U.S primarily drives the demand for biogas in North America. The growing demand for the product in applications such as cooking gas, electricity, vehicle fuel, heat, and others is expected to positively impact the industry growth over the forecast period. Adoption and innovation of new technologies to propel the production of raw materials used to generate biogas in the U.S. are expected to boost the overall growth of the global market in the region. Major factors supporting the growth include high demand for green fuels, stringent environmental regulations, and increased investment in the development of refineries. Manufacturers of biogas are adopting strategies, such as mergers and acquisitions, to increase their market share and regional production capacity.
The demand for biogas in the Central and South America region is primarily driven by Brazil, which accounts for the highest share in feedstock production among the Central and South American countries. The region's market's considerable growth is increasing government initiatives toward energy security and energy independence.
Moreover, the high dependence on depleting fossil fuels has compelled the region's different governments to look for alternatives. The rise in environmental concerns is expected to drive the biogas market's demand across the Middle East and Africa. Favorable regulatory policies and rising government investments will further boost the adoption of biogas across the region.
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Author's Details
Research Analyst
Akanksha Yaduvanshi is a Research Analyst with over 4 years of experience in the Energy and Power industry. She focuses on market assessment, technology trends, and competitive benchmarking to support clients in adapting to an evolving energy landscape. Akanksha’s keen analytical skills and sector expertise help organizations identify opportunities in renewable energy, grid modernization, and power infrastructure investments.
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