Biomethane Market Expected to Reach $5.5 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Biomethane Market," The biomethane market was valued at $3.1 billion in 2022, and is estimated to reach $5.5 billion by 2032, growing at a CAGR of 5.7% from 2023 to 2032.

Biomethane, known as renewable natural gas (RNG), is a form of energy derived from organic materials such as agricultural waste, landfill gas, and wastewater. It is produced through a process called anaerobic digestion, where organic matter is broken down by bacteria in the absence of oxygen.

Biomethane is considered a renewable energy source as it is produced from organic waste materials that would otherwise decompose and release methane into the atmosphere. Biomethane production helps reduce greenhouse gas emissions and dependence on fossil fuels by capturing and utilizing this methane. Biomethane has a significantly lower carbon footprint compared to traditional fossil fuels. It results in substantial emissions reductions when used as a substitute for natural gas or diesel.

The combustion of biomethane releases carbon dioxide (CO2), but since the feedstock absorbs CO2 during its growth, the overall emission is balanced. Production provides a sustainable solution for managing organic waste materials such as agricultural residues, food waste, and wastewater. Biomethane is anticipated to be generated while simultaneously reducing the environmental impacts associated with waste disposal in landfills or open decomposition by diverting these waste streams to anaerobic digesters. 

It is projected to be injected into the natural gas grid, replacing fossil natural gas, or used as a fuel for heating, cooking, electricity generation, or as a transportation fuel for vehicles. The compatibility of biomethane with existing natural gas infrastructure makes it an attractive option for utilizing renewable energy in existing systems.

The global biomethane market size is studied on the basis of feedstock, production method, application, and region. Depending on the feedstock, the market is segregated into organic household, waste derives, animal manure, energy crops, agricultural waste, and sewage sludge. The energy crops segment dominated the biomethane market share for 2022 and is expected to maintain its dominance throughout the forecast period. Organic household waste can serve as a valuable feedstock for biomethane production.

Biomethane can be produced through the anaerobic digestion of organic waste materials, such as food scraps, yard trimmings, and other biodegradable materials generated from households. Households are expected to contribute to reducing greenhouse gas emissions and promote sustainable waste management practices by collecting and diverting organic waste from landfills.

Organic waste is expected to be utilized to produce biomethane instead of decomposing and releasing methane, which is a potent greenhouse gas. It is first processed in anaerobic digesters, where microorganisms break down the waste in the absence of oxygen, producing biogas. Biogas primarily consists of methane and carbon dioxide. The biogas is then purified through a gas upgrading process to remove impurities such as carbon dioxide, resulting in high-quality biomethane.

By production method, the biomethane market is categorized into anaerobic digestion, gasification, and fermentation. The anaerobic digestion segment dominated the market share for 2022 and will continue its dominance throughout the biomethane market forecast period. In the gasification process, biomass or other carbonaceous materials are heated in a controlled environment with a restricted oxygen supply (partial oxidation) or in the absence of oxygen (complete oxidation). This leads to the conversion of biomass into a mixture of gases, primarily carbon monoxide (CO) and hydrogen (H2), along with other gases such as carbon dioxide (CO2) and methane (CH4).

The syngas produced from gasification typically contains impurities, such as tars, sulfur compounds, and particulate matter. The cleaned syngas is then fed into a methanation reactor, where a catalyst facilitates the conversion of carbon monoxide and hydrogen into methane. This methanation process increases the methane content of the gas and produces biomethane, which primarily consists of methane (CH4).

By application, it is fragmented into power generation, automotive, and others. The automotive segment garnered the highest share of the market and is projected to pave the way for biomethane market opportunities. Biomethane is anticipated to be utilized for power generation in several ways, offering a renewable and sustainable energy option. Biomethane is projected to be used in combined heat and power systems, known as cogeneration systems. In such systems, the biomethane is burned in a gas engine or turbine to generate both electricity and heat simultaneously. The electricity is expected to be utilized on-site or fed into the grid, while the generated heat is anticipated to be used for space heating, water heating, or other industrial processes.

CHP systems maximize overall energy efficiency by utilizing thermal energy that would otherwise be wasted in conventional power generation. Moreover, biomethane is expected to be used as a fuel in gas turbines specifically designed to operate on gaseous fuels. Gas turbines are combustion-based power generation systems that utilize the high-temperature gases produced by burning biomethane to drive a turbine and generate electricity. Gas turbines are commonly used in large-scale power plants and are anticipated to provide high-efficiency electricity generation.

Region-wise, biomethane market analysis is done across North America, Europe, Asia-Pacific, and LAMEA. The Asia-Pacific region dominated the market share for 2022. It is attributed to the rise in the adoption of compressed biogas which is the recent biomethane market trend.

The key players operating in the biomethane industry are EnviTec Biogas AG, VERBIO Vereinigte BioEnergie AG, Ecofinity, Future Biogas Ltd., Gazasia Ltd., Orbital Gas Systems, PlanET Biogas Global GmbH, CNG Services Ltd., ETW Energietechnik GmbH, and AB HOLDING SpA. These players have adopted various strategies to gain a higher share and retain leading positions in the market. They have adopted carbon capture, storage, and utilization methods to reduce their carbon footprint. They have further invested in R&D activities for advancing present technologies of power generation through coal.

Key Fndings Of The Study:

• Energy crops is projected to grow at the highest CAGR of approximately 6.0%, in terms of during the biomethane market forecast period.
• The anaerobic digestion dominated the market at the highest CAGR of approximately 5.8%, during the biomethane market forecast period.
• Region-wise, Asia-Pacific dominated the biomethane market and is expected to grow at a high CAGR during the forecast period.