The biogas industry is expected to possess high growth potential in the coming years, due to increase in industrial and commercial applications and a surge in agricultural sector and government support globally.

According to a new report published by Allied Market Research, the global biogas market size was valued at $59.0 billion in 2022 and is projected to reach $88.6 billion by 2032, growing at a CAGR of 4.2% from 2023 to 2032. The market growth is primarily driven by increasing demand for renewable energy, effective waste management solutions, and growing adoption of sustainable fuel alternatives across industrial and commercial sectors.

Key Findings

By source, the municipal waste segment held the largest share in 2022 and is projected to grow at a CAGR of 3.9% during the forecast period.

By end-use industry, the power generation segment accounted for the highest revenue share in 2022 and is expected to maintain its dominance.

Asia-Pacific led the biogas market in 2022, driven by supportive policies and increasing renewable energy investments.

Introduction: Role of Biogas in the Clean Energy Transition

Biogas is a renewable energy source generated through the anaerobic digestion of organic materials such as agricultural residues, animal waste, municipal waste, and food waste. It primarily consists of methane and carbon dioxide and can be used for electricity generation, heating, cooking, and transportation fuel. The utilization of biogas helps reduce dependence on traditional fossil fuels and biomass sources such as firewood and charcoal, thereby mitigating deforestation and indoor air pollution.

In addition, biogas production supports circular economy principles by converting organic waste into a valuable energy resource. With advancements in upgrading technologies, biogas can be refined into biomethane—a high-purity methane gas suitable for injection into natural gas grids or use as vehicle fuel. These advantages position the biogas market as a key contributor to global decarbonization and sustainable energy goals.

Market Dynamics

Growth Drivers: Industrial and Commercial Adoption

Industrial and commercial applications play a crucial role in driving the growth of the biogas market. Industries worldwide are increasingly shifting toward renewable energy sources to reduce greenhouse gas emissions and comply with stringent environmental regulations. Biogas is widely used in industrial heating, steam generation, and combined heat and power (CHP) systems, offering a cost-effective and environmentally friendly alternative to fossil fuels.

In the commercial sector, businesses such as hotels, restaurants, supermarkets, and food processing facilities are adopting biogas solutions to meet their energy needs while efficiently managing organic waste. On-site biogas production helps reduce waste disposal costs and enhances energy self-sufficiency. The integration of cogeneration systems further improves energy efficiency, making biogas an attractive option for commercial establishments.

Market Restraints: Competition from Conventional Energy Sources

Despite its advantages, the biogas market faces strong competition from conventional energy sources such as coal, oil, and natural gas. Fossil fuels continue to dominate the global energy mix due to their established infrastructure, widespread availability, and lower upfront costs. In many regions, government subsidies for fossil fuels further limit the competitiveness of biogas-based energy solutions.

High initial investment costs associated with anaerobic digesters, upgrading units, and storage systems pose additional challenges. Moreover, biogas production can be affected by feedstock availability and seasonal variations, leading to intermittent energy output. These factors may require additional investments in energy storage and backup systems, impacting overall project economics.

Opportunities: Technological Advancements and Innovation

Ongoing technological advancements present lucrative growth opportunities for the biogas market. Innovations in anaerobic digestion techniques—such as high-rate digestion and co-digestion—enable higher biogas yields and improved process efficiency. The development of advanced purification and upgrading technologies has made biomethane production more viable for grid injection and transportation applications.

Furthermore, the adoption of digital monitoring, automation, and smart control systems enhances operational efficiency and reduces downtime in biogas plants. Emerging biogas utilization technologies, including fuel cells and microturbines, offer alternative pathways for electricity generation with higher efficiency. The exploration of novel feedstocks, such as algae and industrial organic waste, further expands the scope of biogas deployment across multiple sectors.

Segments Overview

The global biogas market is segmented based on source, end-use industry, and region.

By Source, the market is categorized into municipal waste, animal waste, agricultural waste, and others. Among these, the municipal waste segment accounted for the largest market share in 2022, driven by increasing urbanization and growing emphasis on waste-to-energy solutions.

By End-Use Industry, the market is divided into electricity generation, cogeneration, and others. The power generation segment dominated the market in 2022, contributing more than one-third of the global biogas market revenue, and is expected to maintain its leadership during the forecast period.

By Region, the biogas market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. Asia-Pacific emerged as the leading region in 2022, supported by favorable government initiatives, rising energy demand, and increasing investments in renewable energy infrastructure.

Competitive Landscape

The global biogas market is moderately competitive, with the presence of several established and emerging players. Key companies operating in the market include Wärtsilä, EnviTec Biogas AG, Air Liquide USA, Hindustan Petroleum Corporation Limited, PlanET Biogas Group, BoxLNG Pvt. Ltd., Bharat Biogas Energy Ltd., Primove Engineering Pvt. Ltd., GAIL Gas Limited, and GPS Renewables Pvt. Ltd. Other notable participants include Praj Industries, SLPP RE, Green Elephant, and IOT.

Market players are focusing on strategic partnerships, technological innovation, and capacity expansion to strengthen their market presence and gain a competitive edge.

Conclusion

The global biogas market is set to experience steady growth over the coming decade, supported by rising demand for renewable energy, sustainable waste management solutions, and technological advancements. While competition from conventional energy sources remains a challenge, ongoing innovations and supportive government initiatives are expected to enhance the market's long-term growth potential. As industries and governments worldwide continue to prioritize decarbonization, biogas is poised to play a significant role in the global clean energy transition.