Europe Biomethane Market to Reach USD 6.1 Billion by 2035, Growing at 7.0% CAGR | Transparency Market Research

The Europe biomethane market, valued at US$ 2.9 billion in 2024, is projected to grow at a compound annual growth rate (CAGR) of 7.0% from 2025 to 2035, reaching an estimated US$ 6.1 billion by the end of 2035, according to the latest market analysis report. The growth is underpinned by favorable European Union (EU) energy directives, strong government incentives, and growing demand for renewable energy to achieve the region's net-zero carbon targets.

Biomethane, a renewable and sustainable substitute for natural gas, is emerging as a key enabler in Europe's transition to a circular and low-carbon economy. Produced through the upgrading of biogas obtained from organic wastes, agricultural residues, and sewage sludge, biomethane offers a clean energy solution that supports both decarbonization and waste reduction objectives.

As nations across Europe accelerate their climate commitments, biomethane has become central to energy diversification strategies, particularly in transport, industrial heating, and power generation. The market's strong upward trajectory reflects policy-driven momentum, technological innovation, and strategic collaborations among key players.

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Market Overview: The Europe biomethane market is witnessing robust expansion as governments, utilities, and industrial users adopt renewable gas solutions to cut emissions and reduce fossil fuel dependency. The region's policy landscape, shaped by the EU Green Deal, Renewable Energy Directive (RED II and III), and the Fit for 55 initiative, has established binding renewable energy and emissions reduction targets.

Biomethane is now used across multiple applications including:
• Electricity production
• Residential and commercial heating
• Industrial energy supply
• Transportation fuel
• Injection into the natural gas grid
The ability of biomethane to integrate seamlessly with existing gas infrastructure provides a scalable pathway to decarbonization while maintaining energy security and economic feasibility.

Key Drivers of Market Growth

1. Stringent EU Renewable Energy and Decarbonization Directives
Europe's biomethane growth is largely fueled by the EU's binding renewable energy directives, which require member states to ensure a minimum 14% renewable energy share in transport by 2030. The Fit for 55 package further targets a 55% reduction in greenhouse gas emissions by 2030 (compared to 1990 levels), compelling industries and utilities to accelerate biomethane adoption.

The inclusion of biomethane projects under the EU Green Taxonomy has also opened access to green financing and ESG-driven investments, spurring the construction of new plants and upgrading existing biogas facilities.

2. Rapid Expansion of Biomethane Injection into Natural Gas Grids
Grid injection initiatives across France, Germany, Denmark, and the Netherlands have significantly increased biomethane's accessibility and market reach. Governments are promoting renewable gas integration through national renewable gas targets, feed-in tariffs, and investment incentives. The standardization of Guarantees of Origin (GoOs) has further enhanced transparency and market trust.

3. Agricultural Waste Utilization and Circular Economy Practices
Agricultural waste - accounting for 32.8% of Europe's biomethane feedstock - remains the leading resource for production. The use of manure, crop residues, and agro-industrial byproducts not only provides a low-cost feedstock base but also supports sustainable farming and circular economy models.

Latest Market Trends

1. Integration of Bio-CNG and Bio-LNG for Mobility:
With Europe's transport sector under pressure to decarbonize, biomethane is being increasingly compressed into bio-CNG or liquefied into bio-LNG for use in heavy-duty vehicles, shipping, and aviation.
2. Cross-Border Renewable Gas Trade:
The harmonization of regulations under RED III has enabled the cross-border trade of renewable gases, fostering a pan-European market for biomethane certificates and trading.

3. Technological Advancements in Upgrading Processes:
Modern upgrading techniques such as membrane separation and cryogenic upgrading are enhancing purification efficiency, reducing energy consumption, and improving gas yield.

4. Corporate Decarbonization Partnerships:
Energy giants and industrial corporations are signing long-term Gas Purchase Agreements (GPAs) with biomethane producers to secure sustainable gas supplies, supporting both emissions reduction and energy diversification goals.

Key Players and Industry Leaders

The Europe biomethane landscape is characterized by strategic collaborations and technological advancements driven by leading industry participants, including:
• EnviTec Biogas AG
• VERBIO Vereinigte BioEnergie AG
• Future Biogas Limited
• PlanET Biogas Group
• CNG Services Ltd
• LANDWARME GmbH
• Qila Energy
• Evergaz
• WELTEC BIOPOWER GmbH
• ETW ENERGIETECHNIK GmbH
These companies are investing heavily in infrastructure expansion, R&D, and advanced upgrading technologies to improve efficiency and output.
EnviTec Biogas AG, for instance, has expanded into LNG mobility through its acquisition of LIQVIS GmbH (January 2025), positioning itself as a major renewable transport fuel provider. Similarly, Future Biogas Ltd's acquisition of six gas-to-grid anaerobic digestion plants in 2024 underscores the sector's consolidation and investment inflow.

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Recent Developments

• January 31, 2025: EnviTec Biogas AG announced the acquisition of LIQVIS GmbH, enhancing its role in Europe's renewable gas mobility segment.
• August 15, 2024: Future Biogas Ltd and 3i Infrastructure plc entered into a £68.1 million agreement to acquire six AD plants producing over 333 GWh of renewable gas annually.
• Policy Updates: The RED III revision proposal introduces more stringent national renewable gas targets, while the EU Methane Strategy aims to curb methane emissions from waste and agriculture - both benefiting the biomethane sector.
These developments highlight accelerating investments, policy alignment, and the rising confidence of institutional investors in renewable gas projects.

Market Opportunities and Challenges

Opportunities
• Expansion of Renewable Gas Hubs: Development of centralized grid injection facilities across Europe is unlocking new opportunities for producers and distributors.
• Corporate Sustainability Initiatives: Growing demand from industries seeking renewable energy sources for operations and heating applications.
• Green Financing Access: Biomethane's inclusion in the EU Green Taxonomy paves the way for ESG-linked investments and sustainable infrastructure bonds.
• Rising Transport Decarbonization Needs: Adoption of bio-LNG and bio-CNG as alternatives to fossil-based fuels presents new commercial avenues.

Challenges
• High Production and Upgrading Costs: Despite incentives, capital-intensive infrastructure and feedstock logistics pose financial barriers.
• Policy Fragmentation: Variation in national-level implementation of EU directives can create regulatory inconsistencies.
• Feedstock Availability: Seasonal and geographic variations in organic waste supply may affect production continuity.

Future Outlook

Analysts anticipate that Europe will continue to dominate the global biomethane landscape through 2035, supported by ambitious decarbonization goals and technological leadership. Germany, with a 38.7% market share, remains the regional leader due to its robust biogas infrastructure and established feed-in systems under the Renewable Energy Sources Act (EEG).

The U.K., holding 16.4% share, is expected to see accelerated growth driven by its Green Gas Support Scheme (GGSS) and increasing private-sector participation post-Brexit. Meanwhile, France, Denmark, and the Netherlands are rapidly scaling up biomethane injection networks and advancing toward carbon neutrality.

By 2035, biomethane will play a critical role in:
• Meeting renewable transport targets.
• Supporting decentralized energy generation.
• Integrating renewable gas into smart energy systems.
• Enabling Europe's green hydrogen economy as a complementary energy vector.

Market Segmentation

By Feedstock
• Agricultural Waste
• Organic Household Waste
• Animal Manure
• Energy Crops
• Sewage Sludge
• Industrial Food Processing Waste
• Others

By Production Methodology
• Fermentation
• Gasification

By Application
• Transport
• Power Generation
• Heat Generation

By Country
• Germany
• U.K.
• France
• Sweden
• Italy
• The Netherlands
• Rest of Europe

Why Buy This Report?

This comprehensive research report provides:

• Data-backed insights into the Europe biomethane market size, trends, and forecasts through 2035.

• Country-wise analysis of regulatory landscapes, infrastructure development, and market potential.

• Detailed company profiles of top market participants, including financials, strategies, and product portfolios.

• Quantitative analysis of value (US$ Bn) and volume (Thousand Cubic Meters) metrics for all major segments.

• Qualitative analysis of market drivers, restraints, opportunities, and Porter's Five Forces.

• Access to Excel data sheets and PDF format for flexible business intelligence use.

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