The Europe biomethane market was valued at USD 2.9 billion in 2024 and is projected to reach USD 6.1 billion by the end of 2035. The industry is expected to grow at a CAGR of 7.0% during the forecast period from 2025 to 2035. Growth is driven by strong decarbonization targets, supportive government policies, rising investments in renewable gas infrastructure, and increasing demand for sustainable alternatives to natural gas across transportation, power generation, and heating applications.

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Biomethane is a renewable source of natural gas that is obtained by upgrading biogas, which is produced through the anaerobic digestion of organic wastes like agricultural residues, food waste, and sewage sludge. During this process, the biogas is cleaned to eliminate impurities such as hydrogen sulfide and carbon dioxide to obtain high-purity biomethane that is identical in properties to commercial natural gas.

Key Findings of the Market Report

• Anaerobic Digestion (AD) remains the primary production pathway, accounting for over 80% of the market, though Thermal Gasification is emerging as a high-growth segment for processing woody biomass.
• Agriculture-based Feedstocks (manure, residues, and sequential crops) dominate the input mix, representing roughly 70% of production as regulations pivot away from food-based energy crops.
• The Transportation Segment is the fastest-growing application, particularly for Bio-LNG and Bio-CNG in heavy-duty trucking and maritime shipping (spurred by the FuelEU Maritime regulation).
• Germany continues to lead the market in total volume, while France, Denmark, and Italy are recording the fastest capacity expansions due to streamlined permitting and grid-injection mandates.

Europe Biomethane Market: Growth Drivers

• REPowerEU & Energy Security: The mandate to phase out Russian fossil fuel imports has made biomethane a strategic pillar for the EU's energy security, leading to €28.4 billion in committed private investment through 2030.
• Decarbonization of Heavy Transport: Regulations such as Fit for 55 and the inclusion of shipping in the EU ETS are driving massive demand for Bio-LNG as a drop-in fuel for long-haul logistics.
• Circular Bioeconomy & Biofertilisers: The production of digestate as a by-product allows farmers to replace up to 65% of synthetic nitrogen fertilizers by 2040, providing an additional revenue stream and reducing agricultural emissions.
• Grid Infrastructure Compatibility: Unlike hydrogen, biomethane is "ready-to-use" with existing gas grids, boilers, and engines, significantly lowering the transition costs for industrial users.

Europe Biomethane Market: Regional Landscape

• Germany: The largest producer globally, currently pivoting its massive biogas fleet toward biomethane upgrading to serve the transport and heating sectors.
• France: A leader in grid-connected projects; it has implemented successful "Right to Injection" laws that mandate grid operators to accommodate biomethane producers.
• Denmark: Noted for its high integration level, where biomethane already covers a significant double-digit percentage of the total national gas consumption.
• Italy: Benefiting from a €1.7 billion National Recovery and Resilience Plan (PNRR) specifically dedicated to converting existing biogas plants to biomethane.

Europe Biomethane Market: Key Players

The market features a mix of traditional energy majors and specialized biogas engineering firms.

• Shell Biogas (Nature Energy)
• Air Liquide
• BP p.l.c. (Archaea Energy)
• TotalEnergies
• Engie
• Verbio Vereinigte BioEnergie AG
• EnviTec Biogas AG
• Wärtsilä Corporation
• Gasum Oy
• Schmack Carbotech (Viessmann Group)

Key Developments

• April 2025: Shell successfully commissioned its largest bio-LNG plant in Germany, capable of fueling 4,000–5,000 trucks annually using grid-injected biomethane.
• January 2025: Poland officially injected its first commercial volumes of biomethane into the national gas grid, signaling the opening of a major new Eastern European market.
• November 2024: Gasum acquired Hærup Biogas in Denmark to strengthen its portfolio of liquefied renewable gas (LBG) for the Nordic maritime sector.

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Europe Biomethane Market: Segmentation

By Feedstock

• Agricultural Residues & Animal Manure (Dominant)
• Municipal Solid Waste (MSW)
• Energy Crops (Sequential/Intermediate)
• Sewage Sludge & Industrial Waste

By Production Pathway

• Anaerobic Digestion (Market Leader)
• Thermal Gasification & Methanation (Fastest Growing)
• Power-to-Methane (Pilot Scale)

By Application

• Transportation Fuel (Bio-CNG/Bio-LNG)
• Power Generation (Dispatchable Power)
• Industrial Heat & Feedstock
• Residential Heating (Grid Blending)

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