Biomethane: A Global Market in Full Expansion

Biomethane — known as Renewable Natural Gas in the US — has seen global production increase sevenfold over the past decade, exceeding 106 TWh in 2024 — a 20% year-on-year increase driven primarily by Europe and North America. The United States leads worldwide production at 38 TWh, with 90% directed to the transportation sector and 70% sourced from landfills. In Europe, production grew by 15% in 2024 alone, with France poised to become the continent's top producer.

But the story no longer stops at established markets. Biomethane production is expanding rapidly in emerging economies such as Brazil, China and India, marking a global movement toward more sustainable energy sources. According to the International Energy Agency (IEA), global biomethane production potential exceeds 8,000 TWh — a resource that is geographically dispersed, with the US and Europe each holding 16%, China and Brazil 12%, and India 8%.

The global biomethane market, valued at approximately USD 16 billion in 2025, is projected to reach USD 30–35 billion by 2035, expanding at a compound annual growth rate of around 8%. North America holds the largest market share (~37–45%), while Asia-Pacific is the fastest-growing region.

• Europe: REPowerEU and the 35 bcm Target

Biomethane sits at the heart of Europe's energy and economic strategy. Russia's invasion of Ukraine intensified the drive to reduce dependence on fossil gas imports, leading the European Commission to launch the REPowerEU plan in May 2022. The plan calls for €37 billion in investment in the biogas sector and targets 35 billion cubic meters (~370 TWh) of annual biomethane production by 2030 — up from around 3 bcm today.

Individual EU member states are reinforcing this momentum with national frameworks:

• France targets 44 TWh of injected biomethane by 2030 under its Multi-Year Energy Program (PPE3), with Biogas Production Certificates (CPBs) creating new market dynamics since July 2024.
• Italy has allocated €1.73 billion under its National Recovery and Resilience Plan (PNRR) to support biomethane injection, reinforced by a new decree in January 2026.
• Spain is transposing the RED III Directive to boost biomethane demand, particularly in the transport sector, with a new remuneration framework for gas network operators expected for 2027–2032.
• The United Kingdom supports production through the Green Gas Support Scheme (GGSS) and Renewable Transport Fuel Obligation (RTFO).

However, as a recent IFRI study (June 2026) notes, the European biomethane sector is at a "critical juncture" — scaling up will require stronger policy alignment to translate ambitious targets into actual production capacity.

• North America: Resilient Fundamentals Despite Political Shifts

In the United States, biomethane capacity has grown by +35% between 2023 and 2025, driven by the federal Renewable Fuel Standard (RFS) program. The EPA published final Renewable Volume Obligations (RVOs) for 2026–2027 in March 2026, with D3 RIN volumes increasing slightly (from 1.30 to 1.36 billion credits in 2026; from 1.36 to 1.43 billion in 2027).

The RFS is a bipartisan mechanism established under the Bush administration in 2007, maintained across Democratic and Republican administrations — including during President Trump's first term. The current administration has placed biofuels, including biomethane, on the list of energies to be promoted. The "One Big Beautiful Bill Act" (OBBBA) signed in July 2025 cancelled the Investment Tax Credit (ITC) for new projects but extended the Production Tax Credit (PTC) for biomethane through December 2029.

In Canada, gas distributors are targeting a national goal of 10% renewable gas in the grid by 2030. In Quebec, Énergir is required to integrate 5% biomethane by 2025 and 10% by 2030 through long-term contracts (20 years). In British Columbia, FortisBC must incorporate 15% renewable energy by 2030.

• Emerging Markets: Brazil, China, India

Beyond established markets, the IEA projects that China and India will become significant biomethane consumers, reaching 234 TWh and 70 TWh respectively by 2030 under the Stated Policies Scenario. Brazil — described by the IEA as a potential leading biomethane producer worldwide by 2030 — is also emerging as a major growth market.

• The Maritime Frontier: Bio-LNG and the IMO Net-Zero Framework

One of the most promising — and least discussed — demand drivers for biomethane lies in international shipping. In April 2025, the International Maritime Organization (IMO) approved its Net-Zero Framework, the first in the world to combine mandatory GHG fuel intensity standards and a global emissions pricing mechanism across an entire industry sector.

The framework applies to ocean-going ships over 5,000 gross tonnage — responsible for 85% of shipping's CO₂ emissions — and requires them to progressively reduce their greenhouse gas fuel intensity on a well-to-wake basis.

Although formal adoption was postponed to 2026 after a contentious extraordinary MEPC session in October 2025, work on implementation guidelines has continued through 2026 intersessional working groups. A coalition of 87 shipping companies, ports and clean-fuel producers has urged adoption at MEPC 85, emphasizing that the framework provides regulatory clarity for investments in low-carbon fuels.

Biomethane, in the form of bio-LNG, is well positioned as a drop-in fuel for existing LNG-powered vessels — requiring no engine modifications or new bunkering infrastructure. If ratified, the framework's fuel intensity requirements would create substantial demand for low-carbon biofuels, including biomethane.

The convergence of these international dynamics creates a structural shift in the biomethane landscape:

• For landfill owners: the global addressable market is expanding well beyond the US and France. Landfill gas — historically flared or converted to low-value electricity — is becoming a strategic resource as countries implement biomethane mandates and carbon pricing mechanisms.

• For biomethane buyers: diversifying supply sources across geographies reduces exposure to any single regulatory environment. International certification frameworks (ISCC for RED II, RFS D3-RINs, French CPBs) enable cross-border valorization of biomethane's green attributes.

• For the industry at large: the entry of major oil and gas companies — BP's $3.8B acquisition of Archaea Energy, Shell's $1.9B purchase of Nature Energy, Enbridge's $1.2B acquisition of Morrow Renewables — signals that biomethane is transitioning from a niche renewable to a core component of global energy portfolios.

The convergence of these international dynamics creates a structural shift in the biomethane landscape:

• For landfill owners: the global addressable market is expanding well beyond the US and France. Landfill gas — historically flared or converted to low-value electricity — is becoming a strategic resource as countries implement biomethane mandates and carbon pricing mechanisms.

• For biomethane buyers: diversifying supply sources across geographies reduces exposure to any single regulatory environment. International certification frameworks (ISCC for RED II, RFS D3-RINs, French CPBs) enable cross-border valorization of biomethane's green attributes.

• For the industry at large: the entry of major oil and gas companies — BP's $3.8B acquisition of Archaea Energy, Shell's $1.9B purchase of Nature Energy, Enbridge's $1.2B acquisition of Morrow Renewables — signals that biomethane is transitioning from a niche renewable to a core component of global energy portfolios.