Biogas and biomethane could meet a quarter of the current global natural gas demand if fully exploited, found a new report by the International Energy Agency, but high production costs, infrastructure gaps and regulatory complexity continue to hamper growth.

According to the report, governments are increasingly turning to biogas — a clean energy source derived from organic waste — to reduce emissions, decrease reliance on fossil fuels, and promote rural development.

Since 2020, more than 50 new policies have been introduced globally to support biogases. Europe has led the charge, with Denmark sourcing 40 percent of its gas demand from biogases and France rapidly expanding production.

India has mandated a 5 percent biomethane blend in compressed natural gas by 2028, and Brazil has enshrined biomethane in its “Fuels of the Future” law.

Despite this progress, combined global biogas and biomethane production remains modest at nearly 50 billion cubic meters of natural gas equivalent, or in short, bcme, or less than 1 percent of global natural gas demand.

Massive Untapped Potential in Emerging Economies

Using a comprehensive geospatial analysis of over 5 million locations worldwide, the IEA estimates that up to 1 trillion cubic metres of biogases could be produced sustainably each year — equivalent to one-quarter of global natural gas consumption.

Almost 80 percent of this potential lies in emerging and developing economies, led by Brazil, China and India.

Yet just 5 percent of this potential is currently being used. The European Union utilizes approximately 40 percent of its capacity, while most other countries remain significantly behind.

High Costs Limit Commercial Viability

On average, biomethane production costs about $18 per gigajoule — roughly five times the cost of fossil-based natural gas. Only a small portion of the biogas potential is currently cost-competitive without subsidies.

However, costs can fall dramatically in favorable regions; in parts of Asia, up to 40 bcme could be produced below current market prices.

Factoring in environmental co-benefits, such as avoided emissions or the use of digestate as fertilizer, could tip the economic scales.

A carbon price of $70 per tonne could make 400 bcme globally competitive with fossil fuels.

Methane Emissions Pose Environmental Risk

Biogases can help reduce methane leaks from landfills and agriculture if managed properly. If global manure-based biogas potential were fully tapped, it could cut 1.4 billion tonnes of CO₂-equivalent emissions.

But the IEA warns that methane leakage from biogas plants — averaging 6 percent — can offset these climate gains unless stricter best practices are enforced.

Investment Needed, Especially in Emerging Markets

Most new growth is projected in developing economies, with China expected to expand production fifteenfold by 2035, and India and Brazil seeing sevenfold increases.

However, scale-up efforts often stall due to limited financing, permitting delays, and fragmented policy frameworks.

A scenario where EU climate targets are met could see biomethane displace $30 billion in natural gas imports between 2024 and 2035, while creating 200,000 jobs.

Globally, full deployment of biogas potential could support up to 10 million jobs by 2035.

The IEA emphasizes that robust, locally tailored policies are crucial to realizing the full potential of biogas. Production is inherently decentralized, and feedstock availability, infrastructure and environmental risks vary widely.

“Biogases can be a linchpin of sustainable energy systems,” the report concludes, “but realizing their potential requires smart policy, sustained investment and clear-eyed understanding of trade-offs.”

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