Global Renewable Natural Gas Market By Source (Agricultural RNG Resource, Sewage & Wastewater RNG Resource, Landfill RNG Resource and others), Application (Electricity generation, Vehicle fuel, Gas grid and others), and Region - Market Perspective, Market Intelligence, Comprehensive Analysis, Historical Data, and Forecast for 2023-2032

Market Perspective

The global Renewable Natural Gas Market size was valued at USD 11.68 billion in 2022 and is projected to reach a market valuation of USD 104.74 billion by 2032 at a CAGR of 27.6% during the forecast period 2023-2032. The rapid growth in product demand is attributed to the growing emphasis on findings and using renewable substitutes for natural gas as governments across the globe are focusing more on utilizing clean energy sources.

Renewable natural gas (RNG), also known as biomethane, is a clean and environmentally friendly fuel that is becoming increasingly popular as a transportation fuel and home heating alternative. RNG is produced from organic waste products such as food waste, animal manure, and sewage treatment plants.

The use of RNG as a transportation fuel has grown significantly in recent years due to the environmental benefits and the fact that it is a cheaper alternative to traditional fossil fuels. As of December 2021, there were approximately 23 million RNG-powered vehicles on the road worldwide, and more than 175,000 alone were in the United States.

Moreover, RNG can also be used for home heating, and also gaining traction around the globe. Many homeowners are increasingly preferring RNG because it is a cleaner burning fuel than natural gas or propane and is less expensive. This is expected to be fuelled by the steady shift in utilization from conventional natural gas to clean gas to reduce biodegradable wastes and turn them into cleaner sources of renewable natural gas.

Key Insights

• By source, the agricultural RNG resource segment dominated the global renewable natural gas market in 2022
• By application, the electricity generation segment dominated the market in 2022
• By region, Europe continued to be the leading revenue contributor to the market in 2022

Growing Concern Over Environmental Safety is Augmenting the Market Growth

Greenhouse gas emission has been one of the prominent issues impacting the environment and public health. The combustion of natural gas leads to even more carbon emissions into the atmosphere. Wherein over 65% of total emission is caused by carbon dioxide emitted from fossil fuel. Renewable natural gas (RNG is a pipeline-quality gas that is fully interchangeable with traditional natural gas and can be used in any natural gas application.

RNG is produced from decomposing organic waste in landfills, wastewater treatment plants, and agricultural operations. In short, renewable natural gas is a clean burning fuel, with up to 90% fewer emissions than conventional fossil fuels. It is also a renewable resource, which means it has the potential to help displace fossil fuels and reduce our reliance on imported energy.

The demand for renewable natural gas is growing as more businesses and utilities look for ways to reduce their environmental impact. In particular, there is growing concern over the safety of natural gas extracted from hydraulic fracturing (fracking). There are increasing concerns that fracking can contaminate drinking water supplies and release methane, a potent greenhouse gas, into the atmosphere. As a result, many businesses and utilities are looking for cleaner, safer alternative fuels like RNG.

According to the U.S. Environmental Protection Agency, RNG is “the cleanest burning transportation fuel available today,” and its use “can significantly reduce greenhouse gas emissions.”  In addition, RNG can help create local jobs and spur economic development.

Favorable Government Policies and Focus on Sustainable Development Goals is a Vital Trend

The world is increasingly turning to renewable energy sources to meet its ever-growing energy needs. This is partly due to the fact that renewable energy sources are becoming more affordable but also because of the growing focus on sustainability. One of the most promising renewable energy sources is renewable natural gas (RNG). This makes it a much cleaner and more sustainable option than traditional natural gas produced from fossil fuels.

Several factors, including favorable government policies and a focus on sustainable development goals, are driving the global renewable natural gas market value. In particular, It is seen as a key part of the transition to a low-carbon economy. In line with this, many countries are promoting its use through various policies and initiatives. In addition, the United Nations has included RNG in its Sustainable Development Goals (SDG). Goal 7 of the SDGs calls for increased access to affordable and clean energy.

Moreover, the UN hopes to help countries achieve this goal and move closer to a sustainable future by promoting RNG. The combination of these factors is driving the renewable natural gas market share globally. This is good news for the environment and the economy, as RNG represents a cleaner and more sustainable form of energy production.

High Capital Expenditures on Biogas Facilities is Limiting the Market Growth

RNG production plant installation needs very high capital expenditures as the machinery and other equipment required for the plants are still expensive. Setting up the plants also involves vast spaces of land. The procurement and storage of organic materials needed for biogas production is constantly changing and burdensome. The competition of suppliers in the renewable natural gas market is relatively low, keeping operational costs high.

Segmentation Analysis

By source, the market is categorized into agricultural RNG resources, sewage & wastewater RNG resource, landfill RNG resource, and others. The agricultural RNG resource segment dominated the renewable natural gas market revenue. Agricultural resources mainly include organic matter, animal manure, and other wastes from farm activities.

As per our latest study, up to 18% of the total biogas supply can be fulfilled by the gas generated from agricultural resources. Amongst other resources, wasted food accounts for high quantities globally. However, accessibility and procurement of all waste food are not within reach. In 2021, there were around 113 manure-based biogas production systems in the U.S.

By application, the renewable natural gas market is segmented into electricity generation, vehicle fuel, gas grid, and other applications. The consumption and demand for electricity are everlasting and is increasing with each year owing to rapid technological advancements in electronics, logistics, manufacturing, and other sectors. In 2022, most of the biogas produced across the globe was majorly used for electricity generation. However, heating and vehicle fuel segments are expected to continue witnessing significant growth in product consumption in the future.

Recent Developments

In December 2022-

• Green Rock Energy Partners LLC, engaged in sustainable infrastructure development, acquired South Hills Landfill Gas Venture LLC. This acquisition has added the renewable natural gas-producing venture to Green Rock’s expanding renewable energy space portfolio. This strategy is in line with the company’s primary focus on waste-to-value energy-producing assets.
• Suburban Renewable Energy LLC, a wholly owned subsidiary of Suburban Propane Partners LP, a countrywide provider of propane and energy products, agreed to purchase a renewable natural gas asset platform from Equilibrium Capital Group, one of the key sustainability-driven asset management companies.

In November 2022- Shell Petroleum acquired Nature Energy, a Denmark-based company. Nature Energy is one of the most significant producers of renewable natural gas.

Europe dominated the Market Share Owing to the Increased Consumption of Renewable Energy Sources

Europe and North America have made significant progress in the renewable natural gas market. Europe dominated the market revenue in 2022. Each year, Europe processes approximately 2.4 billion cubic meters of renewable natural gas. Furthermore, the Renewable Energy Directive (RED) has aimed to increase renewable energy sources consumption to 32%.

On the other hand, North America has also shown remarkable developments, with the U.S. having more than 2,000 plants set up across the country. In addition, the government is witnessing a strong influx of capital in the U.S. for establishing new renewable natural gas facilities.

Asia Pacific is projected to continue enjoying a strong momentum in product demand, especially across China, India, and Japan. These countries have already instrumented regulations to gain control over their carbon footprints. For instance, in India, about 5,690 MW of power production is done from organic waste.

Competitive Landscape

Some of the key players in the renewable natural gas industry are Clean Energy Fuels, Archaea Energy Inc., VERBIO VEREINIGTE BIOENERGIE AG, Vanguard Renewables, J V Energen, Gasrec, Future Biogas, REN Energy, Dominion Energy, Deqingyuan, California Bioenergy, Asia Biogas, AltEnergo, Waga Energy and Ameresco amongst others.

The global renewable natural gas market is segmented as follows:

By Source

• Agricultural RNG Resource
• Sewage & Wastewater RNG Resource
• Landfill RNG Resource
• Others

By Application

• Electricity generation
• Vehicle fuel
• Gas grid

By Region

• North America
  • The U.S.
  • Canada
  • Mexico
• Europe
  • France
  • The UK
  • Spain
  • Germany
  • Italy
  • Nordic countries
    • Denmark
    • Finland
    • Iceland
    • Sweden
    • Norway
  • Benelux Reunion
    • Belgium
    • The Netherlands
    • Luxembourg
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • New Zealand
  • Australia
  • South Korea
  • Southeast Asia
    • Indonesia
    • Thailand
    • Malaysia
    • Singapore
    • Rest of Southeast Asia
  • Rest of Asia Pacific
• The Middle East & Africa
  • Saudi Arabia
  • UAE
  • Egypt
  • Kuwait
  • South Africa
  • Rest of the Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America