RENEWABLE NATURAL GAS MARKET Size and trends

Renewable Natural Gas Market Size and Trends

The global renewable natural gas market is estimated to be valued at USD 15.20 Bn in 2025 and is expected to reach USD 26.57 Bn by 2032, exhibiting a compound annual growth rate (CAGR) of 8.3% from 2025 to 2032.

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The growth in the global renewable natural gas market is driven by many countries and states increasing their renewable energy targets over the next decade. With continued expansion of waste-to-energy projects and growth of organic waste, the supply of renewable natural gas is expected to steadily rise to meet the growing demand. Many utilities and power generation companies are investing more in renewable natural gas projects as it helps them meet environmental regulations at a relatively low cost compared to other alternatives like hydrogen.

Market Driver - Government support and incentives

With the looming threats of climate change becoming more apparent, governments across the globe are focusing their policy efforts towards transitioning to more eco-friendly sources of energy. Renewable natural gas has emerged as a promising option that can leverage the existing infrastructure for natural gas while providing carbon neutral or negative options. Many jurisdictions have introduced financial incentives and policy support for the production and use of renewable natural gas, for instance, The Renewable Natural Gas Incentive Act of 2023 proposes to amend the Internal Revenue Code to increase the tax credit for renewable natural gas (RNG) used as a transportation fuel. The act aims to raise the credit to $1.00 per gallon for RNG sold for use in vehicles, aviation, or by the taxpayer. By enhancing the incentive for RNG production and consumption, the legislation seeks to drive job creation, economic expansion, and emissions reduction across various sectors. In North America, countries like the U.S. and Canada offer production tax credits and grants for setting up biogas plants and projects involving biomethane injection into natural gas pipelines. States and provinces also provide rebates and subsidies for businesses and consumers adopting renewable natural gas. This includes incentives for purchasing vehicles that can run on renewable natural gas. Such supportive policies and financial packages make renewable natural gas an attractive investment proposition and also reduce the cost of adoption, increasing its competitiveness against traditional natural gas.

In Europe as well, governments have rolled out renewable energy targets that consider biomethane and other forms of renewable natural gas as qualifying fuels. Financial incentives like carbon credits and feed-in-tariffs ensure producers of renewable gas can benefit. Italy, France, and Sweden too offer lucrative policy frameworks driving higher renewable natural gas consumption. Even in Asian nations, China and South Korea are formulating progressive policies around biogas and biomethane production from agriculture and municipal waste streams. With more commitments being made towards net-zero emissions globally, the incentives for transitioning to cleaner renewable fuels like natural gas are expected to further scale up in the coming years. This is anticipated to significantly boost investments and capacity additions in the renewable natural gas industry.