Biogas faces mounting economic pressure as the cost of wind and solar energy has plummeted by 70 to 90 per cent over the past decade, whilst bioenergy costs have stagnated or risen slightly—from 0.086 to 0.087 USD/kWh.
In Germany, the 2024 levelised cost of electricity for biogas ranged from 20.2 to 32.5 euro cents/kWh, far exceeding wind at 4.3–10.3 euro cents/kWh and utility-scale solar photovoltaic at 4.1–6.9 euro cents/kWh, according to analysis published in ENGINEERING Environment by researchers from the University of Galway and an international team spanning Spain, the Netherlands, the United Kingdom, China and Japan.
The gap reflects fundamental structural differences. Whilst wind turbines and solar panels are standardised, mass-manufactured technologies that benefit from economies of scale, biogas systems are site-specific and less scalable.
More critically, biodigester installation accounts for only 20 to 40 per cent of total biomethane production costs, with feedstock procurement, processing and plant operations consuming the remainder—a recurring burden that wind and solar entirely avoid.
Feedstock availability poses an equally serious constraint. The International Energy Agency estimates global biomethane potential at about 730 million tonnes of oil equivalent, but only 55 Mtoe can be developed below 10 USD/MMBtu.
Germany illustrates the land-use tension: in 2024, energy crops for biogas occupied 1.35 million hectares, with maize covering nearly two-thirds of that area. Each additional billion cubic metres of crop-based biomethane would require roughly 0.17 to 0.25 million hectares of agricultural land, risking direct competition between fuel and food production.
Germany, Italy and Austria have already shifted feedstocks from organic waste to purpose-grown energy crops to keep plants economically viable, intensifying this conflict.
Subsidy dependency remains a critical vulnerability. From 2021 to 2023, European Union fossil-fuel subsidies surged whilst renewable-energy subsidies declined from €83 billion to €61 billion.
A recent Irish case study revealed that a 40 GWh/year anaerobic digestion plant producing biomethane from cattle slurry and grass silage required, beyond biomethane certificates and capital grants, an additional farm subsidy of €893 per hectare to remain viable.
The authors argue that biogas must fundamentally reposition itself. "Biogas cannot compete with wind and solar on cost, and it never will if we keep treating it as a primary electricity source," they wrote. "The real value of biogas lies not in competing head-to-head with renewables on price, but in providing grid flexibility, managing organic waste and enabling green chemistry."
They advocate strategic, case-by-case deployment focused on delivering unique, non-substitutable benefits. These include leveraging existing gas infrastructure for seasonal energy storage and rapid load balancing—capabilities current battery technologies cannot yet match economically.
Anaerobic digestion can inactivate over 99 per cent of major pathogens in livestock manure, and fully utilising manure for biogas could mitigate 1,000 MtCO₂-equivalent of agricultural greenhouse gas emissions annually.
Biogas could also support methane-based biorefineries for producing green chemicals. However, without breakthroughs in feedstock availability, poorly planned biogas expansion risks becoming a financial liability rather than a climate solution.
