This report compares the biogas yields, market trends, and policy drivers for agricultural and municipal feedstocks in anaerobic digestion (AD) as of 2025. Anaerobic digestion (AD) has quietly become one of the workhorse technologies of the bio-economy. Yet not all AD assets are created equal: plants built on agricultural feedstocks (manure, slurries, energy crops) behave very differently from those fed with municipal biowaste (source-separated organics, food waste). This outlook explains how the choice of feedstock family shapes capex, gate fee exposure, biomethane yield, and ultimately project IRR from now to 2030.
What You'll Learn
- 1. Market Snapshot: AD After the Energy Crisis
- 2. Feedstock Archetypes: Agricultural vs Municipal
- 3. Capacity & Pipeline Outlook to 2030
- 4. Economics: Gate Fees, Yields & Specific Costs
- 5. Technology & Digestate Considerations
- 6. Regional Archetypes: EU, North America, Asia
- 7. Devil's Advocate: Why AD Projects Fail
- 8. Outlook to 2030: Where Will Capital Flow?
- 9. FAQ: Questions from Developers & Municipalities
1. Market Snapshot: AD After the Energy Crisis
The 2021–2023 energy crisis pushed biomethane and renewable natural gas (RNG) from side-projects to core decarbonisation levers. AD benefitted directly:
- Utilities and gas TSOs committed to biomethane volume targets in Europe.
- Cities accelerated investments in food waste collection and treatment.
- Agricultural sectors faced pressure to reduce methane from manure lagoons and open storage.
Agricultural AD
Relies primarily on farm-based feedstocks. Revenues depend on energy offtake and sometimes manure methane credits, but gate fee upside is limited outside a few markets.
Municipal AD
Built around household and commercial biowaste. Business case is driven by gate fees and landfill diversion policies, plus energy value of the biogas.
Hybrid Models
Many new projects co-digest both categories, using food waste gate fees to cross-subsidise lower-margin slurries and manures.
2. Feedstock Archetypes: Agricultural vs Municipal
Beyond the simple "farm vs city" split, feedstocks fall into a set of practical archetypes from a developer's viewpoint:
Reported biogas yields depend strongly on the basis used (fresh matter vs dry matter vs volatile solids). For agricultural materials, a practical 2025 range is roughly 200–1,200 m³ of biogas per tonne of volatile solids (VS), depending on feedstock composition and condition (IEA). For municipal organic waste, typical yields are around 150–350 m³ of biogas per tonne, driven by waste mix and processing (IEA).
Efficiency varies by feedstock and process; with the right pre-treatment and co-digestion, municipal plants can close the performance gap with agricultural systems rather than being structurally less efficient (IEA).
Typical AD Feedstock Archetypes
| Archetype | Examples | Biogas Yield (Nm3/t FM, indicative) | Gate Fee / Feedstock Cost | Key Risks |
|---|---|---|---|---|
| Agricultural – manure & slurries | Cattle slurry, pig slurry | 20–30 (source) | Often zero or small fee to farmer | Low energy density, logistics cost, seasonal variation |
| Agricultural – energy crops | Maize silage, grass silage | 160–220 (source) | Positive cost per tonne (competes with feed/land) | Policy risk around land use and food vs fuel debates |
| Municipal – source-separated organics (SSO) | Household food waste, green bin | 110–160 (source) | Positive gate fee (often 50–120 €/t) (source) | Contamination (plastics, metals), odour and community acceptance |
| Commercial food waste | Supermarket waste, food processing residues | 120–200 (source) | Gate fee or sometimes negative cost (source) | Contract length, counterparty risk, seasonality |
Indicative Biogas Yield & Gate Fee by Feedstock Family
Illustrative comparison of average biogas yield and gate fee level for key feedstock families.
3. Capacity & Pipeline Outlook to 2030
Most mature AD markets have already built the "easy" plants. New capacity is increasingly tied to policy-driven collection systems (mandatory food waste separation) and methane abatement programmes in agriculture.
AD Biomethane Capacity Outlook by Feedstock Type (Indexed, 2020 = 100)
Indexed installed and under-construction biomethane capacity using agricultural vs municipal feedstocks in key markets.
4. Economics: Gate Fees, Yields & Specific Costs
At a market level, published estimates commonly place the global anaerobic digestion market growth in the high single digits; as of 2025, a reasonable synthesis range is ~7.94–9.7% CAGR depending on region and segment (MarketsandMarkets).
From a P&L standpoint, the three biggest levers for AD profitability are:
- Net feedstock cost (including gate fees or purchase price).
- Specific biogas yield and methane content.
- Capex and opex per unit of biomethane produced.
Illustrative Economics – Mid-Scale AD Plants (Europe, 2025–2026)
| Plant Type | Feedstock Mix | Net Feedstock Cost | Specific Biomethane Cost* | Notes |
|---|---|---|---|---|
| Agricultural AD | Manure + small share of energy crops | ˜ 0–10 €/t (no gate fee, some crop cost) (source) | ˜ 55–70 €/MWh (source) | Relies heavily on manure methane credits / carbon schemes. |
| Municipal AD | SSO + commercial food waste | Gate fee 50–120 €/t (source) | ˜ 25–45 €/MWh (after gate fee contribution) (source) | Economics dominated by waste management function rather than energy only. |
| Hybrid co-digestion | Manure + SSO + food waste | Moderate gate fee + stable base tonnage (source) | ˜ 35–55 €/MWh (source) | Smoother cash flows, but more complex logistics and permits. |
*LCOE-equivalent specific cost for biomethane, including capex amortisation and opex under reference assumptions.
For developers comparing AD against other methane pathways in this cluster, it is worth contrasting these economics with biogas upgrading technology choices, landfill gas to RNG projects, and the broader bio-economy & waste-to-X market overview.
Specific Biomethane Cost by Plant Type (Illustrative)
Comparison of levelised biomethane production cost for agricultural, municipal and hybrid AD plants.
5. Technology & Digestate Considerations
Feedstock family also dictates design choices for digesters, pre-treatment, and digestate management:
- Agricultural plants often favour CSTR tanks with agitators optimised for high fibre content and long retention times.
- Municipal plants need robust pre-treatment (sorting, depackaging) and often integrate pasteurisation to meet sanitary rules.
- Digestate from agricultural plants can often be returned to fields, while municipal digestate may face stricter land application constraints.
Case Study – Two 30,000 t/y AD Plants with Different Feedstocks
| Parameter | Agricultural AD | Municipal AD |
|---|---|---|
| Key feedstocks | Manure + maize silage | SSO + supermarket food waste |
| Typical biogas yield | ˜ 120 Nm3/t (source) | ˜ 150 Nm3/t (source) |
| Net feedstock cost | Slight net cost (energy crops purchase) | Strong positive gate fee revenue |
| Digestate pathway | Returned as fertiliser to local farms | May require further treatment or blending |
6. Regional Archetypes: EU, North America, Asia
Policy frameworks create distinct AD investment "archetypes" across regions:
Regional AD Market Archetypes
| Region | Dominant Feedstock Family | Key Revenue Drivers | Typical Project Sponsors |
|---|---|---|---|
| North-West Europe | Mix of agricultural and municipal | Feed-in tariffs/premiums + gate fees + Guarantees of Origin | Utilities, specialised AD developers, waste management companies |
| North America (RNG focus) | Agricultural manure + food waste co-digestion | RINs, LCFS-style credits, manure-based methane avoidance credits | Private equity-backed platforms, oil & gas majors, large farms |
| Asia (selected markets) | Municipal and agro-industrial residues | Landfill diversion policies, electricity/heat tariffs, early biomethane pilots | City utilities, waste companies, agro-industrial corporates |
Regional AD Revenue Stack vs Biomethane Cost
Indicative €/MWh breakdown of total revenue (energy + policy support + gate fees) versus specific biomethane cost by region.
7. Devil's Advocate: Why AD Projects Fail
Despite mature technology, AD projects still fail for very human reasons:
- Feedstock contract optimism: Plants built on non-binding letters of intent instead of bankable long-term contracts.
- Underestimating contamination: Municipal projects that cut corners on pre-treatment and pay later in downtime and digester damage.
- Digestate "afterthoughts": No secured offtake or treatment pathway, leading to bottlenecks and unplanned capex.
- Community backlash: Odour, truck traffic, and visual impact killing political support or delaying permits.
From a financier's seat, the difference between an agricultural and a municipal AD project is not just technical. It is a question of who holds the waste management risk, who controls feedstock logistics, and whether gate fee revenues are resilient across business cycles.
8. Outlook to 2030: Where Will Capital Flow?
Looking to 2030, we see three high-conviction themes in the AD market:
- Co-digestion hubs: Regional plants combining manures, food waste, and agro-industrial residues, designed as "waste valorisation platforms" rather than single-feedstock plants.
- Manure-focused RNG in credit-heavy markets: In North America and a few EU schemes, manure-based AD integrated with upgrading will remain highly competitive as long as methane avoidance credits hold value.
- Municipal AD as infrastructure: In urban areas, AD is becoming a core part of circular economy infrastructure for cities, bundled with material recovery and composting contracts.
For investors, the key is not to ask "agricultural or municipal?" in isolation, but rather: Which mix of feedstocks and contracts delivers the most robust, policy-resilient cash flows over 15–20 years?
Next step
If you want to quantify the climate impact of your organic waste strategy alongside energy outcomes, start with:
Note: Dedicated biogas yield and feedstock optimisation calculators can be added to the Tools hub if you want them as standalone pages.