The North America renewable natural gas (RNG) market has demonstrated robust growth, expanding 35% since 2023 and adding a record 139 million ft3/d in 2024, according to a recent analysis from Wood Mackenzie.
The report, “Biomethane (RNG) market report: North America”, from Wood Mackenzie’s Biomethane/renewable natural gas service projects the market to add another 70 million ft3/d in 2025, bringing total capacity to 604 million ft3/d. The transportation sector consumes more than half of RNG production.
Texas leads all states in the US, with 73 million ft3/d of activity, followed by Pennsylvania (55 million ft3/d) and Ohio (44 million ft3/d). Canada currently has 46 million ft3/d of activity. Since 2023, M&A activity featured Enbridge's US$1.2 billion acquisition of Morrow Renewables, major investments from Ares, Goldman Sachs, and Stonepeak (US$400 million into Clean Energy Fuels), a TotalEnergies-Vanguard joint venture, and asset acquisitions by Vitol, Apollo, and Sagepoint Energy.
“Market participants have shown their confidence in the future of RNG through increased M&A activity,” said Natalia Patterson, senior research analyst at Wood Mackenzie. “We forecast RNG production to grow across all types of feedstock and the resource potential for RNG could exceed 7.8 billion ft3/d by 2050.”
RNG development prices remain high
Despite robust growth, RNG still faces some challenges, particularly with project development costs.
“High costs will remain an obstacle for new participants entering the market and extended tax incentives will be a key to continued growth of RNG development,” said Patterson.
Clarity on federal subsidies as well as unlocking demand outside of the transportation sector, mainly through voluntary markets driven by utility and corporate decarbonisation targets, would be key for the market’s future potential, added Patterson.
“As more states embrace RNG as part of their decarbonisation strategy, more clarity on future policy development would also help stabilise prices for environmental attributes (EAs) and boost confidence in the RNG sector’s long-term viability,” said Patterson.