Anaerobic Digestion Systems Market Size, Share, Forecast, & Trends Analysis by Offering (Hardware, Software, Services), Feedstock Type (Agriculture Waste, Municipal Waste), Capacity, Application, and Sector (Energy & Utilities, Commercial & Residential, Industrial) Global - Forecast to 2031

The growth of this market is primarily driven by the rising demand for renewable energy sources, government initiatives supporting the development & adoption of anaerobic digestion systems, the growing need for safe waste disposal, and increasing awareness regarding the benefits of anaerobic digestion systems. Furthermore, the increasing use of anaerobic digestion systems in sewage & wastewater treatment and the integration of advanced technologies into anaerobic digestion systems are expected to generate growth opportunities for market stakeholders.

Rising Demand for Renewable Energy Sources

The demand for renewable energy is growing rapidly due to environmental, economic, and technological factors. As concerns over climate change intensify, governments, businesses, and individuals are seeking cleaner, more sustainable energy sources to reduce carbon emissions and mitigate the effects of global warming. Moreover, public awareness and corporate sustainability commitments are driving the demand for cleaner energy options, while government policies, such as subsidies and renewable energy targets, are further accelerating the transition. According to Renewables 2023, the latest edition of the IEA’s annual market report on the sector, the amount of renewable energy capacity added to energy systems around the world grew by 50% in 2023, reaching almost 510 gigawatts, with solar PV accounting for three-quarters of the addition worldwide.

The shift toward clean and renewable energy sources is one of the primary factors driving the adoption of anaerobic digestion systems. Biogas, produced through anaerobic digestion, is a renewable energy source that can be used for electricity generation, heating, and even as vehicle fuel. As governments, businesses, and consumers seek to reduce carbon emissions and the reliance on fossil fuels, the demand for sustainable energy solutions, such as biogas, continues to grow. Anaerobic digestion systems have emerged as reliable, local, and carbon-neutral energy sources. Thus, the rising demand for renewable energy sources is boosting the adoption of anaerobic digestion systems, driving the growth of this market.

Integration of Advanced Technologies into Anaerobic Digestion Systems

The rising use of technologies in anaerobic digestion is transforming the way biogas production and waste management systems are operated, optimized, and monitored. Advances in various fields, such as digitalization, automation, data analytics, renewable energy, and advanced materials, are enhancing the efficiency, scalability, and sustainability of anaerobic digestion plants. As technology continues to advance, newer, more efficient anaerobic digestion systems are being developed. Innovations in areas such as biogas upgrading, digestate processing, and automated monitoring systems can increase the efficiency and economic viability of anaerobic digestion. The integration of digital technologies such as the Internet of Things (for monitoring) and artificial intelligence (for optimizing biogas production), and advanced pretreatment methods are generating new opportunities for industry stakeholders.

The integration of IoT in anaerobic digestion can significantly improve the operation, efficiency, and safety of biogas plants. Continuous data collection and real-time feedback enable operators to optimize performance, reduce costs, and ensure that the systems run smoothly. Artificial intelligence and machine learning are being increasingly integrated to analyze vast datasets, predict biogas yields, and automate adjustments to the digestion process for maximum efficiency. At the same time, advanced bioreactor designs and pretreatment technologies are improving feedstock processing, enabling the digestion of more diverse waste types, and boosting biogas output. Therefore, the integration of advanced technologies into anaerobic digestion systems is generating market growth opportunities.

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The Hardware Segment to Dominate the Anaerobic Digestion Systems Market in 2024

Based on offering, the anaerobic digestion systems market is segmented into hardware, software, and services. In 2024, the hardware segment is expected to account for the largest share of 46.7% of the anaerobic digestion systems market. The segment’s large market share is attributed to the growing demand for renewable energy sources and sustainable waste management practices and the increasing use of digesters, generators, compressors, gas storage tanks, pumps, pipes, and other equipment necessary for the anaerobic digestion process.

However, the software segment is expected to register the highest CAGR of 11.7% during the forecast period. The growth of this segment is driven by the integration of anaerobic digestion solutions with SCADA systems, increasing strategic developments among anaerobic digestion software providers, and the increased use of anaerobic digestion software in the industrial sector.

The Industrial Waste Segment to Dominate the Anaerobic Digestion Systems Market in 2024

Based on feedstock type, the global anaerobic digestion systems market is segmented into agricultural waste, municipal waste, industrial waste, sewage waste, and other feedstocks. In 2024, the industrial waste segment is expected to account for the largest share of 25.6% of the global anaerobic digestion systems market. The segment’s large market share is attributed to increasing government regulations promoting the adoption of green technologies, the high generation of organic waste in the industrial sector, and the increasing adoption of anaerobic digestion systems among industrial organizations.

However, the agricultural waste segment is expected to register the highest CAGR of 12.4% during the forecast period. The growth of this segment is driven by the increasing volume of organic waste material generated in the agriculture sector, the need to convert agricultural waste to renewable energy through anaerobic digestion, reduce greenhouse gas emissions, and improve soil health, and the rising demand for renewable energy sources among farmers and rural communities to reduce their dependence on fossil fuels.

The Medium-scale Segment to Dominate the Anaerobic Digestion Systems Market in 2024

Based on capacity, the global anaerobic digestion systems market is segmented into small-scale, medium-scale, and large-scale. In 2024, the medium-scale segment is expected to account for the largest share of 41.4% of the anaerobic digestion systems market. The segment’s large market share is attributed to the increasing use of anaerobic digestion systems with a capacity between 500KW-3MW for commercial and industrial operations and the growing need to process large volumes of organic waste for biogas production in large-scale renewable energy projects.

Moreover, the medium-scale segment is expected to register the highest CAGR of 11.1% during the forecast period.

The Agricultural & Industrial Waste Segment to Dominate the Anaerobic Digestion Systems Market in 2024

Based on application, the global anaerobic digestion systems market is segmented into power generation, fuel, agricultural & industrial waste management, and other applications. In 2024, the agricultural & industrial waste management segment is expected to account for the largest share of 42.1% of the global anaerobic digestion systems market. The segment’s large market share is attributed to the integration of anaerobic digestion systems into agricultural waste management and the increasing demand for anaerobic digestion systems across various industries such as food & beverage, pulp & paper, and agriculture.

Moreover, this segment is also expected to register the highest CAGR of 11.4% during the forecast period.

The Energy & Utilities Segment to Dominate the Anaerobic Digestion Systems Market in 2024

Based on sector, the global anaerobic digestion systems market is segmented into automotive, energy & utilities, commercial & residential, agriculture, and industrial. In 2024, the energy & utilities segment is expected to account for the largest share of 32.2% of the global anaerobic digestion systems market. The segment’s large market share is attributed to the increasing need to reduce greenhouse gas emissions, the rising acceptance of biofuels, and the need for alternative renewable energy sources.

However, the agriculture segment is expected to register the highest CAGR of 12.3% during the forecast period. The growth of this segment is driven by increasing government mandates to reduce agricultural waste, the growing need to process crop residues and animal waste from livestock operations, and the increasing use of co-digestion systems to manage agricultural waste to increase biogas production and produce organic fertilizer.

In 2024, North America Region to Dominate the Anaerobic Digestion Systems Market

In 2024, North America is expected to account for the largest share of 34.3% of the global anaerobic digestion systems market. North America’s major market share is mainly attributed to its developed waste management infrastructure, stringent environmental regulations, high food waste levels, and a growing focus on renewable energy are driving the growth of the anaerobic digestion systems market. In addition, the presence of prominent players supports the anaerobic digestion systems market growth. For instance, in July 2022, Evoqua Water Technologies Corp. (U.S.) acquired Smith Engineering, Inc. (U.S.), a leader in the design, manufacturing, and service of custom high-purity water treatment equipment. The acquisition will enhance Evoqua's portfolio of high-purity water treatment systems and expand its service footprint in North America.

However, the Asia-Pacific region is projected to register the highest CAGR of 11.2% during the forecast period. The growth of this regional market is attributed to the increasing demand for sustainable waste management solutions, the increasing waste management regulations to reduce the amount of waste going to landfills and promote recycling, and the increasing government policies and incentives in countries, including China, India, and Japan to promote the use of renewable energy and reduce greenhouse gas emissions.

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios and geographic presence and the key growth strategies adopted by them over the last three to four years. Some of the key players operating in the anaerobic digestion systems market are Kanadevia Inova Group (A Part of Hitachi Zosen Corporation) (Switzerland), Evoqua Water Technologies Corp. (U.S.), EnviTec Biogas AG (Germany), Nature Energy Biogas A/S (A Part of Shell plc) (Denmark), Biokraft International AB (Sweden), VWS (UK) Ltd (A Part of Veolia Environnement) (U.K.), Renewi plc (U.K.), Capstone Green Energy Holdings, Inc. (U.S.), Bioenergy Devco, LLC (U.S.), PlanET Biogas Group GmbH (Germany), Biogen (UK) Ltd (U.K.), Agrinz Technologies GmbH (Austria), Zero Waste Energy, LLC (U.S.), Agraferm Technologies AG (Germany), Bioquadrat Energie- und Wassertechnik Holding GmbH (Austria), and AAT Abases- und Abfalltechnik GmbH (Austria).

Anaerobic Digestion Systems Industry Overview: Latest Developments from Key Industry Players

• In August 2023, Biogen (UK) Ltd. (U.K.) acquired five operational anaerobic digestion (AD) plants from Ingenious Capital Management Limited (U.K), an asset management company, to expand its AD portfolio in the UK to 19 facilities.
• April 2023, Nature Energy Biogas A/S (Denmark) partnered with Nordion Energy AB (Sweden) to boost biogas production in Sweden. The collaboration combines Nature Energy’s expertise in large-scale biogas facilities with Nordion Energy’s energy infrastructure capabilities to connect new biogas production to the grid.
• In July 2022, Evoqua Water Technologies Corp. (U.S.) acquired EPICOR, Inc. (U.S.), a leading manufacturer of high-quality powdered ion exchange resins and resin/fiber mixtures primarily serving the power industry.