In 2020, the EU produced approximately 32 TWh of biomethane, underscoring the need for a significant increase in gas production capacities - by 11.6 times in 2030, which provides a relatively short period of time. In Latvia, there is a considerable untapped potential for biomethane production, with no officially recorded production or grid injection into the interconnected gas system until 2024. Looking ahead to 2033, there is an opportunity to replace some natural gas consumption with biomethane, depending on national demand. While biogas plants are well-distributed across Latvia's natural gas system, increase in biomethane production is necessary. This study aims to examine the political and regulatory conditions in Latvia, the current status of biomethane development, and potential opportunities to reduce barriers to market growth through regulatory analysis. The study explores general rules, quality requirements, and the connection types for biomethane production plants (off-grid and distinguishing between direct connections and virtual connections where gas is transported to system by using vehicle). Biomethane can substitute natural gas in electricity production, heating and transport sectors. Additionally, this research highlights the importance of a long-term vision and strategic support to accelerate biomethane production in the future. © 2024 IEEE.