Nowadays, biogas system has been considered as a solution not only for creation of renewable energy but only for treatment of environmental problems. Currently, biogas system in Germany has been remarkably improved. So far, more than 2000 biogas plants have been installed in the country. Thus, the purpose of this study is to analysis the current situation of biogas system in Germany and then to find out the factors contributing to its deveropment. In Germany, biogas plants are mainly invested and managed by individual farmers, so the circulation of substances (e.g., slurry from livestock, food wastes and rubbish from field fermented→organic fertilizer used for grain →feed for livestock) is formed inside of their farms or in nearby areas. Thermal energy from biogas with CHP engine is used as a heat source to heat houses of those farmers or othe r houses in the district. In addition, electricity created from it is also used in the farm and the rest is sold to a local electric company. The factors contributing to an increase ni the bumber of biogas plants in Germany mainly are, (1) obligation of the electric companies to buy the electricity from renewabke energy at high price set by the government, (2) public programs of subsides and finance at low interest, (3) the polluter-pays principle, (4) the ecological tax, (5) the nuisances(i.e. bad smell etc.) caused by slurry, (6) the set-aside policy under the CAP reform (7) technical progress, and (8) cooperation in technical research among farmers, cmopanies and academic.