The increasing global population has led to a surge in waste production across various fields including agriculture, industry, marine, and household, posing significant waste management challenges. Concurrently, the world is facing an energy crisis, emphasizing the crucial need for sustainable and renewable energy sources. This comprehensive review examines the potential of biomethane production from diverse waste biomass. Feedstock characteristics; anaerobic digestion (AD); biochemical pathways; factors influencing AD; various pretreatment methods such as physical, chemical, biological, and combined; existing policies supporting biomethane production; and potential new policy implications are discussed in this review along with the significance of waste‐to‐energy integration. Our findings indicate that lignocellulosic wastes, primarily agricultural waste, stand out as the most efficient biomass source for biomethane production due to their characteristics such as high carbon/nitrogen ratio, low ash content, and their abundant availability. Among pretreatment methods, combined pretreatment emerges as the most promising option, offering flexibility and effectiveness in enhancing biomethane production. Additionally, the two‐stage digester configuration proves advantageous in overcoming limitations associated with single‐stage digesters such as pH inhibition. Altogether, the review highlights that biomethane production from waste biomass through AD offers a sustainable solution.