In the last couple of years waste disposal problems have become rather prominent. Regarding that this thesis will offer one solution to deal with the problem of household waste (biodegradable component) of the City of Zagreb by a biogas plant with biogas upgrading. The entire process of getting bio methane from bio waste will be explained in this thesis. The stages of getting biogas (hydrolysis, acidogenesis, acetogenesis and methanogenesis) will be explained first and the parameters which are key for the undisrupted production of biogas such as temperature, pH pressure, etc. will be briefly stated and explained. After that the components of the biogas plant will be listed and explained together with the means by which the produced biogas can be purified. In this thesis great attention shall be given to ways of upgrading biogas to increase the methane share above 95% share in the gas that is to say getting biomethane, possible methods of the utilization of the produced biomethane will also be described. In this case the produced biomethane will be used to power the city buses in Zagreb. In this thesis, quantity, types and composition of the available raw materials in the City of Zagreb which are suitable for anaerobic digestion will be analysed and according to that data the complete achievable energy potential will be calculated. According to the data a plant which is needed to process that quantity of the substrates that is the production of biomethane will be dimensioned and the case study of the plant for different cases will be shown to present the stability of the investment that is to check the conditions by which the investment will be cost-effective and to show what will happen in case the prices drop. At the end of the thesis an analysis of the reduction of the greenhouse gasses emission has been made and a favourable effect of the biogas plant on the eco system has been shown.