This paper aims at evaluating the best allocation of potential biomethane generation for the decarbonization of the transport system, presenting a case study in Italy. The country has some peculiar features, such as several operating biogas plants, additional potential feedstock for biogas/biomethane generation, a well-developed natural gas network and established relevant natural gas uses in different final sectors, including transport. Based on current estimates for sustainable biomethane potential by 2030, ranging from 2.3 to 7.6 billion cubic meters depending on the scenario, the analysis compares technologies for the generation, distribution and final use of biomethane. The results of the analysis confirm the potential interesting contribution of biomethane in decarbonizing the Italian transport system: a billion cubic meters of biomethane can lead to 2.33–4.37 MtCO2e savings, depending on the feedstock mix and the application. On a national basis, annual climate emission savings in 2030 range from 10.0 to 26.7 MtCO2e, depending on the scenario. Additional 3.1–8.1 MtCO2e of emissions can be avoided if the CO2 captured during the biomethane upgrading can be stored or reused. The proposed methodology could be used to extend the analysis to other countries, and to the European context.