Biogas is efficient renewable energy source concerning greenhouse gases emission (GHG) reduction and waste disposal. The most abundant biogas substrates are originating from agriculture, i.e., energy plants and wastes such as manure, and respective production and utilization can be used to support rural development. Defining sustainable potentials, i.e., realistic value under defined conditions, of biogas production in some geographical region is important, as a background for policy development on a national, regional, and even local level. The objective of the study was defying method for its assessment. The characteristics of the proposed method are as follows: (1) biogas potential is expressed in electric power of cogeneration units that can operate with biogas produced from available feedstock. Available thermal energy, or biomethane production, can be calculated based on biogas potential; (2) the determined sustainable potential is based on environmental, technological, and socio-economic criteria; (3) the assessment is related to the actual substrates’ availability, whereby expected technological advancements are considered. Developed method has been tested in the form of a case study for Serbia and obtained outcomes compared with studies previously done by other authors. The potential is lower than previously assessed. The forecasted technology advancements and reduction of specific investment costs in the future can contribute to the increase of potential, higher share of wastes and by-products in substrates. New, smaller biogas plants would be constructed in undeveloped regions, what could contribute to rural development.