In this study, various methanotroph co-cultures were designed to enhance methanol production from biogas produced through the anaerobic digestion of wheat straw (WS). Furthermore, whole-cell immobilization was performed using magnetic nanoparticle (MNP)-loaded polymers to develop an efficient bioprocess. The anaerobic digestion of WS by cattle dung yielded 219 L/kg of total solids reduced. Methanol produced was 5.08 and 6.39 mmol/L by pure- and co-cultures from biogas, respectively. The optimization of process parameters enhanced methanol production to 6.82 mmol/L by co-culturing Mithylosinus sporium and Methylocella tundrae. The immobilized co-culture within the MNP-doped polymers exhibited much higher cumulative methanol of up to 70.74 mmol/L than the production of 22.34 mmol/L by free cells after ten cycles of reuse. This study suggests that MNP-doped polymer-based immobilization of methanotrophs is a unique approach for producing renewable fuels from biomass-derived biogas, a greenhouse gas.