Biogas production from animal manure produced in farms in the Canary Islands may represent an additional energy source for producing heat and/or electricity. Data of different animal farms distributed all around the islands were used for evaluating the potential biogas generation and contribution to the production of renewable energy in the Canary Islands. Total manure production is 495,622 tons per year. Results show that animal manure as a source of biogas may be associated with an overall biogas potential of 27.1 Mm3 year−1 with an equivalent installed power capacity of 6.8 MWe. Considering 0.5 t day−1 manure as the lowest limit for implementing biogas projects, 546 farms raising different animal types (poultry, sheep, swine, cows or goats) have potential for producing and using their own biogas for generating heat and/or electricity with electrical powers ranging from 3 to 185 kWe. Potential GHG emissions savings due to the production of biogas from animal manure could reach yearly 55,745.1 tons of carbon dioxide equivalents, including both substitution of fossil fuels and appropriate management of animal manure. The application of appropriate policies described in this study should contribute to overcome main challenges identified for the development of the biogas industry in the Canary Islands, which are related to the small size of the livestock holdings, the lack of a culture of association in the livestock sector and the lack of specific subsidies for biogas production. This study could be used as a basis for further studies in other European outermost regions with similar characteristics to the Canary Islands, such as Madeira and Azores. Display omitted •Manure production on the Canary Islands amounts to 495,622 t year−1.•Potential biogas production is 27.1 millions of m3 year−1.•Biogas potential can contribute up to 14.6 toe year−1 and 6.8 MWe.•Potential electricity is 0.68% and 8.56% of total and renewable electricity of 2016.•Potential GHG emissions savings could reach 55,745.1 tCO2e year−1.