Utilization of biomass fuels in general and fuelwood in particular were the main drivers of deforestation, emissions of greenhouse gases (GHG) and climate change. Even if the dissemination and usage of domestic biogas technology is still low in rural areas, it has recently been described as one of the most promising solutions to the problems of deforestation, rural energy supply and climate change mitigations. Accordingly, there are limited empirical evidences concerning to both its dissemination and the overall impacts of the technology. Thus, this study was carried out to examine the role of biogas technology in household energy saving and greenhouse gases (GHG) emission reductions. It employed a multi-stage sampling procedure involving a total of 148 sample biogas user and non-user households. To conduct the Kitchen performance test, 22 test subjects were chosen at random from each category. Both primary and secondary data collection methods were employed. For the analysis of the data both qualitative and quantitative techniques were utilized. Distance to main water source, distance to main fuelwood source, size of a household, and numbers of cattle owned were the major factors influencing households’ decisions on adoption of the technology. The most common energy source for domestic cooking and heating were fuelwood (40.6%), agricultural residues (25.4%), cow dung (22%), charcoal (7.1%), biogas (4.5 %), and kerosene (0.4%) respectively. Biogas conserves about 0.54 ha of forest from deforestation through the reduction of 161.257 tons of wood based fuels. From the use of one biogas plant substitutes an equivalent of 1350.5 kg of fuelwood, 182.5 kg of charcoal, 474.5 kg of crop residues, 1058.5 kg of cow dung, and 25.6 L of kerosene. In addition from efficient manure management system, the technology reduces 9.8 tons of CO e per biogas plant per year. Accordingly, from all studied functional biogas plants about 723 tons of CO 2 e were avoided from being emitted into to the atmosphere annually. Generally, the biogas plant was found to be a promising technology for rural energy mix, rural energy security, substitution of biomass energy, forest conservation, and climate change mitigation. For further dissemination and sustainability of the benefit of biogas, the government should address biogas extension workers reaches down to kebele level and provide financial incentives for carbon reduction potentials of biogas users. 2