The environmental impacts and high long-term costs of poor waste disposal have pushed the industry to realize the potential of turning this problem into an economic and sustainable initiative. Anaerobic digestion and the production of biogas can provide an efficient means of meeting several objectives concerning energy, environmental, and waste management policy. Biogas contains methane (60%) and carbon dioxide (40%) as its principal constituent. Excluding methane, other gasses contained in biogas are considered as contaminants. Removal of these impurities, especially carbon dioxide, will increase the biogas quality for further use. Integrating biological processes into the bio-refinery that effectively consume carbon dioxide will become increasingly important. Such process integration could significantly improve the sustainability of the overall bio-refinery process. The biogas upgrading by utilization of carbon dioxide rather than removal of it is a suitable strategy in this direction. The present work is a critical review that summarizes state-of-the-art technologies for biogas upgrading with particular attention to the emerging biological methanation processes. It also discusses the future perspectives for overcoming the challenges associated with upgradation. While biogas offers a good substitution for fossil fuels, it still not a perfect solution for global greenhouse gas emissions and further research still needs to be conducted.