In this paper is proposed the use of biogas generated in the Wastewater Treatment Plant of a Dairy industry. The objective is to apply a thermoeconomic analysis to the supplementary cold water production of an absorption refrigeration system (NH3 + H2O) by the burning of such gas. The exergoeconomic analysis is carried out to allow a comparison between an absorption refrigeration system and of an equivalent compression refrigeration system that uses NH3 as work fluid. The proposed exergoeconomic model uses functional diagrams and allows one to obtain the exergetic incremental functions for each component individually and for the system as a whole. The model minimizes the exergetic manufacturing cost (EMC) which represents the cost of supplementary cold water production at 1degreesC (exergetic base) needed for this dairy's cold storage. As a conclusion, the absorption refrigeration system is better than compression refrigeration system, when the biogas cost is not considered. 2004 Elsevier Ltd. All rights reserved.