In the field of biogas upgrading, there are five conventional technologies used for CO₂ removal, namely, water scrubbing, chemical and physical scrubbing, membranes and Pressure swing adsorption. The present study aims to introduce an additional method for CO₂ removal. On this basis, a process of low-temperature CO₂ liquefaction and separating from CH₄/CO₂ mixture is proposed as an alternative to the conventional upgrading technologies. The process simulation is done by Aspen HYSYS software which is a conventional chemical process simulator. In the system, four-stage compression, two low-temperature distillation columns, auxiliary refrigeration cascade cycle, expander and sufficient internal heat recovery are adopted. Installing Expander and internal heat recovery in the process can reduce the total energy penalty by 30%. with avoiding the occurrence of CO₂ freeze-out, the process can achieve a reduction of CO₂ concentration from 40% (mol) in raw biogas mixture to 2.9% (mol) in the upgraded biogas to meet the specification for pipeline transport or vehicle fuel (typically 2–3% CO₂). Moreover, the total energy consumption is only 0.25 kWh/Nm³raw biogas with over 99.9% (mol) CO₂ purity captured and produced in liquid form as a by-product for transport. Further studies are performed to show the effect of varying CO₂ concentration in the feed and the capacity of the plant on different process variables. It is concluded that the system can serve as a new promising approach for CO₂ removal to upgrade biogas with low energy penalty.