Danish farmers are increasingly adopting sand bedding within their dairy farms, which is creating challenges for biogas plants, as sand-laden manure hampers biogas production. This creates a potential problem where large amounts of animal manure will not be utilized for biogas production, and, correspondingly, will not contribute to the production of either renewable energy or valuable digestate (fertilizer). Moreover, the pressure on an imported (external) and highly exploited resource - here, sand - is increasingly calling for more sustainable and self-sustained farm systems, as far as cow bedding materials are concerned. The methodological approach in this paper is first to investigate state-of-the-art sand-separation technologies in Denmark and the USA, particularly in relation to their environmental and energy performance, then, second, to analyze how other types of bedding materials can be utilized by drawing on on-site (internal) farm resources, namely residual straw and the fiber fraction of manure. The results of the analysis suggest that, in particular, manure fibers are beneficial for animal welfare and biogas production, resulting in a more circular economic system. The paper concludes by presenting a new farm-biogas system that sustains such circularity. To support this development, we further suggest investigating in new ventilation technology to limit the amount of ammonia that is produced in dairy stables as a result of using manure fibers as bedding material.