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nick_h.
This is a complicated lifecycle. Short answer to the methane question is yes.
In landfill, domestic compost or industrial composting without methane recovery, the organic matter breaks down and emits methane directly into the atmosphere. Methane holds around 20 times as much heat as CO2, so it is a much stronger greenhouse gas (GHG). It stays in the atmosphere for a few years until it breaks down into CO2, where it then sits in the atmosphere until it is reabsorbed by plants or the sea.
Industrial composting with methane recovery, like sewage processing, captures the methane from the process, cleans it up and uses it either for heat or power generation. It 'saves' you using some fossil fuels. The GHG benefit comes from less methane in the atmosphere and less fossil fuel used. The CO2 emitted by directly burning 1kg of this methane is about the same as burning 1kg of natural gas. The CO2 saving, therefore, is the difference between that minus the energy or CO2 you put in (or lost) to make the process work.
There is also the matter of what else you would do with the sheer tonnage of food waste generated by the population. If it can be separated out from domestic rubbish and diverted from landfill, as it is, it can be re-used instead of wasted. I'm pretty sure the leftovers from industrial composting, like cake from the sewage process, are then used for farm compost.