This study examined anaerobic co-digestion (AcoD) and separate anaerobic digestion (SAD) treatments to explore the best kitchen waste (KW) and excess sludge (ES) resource utilization schemes for biomethane conversion. We developed a multi-objective mathematical model to optimize the process, and technology and policy factors were considered to maximize biomethane production and profit generation. The proposed methodology was then applied to a real-life case to demonstrate its practicality and efficiency, and scenario analyses were conducted under four different KW and ES mixing ratios to generate practical waste recovery and biomethane conversion suggestions. We demonstrated that anaerobic digestion technology coupled with suitable government policy support could significantly improve the KW and ES recovery efficiency. We found that AcoD was superior to SAD, and a 1:2 mixing ratio achieved the best biomethane conversion and economic benefits.