Just published: Policy pathways to advance Australia's biomethane sector: learning policy lessons from international jurisdictions as part of a project with Future Fuels CRC authored by UQ's Jennifer Yarnold, Hamish MacDonald, Belinda Wade and Jamin Wood.
As of 2025, Australia’s biogas industry is relatively small, and biomethane production is limited to just one demonstration plant in NSW and a few others are in development. However, recent policy reforms to incentivise biomethane production highlight a growing interest by government and industry in developing the sector. The Australian Carbon Credit Units (ACCU) scheme and its biomethane package has several methods through which biomethane producers can generate ACCUs, which can then be sold to buyers, including facilities regulated by the Safeguard Mechanism. However, these methods are limited to specific types of projects and activities, limiting their applicability across the broader industry.
Australia also has a voluntary certification scheme for biomethane - the GreenPower Renewable Gas Certification. While this scheme currently exists to support a voluntary market in renewable gas, amendments to the NGER scheme are expected to allow purchasers of certified gas to reduce their accounted scope 1 emissions, helping Safeguard Facilities meet their emissions reduction obligations. At the state level, NSW and Victoria have been pivotal in driving the development of biomethane incentives.
As at 2025, NSW hosts Australia’s only operating biomethane plant and is currently in the process of developing a Renewable Fuel Strategy and a Gas Roadmap. The NSW government is also considering adding biomethane as an eligible fuel for its Renewable Fuel Scheme. Victoria’s Gas Substitution Roadmap sets out a path for transitioning away from fossil gas use. The state is also exploring policy options to incentivise biomethane and has recently proposed a renewable gas obligation in its Renewable Gas Directions Paper.
This comprehensive report identifies the policy mechanisms, market structures, and financial instruments that have enabled growth in countries like Denmark, UK, Italy, US and Canada. It highlights key policy recommendations tailored for the Australian context, recognising that we may have the foundational pieces for a viable biomethane sector — but real progress will require targeted, coordinated action at both state and federal levels.
