Biomethane in Australia Starts on Demand for RNG & Low Carbon Transport Fuel

Biomethane in Australia has moved beyond the starting line. When this article was first published, the country’s first full-scale biomethane injection project was under construction at Malabar in Sydney. That plant is now operating, Australia has introduced renewable gas certification, and several larger projects are progressing in New South Wales and South Australia.

Australia is not yet producing biomethane on anything approaching the scale achieved in parts of Europe or North America. Nevertheless, the change since 2022 is significant.

The emerging project pipeline now includes:

• biomethane produced from wastewater sludge and injected into a gas distribution network;
• commercial and industrial food waste converted into grid-quality renewable gas;
• piggery effluent used to produce agricultural renewable natural gas;
• dedicated biomethane supply for high-temperature industrial heat; and
• a certificate system that allows industrial customers to support renewable gas production without receiving the same physical gas molecules.

The Australian biomethane market is therefore beginning to develop around practical uses for which direct electrification can be difficult, particularly industrial heat and parts of the existing gas system.

Originally published in May 2022. Completely rewritten and updated in September 2026 to reflect operating, funded and proposed Australian biomethane projects.

Biomethane in Australia: Projects at a Glance

Project status and expected production can change. An announcement, grant award or development timetable should not be treated as operating capacity until the plant has been commissioned and is producing gas.

What Is Biomethane?

Biomethane is a methane-rich renewable gas most commonly produced by upgrading biogas from an anaerobic digestion process.

Organic material such as food waste, manure, crop residues or wastewater sludge is broken down by microorganisms in the absence of oxygen. This produces raw biogas containing methane, carbon dioxide, water vapour, hydrogen sulphide and other trace constituents.

An upgrading plant removes enough carbon dioxide, water and contaminants to produce gas meeting the specification required for its intended use.

Upgraded biomethane can potentially be:

• injected into a gas distribution or transmission network;
• supplied through a dedicated pipeline to an industrial customer;
• compressed as renewable compressed natural gas;
• liquefied to produce bio-LNG or liquefied renewable natural gas; or
• used on or close to the production site.

In Australia, the terms biomethane and renewable natural gas, usually shortened to RNG, are both used. In this article, RNG refers to methane produced from renewable biological sources rather than synthetic methane made from renewable hydrogen and captured carbon dioxide.

Why Biomethane Could Be Useful in Australia

Australia has abundant wind and solar resources, and renewable electricity will perform much of the work involved in decarbonising the energy system. That does not mean every existing gas use can be electrified immediately or economically.

Some industrial processes require high-temperature heat, continuous energy availability or equipment that would be expensive to replace. Biomethane can be chemically and operationally similar to fossil natural gas when it is upgraded to the required specification.

Potential advantages include:

• using existing gas infrastructure;
• supplying dispatchable energy rather than weather-dependent generation;
• decarbonising selected industrial heat applications;
• capturing methane that might otherwise escape from waste or manure;
• diverting food and other organic wastes from landfill;
• improving management of agricultural residues and effluents;
• creating useful digestate or recovered nutrient products; and
• supporting regional energy production and employment.

However, biomethane is not automatically sustainable or carbon neutral. Its climate performance depends on the feedstock, alternative waste-management route, plant energy use, transport distances, digestate management and, crucially, control of methane leakage.

Malabar: Australia’s First Biomethane Grid-Injection Plant

The Malabar Biomethane Injection Plant is located beside Sydney Water’s Malabar Water Resource Recovery Facility in south-east Sydney.

Jemena developed the project in partnership with Sydney Water and with financial support from the Australian Renewable Energy Agency, usually known as ARENA.

The existing wastewater-treatment process already produced biogas through anaerobic digestion. The Malabar project added the equipment required to clean and upgrade some of that biogas to the quality needed for injection into Jemena’s New South Wales gas network.

GreenPower now lists Malabar as an accredited renewable gas producer with an annual capacity of approximately 95,000 gigajoules. It records a production-process emissions intensity of 5.26 kgCO₂e per GJ.

Malabar is important not because it will transform Australia’s entire gas supply by itself, but because it has demonstrated a complete chain:

1. produce biogas from an existing organic residue;
2. upgrade it to the applicable network specification;
3. manage gas quality and off-specification production;
4. connect to an operating gas network;
5. measure the renewable gas injected; and
6. support certified commercial claims by gas customers.

It changed Australian biomethane from a largely theoretical opportunity into an operating gas-network project.

Engineering Lessons from the Malabar Project

The value of a first-of-a-kind project lies partly in the difficulties it uncovers.

ARENA has published the Malabar Biomethane Injection Project commissioning report. Its findings contain useful warnings for future developers.

Hydrogen sulphide introduced additional safety requirements

Hydrogen sulphide is toxic, corrosive and potentially fatal at high concentrations. Although familiar to experienced biogas engineers, it may be a new hazard to teams whose previous work has concentrated on conventional gas-network infrastructure.

The Malabar project required additional hazard and operability studies, consolidation of safety documentation and independent reviews. Future developments should identify biogas-specific hazards from the outset rather than add them late in design or commissioning.

Imported equipment must meet Australian requirements

Overseas equipment packages can bring proven biomethane-upgrading technology to Australia. They can also create difficulties when specifications, electrical systems, certification or documentation do not align fully with Australian standards and project requirements.

The Malabar experience showed the value of early quality assurance, design review and verification before equipment reaches the site. Rework during commissioning is usually more expensive and disruptive than resolving the same issue during procurement.

Biogas quantity and quality are variable

Raw biogas is not a perfectly uniform industrial gas. Changes in wastewater loading, digester biology and upstream operation can alter both production rate and contaminant concentration.

At Malabar, this variability affected gas forecasting and the frequency with which activated-carbon media needed replacement. Future projects should avoid basing operating costs on a small number of idealised gas analyses.

Off-specification gas needs a safe destination

A biomethane plant will not produce on-specification gas continuously from the first moment of commissioning. Start-up, shutdown, equipment faults and changing raw-gas conditions can all produce gas that cannot be injected.

The destination of off-specification gas must therefore be designed into the project. Malabar used a phased commissioning strategy and temporary flaring arrangements while systems were proved.

Stakeholder coordination must begin early

A grid-injection project involves the AD or wastewater operator, upgrading contractor, network owner, regulators, safety specialists, electricity suppliers and potentially certificate administrators and gas customers.

The interfaces between these parties can be as important as the individual equipment packages. Responsibilities for gas quality, shutdown signals, metering, pressure control and off-specification gas need to be unambiguous.

SA1 Salisbury Bioenergy Plant

Delorean Corporation’s SA1 Salisbury Bioenergy Plant in South Australia is intended to process commercial and industrial food waste and upgrade the resulting biogas to biomethane.

According to GreenPower’s accredited-project information, the plant is expected to have an annual biomethane capacity of approximately 180,000 GJ, with first renewable gas production expected in the fourth quarter of 2026.

The planned outputs include:

• grid-quality biomethane;
• biogenic carbon dioxide separated during gas upgrading; and
• digestate for beneficial use.

The project illustrates how Australian biomethane production can combine organic-waste treatment, renewable gas, carbon dioxide recovery and nutrient recycling.

It is important, however, to maintain the distinction between accreditation or expected production and confirmed routine operation. Until commissioning and gas injection have occurred, Salisbury should be described as an expected 2026 producer rather than an operating plant.

Wasleys: Agricultural Renewable Natural Gas from Piggery Effluent

The Wasleys Renewable Natural Gas Facility is being developed in South Australia by Helmont Energy with LMS Energy and SunPork Group.

ARENA describes it as Australia’s first commercial-scale agricultural renewable natural gas facility.

The project is intended to capture piggery effluent that would otherwise be a significant source of methane emissions. Anaerobic digestion will produce biogas, which will be upgraded to pipeline-quality RNG.

The project has several potential benefits:

• reducing uncontrolled methane emissions from piggery effluent;
• lowering SunPork’s direct greenhouse gas emissions;
• demonstrating biomethane production from an agricultural residue;
• developing gas-network and certification pathways;
• producing dispatchable renewable energy; and
• creating a model that could be applied at other large livestock operations.

This is potentially a particularly strong use of anaerobic digestion. Where methane would otherwise escape from an uncovered effluent pond, capturing and using it can avoid those emissions while also replacing some fossil gas.

The climate benefit will still depend on effective gas capture, leakage control and responsible digestate or effluent management.

Horsley Park: Supplying Renewable Gas Directly to Industry

The Horsley Park Bioenergy Project in Western Sydney demonstrates a different commercial model.

Rather than depending solely on general gas-network demand, the planned facility has an identified industrial customer: Brickworks’ Austral Bricks plant.

The proposed anaerobic digestion facility would:

• process approximately 120,000 tonnes of organic waste annually;
• upgrade the resulting biogas to biomethane;
• deliver approximately 253,161 GJ of biomethane each year through a dedicated pipeline; and
• reduce the brick kiln’s direct emissions from natural gas combustion by approximately 50%.

Potential feedstocks include commercial, agricultural and industrial organics, with the possibility of accepting separately collected food organics or combined food and garden organics.

This behind-the-meter or dedicated-supply model can avoid some of the commercial difficulties associated with selling small quantities of biomethane into a large general gas market. The project has a defined customer, a defined use and a direct emissions-reduction purpose.

It also highlights a potentially important role for Australian biomethane: replacing fossil gas in industrial processes where high-temperature electrification may be difficult, slow or costly.

Grid Injection Versus Dedicated Industrial Supply

Not every Australian biomethane plant needs to inject into a public gas network.

There are three principal supply models.

1. Gas-network injection

Biomethane is upgraded, compressed, metered and injected into a gas network. Customers elsewhere on that interconnected system can support the production through contractual and certificate arrangements.

Advantages include access to existing storage and distribution infrastructure and a larger potential customer base.

Challenges include:

• distance to a suitable pipeline;
• connection cost;
• minimum and maximum network pressure;
• gas-quality requirements;
• odorisation and metering;
• network capacity and reverse-flow constraints; and
• the commercial terms offered for injection.

2. Dedicated pipeline or behind-the-meter supply

A plant supplies biomethane directly to a nearby industrial user.

This can create a clearer link between production and demand and may suit factories requiring continuous process heat. It does, however, leave the project dependent on the requirements and long-term commitment of a particular customer.

3. Compressed or liquefied renewable gas

Biomethane can be compressed or liquefied and transported by road when pipeline connection is unavailable. This may serve remote industrial users or vehicle-fuel markets.

Compression, liquefaction and road transport consume energy and add cost. The commercial case depends on scale, distance and the value of the fuel being displaced.

Australian Renewable Gas Certification

Physical gas molecules become mixed after biomethane enters a gas network. A customer cannot direct particular renewable methane molecules through the pipeline to its premises.

Australia therefore needs a reliable accounting system that links renewable production with customer claims.

GreenPower’s Renewable Gas Certification is intended to support a voluntary renewable gas market. It enables commercial and industrial customers to match gas consumption with certificates representing accredited renewable gas that has displaced fossil natural gas in Australia.

In simplified terms:

1. an accredited producer injects or supplies a verified quantity of renewable gas;
2. the renewable attributes of that production are recorded;
3. certificates can be transferred to participating gas customers; and
4. the certificates are surrendered so that the same renewable attribute is not claimed repeatedly.

This is sometimes called a “book and claim” approach. The customer may consume a mixture of gases physically delivered through the network, while the certificate provides the auditable connection to renewable gas production elsewhere.

A credible certificate system must address:

• accurate metering;
• project accreditation;
• production emissions;
• ownership of environmental attributes;
• certificate creation and transfer;
• retirement or surrender of certificates; and
• prevention of double counting.

Certification can improve access to geographically dispersed industrial customers. It does not, by itself, make an uneconomic production project commercially viable, but it provides a mechanism through which the renewable attribute can acquire value.

New South Wales Renewable Gas Production Support

In 2026, the New South Wales Government launched a $40 million Renewable Gas Production Program.

The programme is intended to support commercial biomethane facilities and associated infrastructure in New South Wales.

Its stated aims include:

• expanding the biomethane market;
• supporting large-scale gas-network injection;
• reducing emissions from industrial gas use;
• improving fuel security and economic resilience;
• developing feedstock and connection infrastructure; and
• reducing the cost of renewable gas.

Projects seeking support were required to plan for at least 0.1 PJ of annual biomethane production and injection into the NSW gas network by 30 June 2030. Applicants also needed substantial co-investment and evidence of arrangements with feedstock suppliers, network businesses and industrial customers.

The programme indicates that New South Wales is treating biomethane as more than an experimental technology. It is attempting to build a commercial supply chain linking organic feedstocks, production plants, pipelines, certification and industrial demand.

How Much Biomethane Could Australia Produce?

Published estimates of Australia’s potential vary enormously.

ARENA’s information for the Wasleys project notes that five major studies completed since 2017 have produced estimates ranging from approximately 371 PJ to 2,600 PJ.

Such a wide range should not be presented as a reliable production forecast.

Technical resource estimates may include feedstocks that are:

• widely dispersed;
• seasonal;
• already used for another purpose;
• too far from a viable energy customer;
• expensive to collect;
• difficult to digest;
• subject to contamination; or
• located far from gas infrastructure.

The theoretical energy content of Australia’s organic residues is therefore much larger than the amount likely to become commercially recoverable biomethane.

A realistic assessment must consider:

• collectable feedstock quantity;
• feedstock gate fees or purchase costs;
• transport distance;
• seasonal variation;
• biogas yield;
• plant scale;
• proximity to a gas network or industrial customer;
• digestate outlets;
• planning and environmental approvals;
• methane leakage;
• certificate and carbon value; and
• the long-term price paid for the gas.

Australia plainly has a substantial resource. The question is how much of it can be aggregated, converted and sold at a price that supports investment.

Australia’s Most Promising Biomethane Feedstocks

Wastewater sludge

Large wastewater facilities already use anaerobic digestion and may already produce biogas. Adding upgrading equipment can be less complex than developing an entirely new feedstock and digestion system.

Malabar demonstrates this route. Suitable opportunities will depend on existing biogas use, plant scale, gas quality and proximity to a network or customer.

Food and commercial organic waste

Commercial food waste can produce relatively high biogas yields and may carry a gate fee because it requires treatment. The challenges include contamination, depackaging, feedstock variability and competition for secure waste contracts.

Removal of plastic and other packaging matters because contaminants do not disappear in the digester. They can affect equipment, digestate quality and agricultural outlets.

Piggery and other livestock effluents

Livestock effluents can provide a strong methane-abatement case where they would otherwise be stored under methane-producing conditions.

They are generally relatively dilute, however, and may have a lower gas yield per tonne than food waste. Commercial success often depends on using large, concentrated feedstock sources and minimising transport.

Agricultural residues

Australia produces large quantities of agricultural residues, but resource estimates must distinguish material theoretically produced from material that can be collected without causing soil, economic or logistical problems.

Some residues already have value as animal feed, bedding, soil cover or organic-matter replacement. Removing too much material can transfer nutrients and carbon away from agricultural land.

Landfill gas

Landfill gas can also be upgraded to renewable natural gas where flow, methane concentration, contamination and project life justify the investment.

It is not conventional digester gas, and its trace contaminants and declining long-term production profile require separate evaluation.

Could Biomethane Fuel Australian Trucks?

Biomethane can be compressed or liquefied for use in suitably equipped heavy vehicles. It may offer a route to reducing fossil diesel consumption in fleets where battery-electric or hydrogen alternatives are not yet practical.

However, the current Australian project pipeline is being led principally by gas-network injection and industrial heat rather than road transport.

A transport-fuel project would need:

• vehicles designed or converted for the fuel;
• reliable refuelling infrastructure;
• sufficient fleet demand;
• long-term fuel contracts;
• gas compression or liquefaction equipment;
• appropriate safety systems; and
• credible lifecycle-emissions accounting.

Transport remains a possible market, but it should not be presented as the inevitable destination for Australian biomethane.

Biomethane Versus Biogas Electricity Generation

Many established Australian biogas plants use combined heat and power engines to generate electricity and useful heat.

Upgrading biogas to biomethane is not automatically superior. The best use depends on the site.

Combined heat and power may remain attractive when:

• the plant has a substantial and continuous on-site electricity demand;
• useful heat can be recovered;
• the gas network is remote;
• grid injection would require an expensive connection; or
• the existing engine has significant remaining life.

Biomethane production may be attractive when:

• there is a suitable gas network nearby;
• a high-value industrial customer requires gas;
• electricity export is constrained or poorly rewarded;
• most engine heat would otherwise be wasted;
• renewable gas certificates add value; or
• the gas can replace a difficult-to-electrify fossil use.

The appropriate comparison is not simply engine efficiency against upgrading efficiency. It must consider the value and destination of every unit of electricity, heat and gas produced.

Barriers to Biomethane Production in Australia

High first-project costs

Gas upgrading, compression, grid connection, metering, control, analysis and off-specification gas management add substantial capital cost. Early projects also bear engineering and regulatory costs that later developments may avoid.

Distance between feedstock and infrastructure

Australia’s size is a major constraint. Feedstocks may be plentiful but scattered across large rural areas, while gas networks and major industrial customers are concentrated elsewhere.

Uncertain long-term revenue

Projects need confidence in the combined value of gas, gate fees, certificates, carbon benefits, biogenic carbon dioxide and digestate. Short-term grants cannot substitute for a durable operating revenue model.

Connection and gas-quality requirements

Every injection project must satisfy the receiving network’s requirements for gas composition, pressure, measurement, control and safety. These requirements can affect both equipment cost and operating flexibility.

Feedstock competition and contamination

Waste contracts, contamination and alternative uses can determine whether a project has a secure long-term supply. A technically sound digester cannot compensate for an unreliable or unsuitable feedstock strategy.

Digestate management

A large proportion of the incoming material remains after digestion. Every project therefore needs sufficient storage and lawful, dependable outlets for digestate or other residues.

As discussed in our guide to digestate management planning, the outlet should be established before feedstock contracts are finalised.

Methane leakage

Methane leakage can erode the climate advantage of biomethane because methane is a powerful greenhouse gas. Leak detection, enclosed process design, appropriate vent treatment and effective maintenance are therefore central to environmental performance.

What Australia Can Learn from Established Biomethane Markets

European experience shows that biomethane growth requires more than AD technology.

Successful markets generally combine:

• clear gas-quality and grid-connection rules;
• transparent allocation of connection costs;
• long-term revenue certainty;
• sustainability and emissions accounting;
• credible renewable gas certificates;
• methane-leakage control;
• planning support;
• reliable feedstock standards; and
• workable rules for digestate use.

Australia has an opportunity to apply these lessons without copying every European policy. Its geography, agriculture, gas networks, industrial demand and waste-management systems require locally appropriate solutions.

The strongest Australian projects are likely to be those that begin with a specific problem:

• methane escaping from a large livestock effluent source;
• food waste requiring diversion from landfill;
• unused biogas at a wastewater plant;
• a constrained electricity export connection; or
• an industrial customer unable to electrify its process heat economically.

Biomethane then becomes part of an integrated solution rather than a production target searching for a market.

Australian Biomethane Outlook to 2030

Australia is unlikely to move from one operating injection plant to hundreds of large plants overnight. Development times, finance, feedstock contracting, approvals and network connections make that improbable.

A more credible outlook is gradual growth around several replicable models:

• upgrading biogas at major wastewater-treatment facilities;
• large food-waste AD plants close to gas networks;
• agricultural RNG at concentrated livestock operations;
• dedicated supply to high-temperature industrial users; and
• renewable gas certificates connecting production with corporate demand.

The next test will not be the number of projects announced. It will be how many reach commissioning, maintain reliable production, control methane emissions and secure long-term customers.

Malabar has already demonstrated that Australian gas-grid injection is technically achievable. Salisbury, Wasleys and Horsley Park could show whether the sector can be replicated across different feedstocks and commercial models.

Frequently Asked Questions

Does Australia produce biomethane?

Yes. The Malabar Biomethane Injection Plant in New South Wales is operating and injecting wastewater-derived biomethane into Jemena’s gas network.

What was Australia’s first biomethane grid-injection project?

The Malabar Biomethane Injection Plant in Sydney was Australia’s first project to upgrade biogas and inject biomethane into an operating gas distribution network at scale.

How much biomethane does Malabar produce?

GreenPower lists the Malabar plant with an annual capacity of approximately 95,000 GJ. Actual production in any period may differ from nameplate or accredited capacity.

Are there other biomethane plants in Australia?

Additional facilities are under development. These include SA1 Salisbury, the Wasleys agricultural RNG project and the Horsley Park industrial biomethane project. Their status and expected completion dates differ, so they should not all be described as operating plants.

What is renewable natural gas in Australia?

Renewable natural gas, or RNG, usually means methane produced from renewable biological materials and upgraded so it can replace fossil natural gas. In many contexts, it is another name for biomethane.

Can biomethane be injected into Australian gas networks?

Yes, provided the gas meets the receiving network’s specifications and the project satisfies all connection, metering, safety and regulatory requirements. Malabar has demonstrated network injection in New South Wales.

Can Australian businesses buy renewable gas certificates?

GreenPower’s Renewable Gas Certification enables participating commercial and industrial users to match gas consumption with certificates representing accredited renewable gas that displaces fossil natural gas in Australia.

Is biomethane carbon neutral?

It should not automatically be described as carbon neutral. Its lifecycle emissions depend on feedstock, avoided methane emissions, plant energy, transport, leakage, digestate management and the fossil fuel displaced.

What are the best Australian biomethane feedstocks?

Promising sources include wastewater sludge, food waste, livestock effluents and some agricultural residues. Commercial viability depends on concentration, collection cost, gas yield, contamination and proximity to a customer or gas network.

Could biomethane replace all Australian natural gas?

No responsible forecast supports assuming complete replacement. Technical resource estimates are large but vary widely, and much of the theoretical feedstock resource will not be commercially recoverable. Biomethane is more realistically viewed as one part of a wider decarbonisation strategy.

Is biomethane better than electrification?

Not in every application. Electrification will often be more efficient. Biomethane may be particularly valuable where direct electrification is technically difficult, where existing biogas is underused or where methane emissions from waste can be captured.

Conclusion: Australia Has Started Building a Biomethane Industry

Australia’s biomethane sector is still small, but it is no longer accurate to describe it as merely preparing its first project.

Malabar is operating. Renewable gas certification is available. Salisbury is expected to add food-waste biomethane, Wasleys is intended to demonstrate commercial agricultural RNG, and Horsley Park is designed around direct industrial decarbonisation.

Together, these projects test four of Australia’s most promising routes:

• wastewater biogas upgrading;
• food-waste digestion;
• methane capture from agricultural effluent; and
• dedicated renewable gas for industrial heat.

The size of the future industry will depend less on theoretical national feedstock totals than on finding viable combinations of feedstock, plant location, gas customer, infrastructure, certification and digestate outlet.

If those elements are assembled—and methane leakage is kept under control—biomethane can become a useful part of Australia’s renewable energy and circular-economy system.

This article provides general information and project statuses can change. Developers and investors should verify current project, regulatory, grant and certification information with the responsible Australian organisations.

[Published May 2022. Updated and rewritten September 2026.]