Biomethane is emerging as a strategic enabler of the energy transition, particularly for hard-to-abate sectors such as heavy manufacturing and high-heat processing.
In Australia, this role is becoming increasingly critical as pressure on domestic gas supply increases, and policymakers look for pathways to maintain industrial capability while reducing emissions.
Biogas Processes
Biogas and biomethane transform waste management into energy production. This is achieved by collecting organic waste, such as food scraps, animal manure, agricultural residues and wastewater, and processing it in an anaerobic digester.
Within this system, naturally occurring bacteria break down the waste into biogas, which is then cleaned and upgraded into biomethane.
This renewable, domestically sourced gas can be used as a circular energy source for heating and powering industries and communities, linking waste recovery directly to energy supply.
Solutions for High-Heat Industries
Many industries are facing increasing challenges where being powered exclusively by electrification can build a technical or economic wall in processes requiring intense heat. The gas industry faces a significant risk of stranding their existing assets as conventional fossil fuels are phased out.
This challenge is particularly acute in Australia, where industrial sectors remain heavily dependent on gas for high-temperature processes and viable electrification alternatives are still limited.
Biomethane can address these constraints head on by becoming a drop-in substitute for natural gas. As an upgraded form of biogas that is chemically identical to conventional gas, it can be injected into existing pipelines and used in current industrial appliances without any modification.
This not only utilises billions of dollars worth of existing infrastructure but also avoids the need for costly, time-consuming system overhauls.
Economic Impact and National Energy Security
Beyond decarbonisation, biomethane is increasingly positioned as a lever for energy sovereignty. Produced from domestic waste streams, it reduces exposure to global fuel markets and strengthens supply resilience.
The International Energy Agency (IEA) highlights that biogases enhance energy security by enabling local, dispatchable energy production from organic waste.
In Australia, this opportunity is material. Analysis indicates that approximately 400 petajoules of biomethane could be recovered annually from existing waste streams, representing a significant potential contribution to east coast gas supply.
Alongside strengthening energy resilience, the development of a waste-to-value bioenergy sector also presents broader economic benefits. National roadmaps indicate the potential to support more than 26,000 jobs, particularly in regional areas where feedstock is concentrated.
Navigating Economic and Feedstock Realities
But like any major energy transition, there are limitations. Sustainable feedstock is finite, and while average costs are projected to fall by around 20% by 2050, biomethane currently remains more expensive to produce than conventional gas.
However, Australia is relatively well-positioned compared to many markets due to its strong agricultural base and access to diverse organic waste streams. This creates a stable feedstock foundation for scaling production.
Unlocking this opportunity will depend less on technology readiness and more on system coordination. Connecting dispersed feedstock sources to existing energy networks, alongside supportive policy settings, will be critical to enabling early market development and long-term viability.
It’s a complex but necessary shift, particularly for gas-reliant industries. Delivering it will require a system-level approach, effectively bridging regional waste streams with existing energy infrastructure to enable scalable and economically viable deployment.
A Role for Existing Infrastructure in a Decarbonised System
By repurposing traditional gas assets to support grid firming and energy storage, existing networks remain a critical pathway for integrating renewable molecules into the energy system.
Biomethane is not a future concept; it is a present, deployable solution that aligns with Australia’s infrastructure, regional economies, and energy security priorities.
Given constraints around feedstock and cost, its role will not be to fully replace natural gas. But it will have the capacity to strengthen the system, integrate with existing infrastructure to support reliability, maintain industrial continuity, and enable a more resilient and flexible energy mix.
References
International Energy Agency (2025),
Outlook for Biogas and Biomethane Energy Networks Australia (2025),
Biomethane Opportunities to Decarbonise Australian Industry Bioenergy Australia (2025),
Australia’s Bioenergy Roadmap Australian Government (2024),
Future Gas Strategy Bioenergy Australia (2023). Economic Impact of Bioenergy
