Australia Biomethane Market is Expected to Reach US$ 180.59 Million by 2026-2034

Australia Biomethane Market Overview

According to IMARC Group's latest research report, the Australia biomethane market size was valued at USD 180.59 Million in 2025 and is projected to reach USD 539.95 Million by 2034, growing at a compound annual growth rate of 12.94% from 2026-2034. The market is driven by the NSW Government allocating AUD 40 million to the Renewable Gas Production Program for commercial biomethane facilities, the Future Made in Australia (Guarantee of Origin) Act 2024 commencing in November 2025 with consultations to extend coverage to biogas and biomethane, approximately 400 PJ per year of biomethane recoverable from existing feedstocks, the Optimal Renewable Gas Griffith Biohub receiving AUD 20 million to process 100,000 tons of organic waste, and NSW expanding the Renewable Fuel Scheme to include tradable biomethane certificates from 2028.

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Australia Biomethane Market Summary

• Australia's biomethane sector is entering a transformative growth phase, with approximately 400 petajoules per year of biomethane potentially recoverable from existing feedstocks according to Energy Networks Australia's July 2025 study. This represents a substantial untapped resource base spanning agricultural waste, animal manure, sewage sludge, food waste, and energy crops across the country's vast agricultural and urban landscapes. The sector currently has fewer than ten operational biomethane plants injecting gas into the network, indicating significant headroom for expansion.

• The NSW Government has established the most comprehensive policy framework for biomethane development, allocating AUD 40 million to the Renewable Gas Production Program supporting commercial biomethane production facilities capable of producing a minimum 0.1 petajoules per year and injecting into the NSW gas network by June 2030. The broader NSW Renewable Fuel Strategy provides up to AUD 130 million through the Net Zero Manufacturing Initiative and AUD 40 million under the Industrial Decarbonisation Initiative to support renewable fuel production.

• The Future Made in Australia (Guarantee of Origin) Act 2024 commenced in November 2025, establishing a voluntary framework for emissions accounting and certification of renewable energy. The government is consulting on extending the GO scheme to cover biogas and biomethane produced via anaerobic digestion, with the consultation period open until April 2026. This certification framework will create a standardized mechanism for tracking and trading renewable gas attributes, providing the market transparency needed to support investment decisions.

• NSW expanded its Renewable Fuel Scheme in November 2025 to include biomethane, establishing that from 2028, producers will be able to generate tradable certificates for every gigajoule of biomethane produced. This certificate trading mechanism creates a financial incentive structure that supports project commercial viability, providing revenue certainty that complements gas sales income and strengthens the business case for biomethane facility investment across the state.

• Optimal Renewable Gas received AUD 20 million from the NSW Government to accelerate development of its Griffith Biohub in the Riverina region. This circular economy project uses anaerobic digestion technology to convert agricultural organic waste and residues into biomethane, with the first phase processing up to 100,000 tons of organic waste to produce approximately 460 terajoules per year, equivalent to the gas consumed by over 30,000 households.

• Bioenergy has been identified as a critical component of Australia's energy transition strategy, with the potential to supply up to one-third of industrial heat demand, approximately 244 petajoules per year, by the 2030s. This is particularly relevant for hard-to-abate sectors including food processing, metals manufacturing, chemicals production, and paper manufacturing where electrification faces technical and economic challenges, positioning biomethane as an essential decarbonization pathway for industrial gas users.

• Sydney Water partnered with Jemena, the state's largest gas distributor, to develop the Malabar Biomethane Injection Plant, the first demonstration project in Australia to inject biomethane into the gas network. This pioneering facility demonstrated the technical feasibility of upgrading biogas from wastewater treatment to pipeline-quality biomethane, establishing operational protocols and standards that inform subsequent commercial-scale projects across the country.

• ACT and New South Wales command the largest regional share, driven by the NSW Government's comprehensive policy framework, the concentration of biomethane projects in the Riverina and Greater Sydney regions, and the state's progressive renewable fuel regulations. Queensland represents a growing market with Kalfresh's AUD 80 million agri-industrial precinct including a biogas facility, while Victoria and Western Australia are developing policy frameworks to support biomethane project development.

Key Trends Shaping the Australia Biomethane Market

• Regulatory changes in 2025 allowing renewable gas certificates to count toward companies' emissions reporting obligations are creating clearer commercial pathways for biomethane project developers. This policy innovation directly links corporate sustainability commitments to biomethane procurement, generating demand from industrial and commercial gas users seeking verified emissions reductions. As Scope 1 and Scope 2 reporting requirements tighten under Australian climate policy, the economic value of certified biomethane increases correspondingly.

• Agricultural waste-to-biomethane projects are emerging as the dominant project model in Australia, leveraging the country's vast agricultural sector to convert crop residues, processing waste, and animal manure into pipeline-quality renewable gas. The Griffith Biohub and Kalfresh's biogas facility demonstrate this model's viability, combining waste management solutions with renewable energy production to create circular economy outcomes that generate multiple revenue streams for agricultural communities.

• The extension of the Guarantee of Origin scheme to cover biogas and biomethane represents a foundational market infrastructure development. Once implemented, GO certificates will provide standardized, internationally recognized verification of biomethane's renewable attributes, facilitating cross-border trading, corporate procurement, and integration with global emissions accounting frameworks that are increasingly important for Australia's export-oriented industrial sectors.

• Gas distribution network operators are actively positioning themselves as enablers of the biomethane transition, investing in injection infrastructure, upgrading gas quality monitoring systems, and developing contractual frameworks for biomethane acceptance. Jemena's partnership with Sydney Water at the Malabar facility established the operational precedent, while Energy Networks Australia's advocacy for biomethane expansion reflects the gas industry's strategic pivot toward renewable gas to maintain network relevance in a decarbonizing economy.

• The convergence of waste management policy and energy policy is creating synergistic drivers for biomethane investment. State-level organic waste diversion mandates, landfill bans on organics, and rising landfill levies increase the supply of low-cost feedstocks for anaerobic digestion facilities while simultaneously creating waste processing gate fees that improve biomethane project economics. This dual-driver dynamic strengthens the investment case beyond what either energy or waste policy alone could achieve.

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Market Growth Factors

Government Policy Framework and Financial Incentive Programs

Australia's federal and state governments are establishing comprehensive policy frameworks that provide the regulatory certainty and financial incentives needed to accelerate biomethane market development. The Future Made in Australia (Guarantee of Origin) Act 2024, commencing November 2025, creates a voluntary certification framework for renewable energy with active consultations to extend coverage to biogas and biomethane. The NSW Government has allocated AUD 40 million to the Renewable Gas Production Program specifically supporting commercial biomethane facilities capable of injecting into the gas network by June 2030. The broader NSW Renewable Fuel Strategy provides up to AUD 130 million through the Net Zero Manufacturing Initiative and AUD 40 million under the Industrial Decarbonisation Initiative. From 2028, the NSW Renewable Fuel Scheme will enable producers to generate tradable certificates for every gigajoule of biomethane produced, creating a market-based incentive mechanism. Regulatory changes in 2025 allowing renewable gas certificates to count toward corporate emissions reporting obligations strengthen demand-side drivers. The Government's Net Zero Plan identifies biomethane as a key component of Australia's energy transition, providing long-term policy direction that supports multi-year investment planning for anaerobic digestion and biogas upgrading facilities.

Abundant Feedstock Availability and Circular Economy Opportunities

Australia possesses approximately 400 petajoules per year of potentially recoverable biomethane from existing feedstocks, representing a vast and largely untapped resource base for renewable gas production. Agricultural waste and crop residues from Australia's expansive farming sector provide the largest feedstock category, with the Riverina region's Griffith Biohub demonstrating the model by processing up to 100,000 tons of organic waste in its first phase. Animal manure from intensive livestock operations, sewage sludge from municipal wastewater treatment plants, and food waste from processing facilities and urban collection systems provide diverse and geographically distributed feedstock sources. Kalfresh secured an AUD 80 million co-investment from QIC and Wollemi Capital for its agri-industrial precinct including a biogas anaerobic digestion facility, demonstrating private sector confidence in agricultural waste-to-energy models. State-level organic waste diversion mandates and rising landfill levies simultaneously increase feedstock availability while creating waste processing gate fees that improve biomethane project economics. This convergence of waste management and energy policy creates a circular economy framework where organic waste becomes a valuable energy resource rather than an environmental liability.

Industrial Decarbonization Demand and Hard-to-Abate Sector Requirements

Biomethane is increasingly recognized as an essential decarbonization pathway for Australia's hard-to-abate industrial sectors where electrification faces significant technical and economic barriers. Bioenergy has the potential to supply up to one-third of industrial heat demand, approximately 244 petajoules per year, by the 2030s, serving critical applications in food processing, metals manufacturing, chemicals production, and paper manufacturing. These sectors require high-temperature process heat that cannot be easily or economically provided by electric alternatives, making biomethane a pragmatic low-carbon solution that utilizes existing gas infrastructure and equipment. Industrial gas users subject to tightening emissions reporting obligations and corporate net-zero commitments represent a growing demand base for certified biomethane, creating premium pricing opportunities relative to conventional natural gas. Energy Networks Australia's July 2025 report calling for biomethane expansion reflects the gas industry's recognition that renewable gas is essential for maintaining network utilization and relevance as Australia pursues its net-zero trajectory. The ability to deliver biomethane through existing gas pipelines and distribution networks without requiring costly infrastructure modifications provides a significant deployment advantage.

Australia Biomethane Market Segmentation

IMARC Group provides an analysis of the key trends in each segment of the Australia biomethane market, along with forecasts at the country and regional levels from 2026-2034. The market has been categorized based on feedstock, application, and end user.

By Feedstock:

• Agricultural Waste

• Animal Manure

• Sewage Sludge

• Food Waste

• Energy Crops

• Others

By Application:

• Power Generation

• Automotive Fuel

• Industrial Heating

• Others

By End User:

• Residential

• Commercial

• Industrial

By Region:

• Australia Capital Territory & New South Wales

• Victoria & Tasmania

• Queensland

• Northern Territory & Southern Australia

• Western Australia

Key Players in the Australia Biomethane Market

The Australia biomethane market features an emerging competitive landscape comprising energy utilities, waste management companies, agricultural enterprises, and specialized renewable gas developers. Key players include Optimal Renewable Gas (ORG), which received AUD 20 million for its Griffith Biohub; Jemena, the gas distributor partnering with Sydney Water on the Malabar Biomethane Injection Plant; and Kalfresh, the Queensland vegetable producer developing an AUD 80 million agri-industrial precinct with biogas capabilities. Major energy utilities including AGL Energy, Origin Energy, and APA Group are exploring biomethane offtake agreements and injection partnerships. International bioenergy companies including Veolia, SUEZ, and Hitachi Zosen Inova bring global anaerobic digestion expertise to Australian projects. Equipment and technology providers such as Pentair Haffmans, Bright Biomethane, and Greenlane Renewables supply biogas upgrading systems converting raw biogas to pipeline-quality biomethane. Competition centers on feedstock access, proximity to gas injection points, project development expertise, government grant competitiveness, and the ability to secure long-term offtake agreements with industrial and commercial gas users.

Key Aspects Required for the Australia Biomethane Market Report

• Market Performance: An in-depth analysis of the Australia biomethane market covering historical trends and current dynamics, with a focus on the USD 180.59 Million valuation and projected growth trajectory reaching USD 539.95 Million by 2034.

• Market Segmentation: Comprehensive breakdown across feedstocks (agricultural waste, animal manure, sewage sludge, food waste, energy crops), applications (power generation, automotive fuel, industrial heating), and end users (residential, commercial, industrial).

• Regional Analysis: Detailed evaluation of biomethane development across ACT & New South Wales, Victoria & Tasmania, Queensland, Northern Territory & Southern Australia, and Western Australia, covering policy frameworks, project pipelines, and feedstock availability.

• Competitive Landscape: Profiling of key players including Optimal Renewable Gas, Jemena, Kalfresh, AGL Energy, and international bioenergy companies, covering project development, technology capabilities, and market positioning.

• Industry Trends and Drivers: Assessment of government incentive programs, Guarantee of Origin certification, NSW Renewable Fuel Scheme, industrial decarbonization demand, feedstock availability, and circular economy drivers.

• Technology Analysis: Examination of anaerobic digestion systems, biogas upgrading technologies (membrane, PSA, water scrubbing, chemical absorption), gas injection infrastructure, and monitoring and verification systems.

• Regulatory and Policy Analysis: Evaluation of the GO Act 2024, NSW Renewable Gas Production Program, Renewable Fuel Scheme certificate trading, emissions reporting frameworks, and organic waste diversion mandates.

• Future Outlook: Forward-looking projections covering commercial-scale project development, certificate trading market establishment, industrial offtake growth, feedstock supply chain maturation, and hydrogen-biomethane blending opportunities.

Recent News and Developments

• November 2025: The Future Made in Australia (Guarantee of Origin) Act 2024 commenced, establishing a voluntary certification framework for renewable energy, with public consultations underway to extend the scheme to cover biogas and biomethane produced via anaerobic digestion.

• November 2025: The NSW Government expanded its Renewable Fuel Scheme to include biomethane, establishing that from 2028 producers will be able to generate tradable certificates for every gigajoule of biomethane produced, creating financial incentives for project development.

• July 2025: Energy Networks Australia published a major report identifying approximately 400 PJ per year of recoverable biomethane from existing feedstocks and calling for expanded biomethane production to decarbonize Australian industry, particularly hard-to-abate sectors.

• 2025: Optimal Renewable Gas received AUD 20 million from the NSW Government to accelerate development of its Griffith Biohub, a circular economy project processing up to 100,000 tons of agricultural organic waste to produce approximately 460 TJ/yr of biomethane.

• 2025: The NSW Government allocated AUD 40 million to the Renewable Gas Production Program supporting commercial biomethane facilities capable of producing minimum 0.1 PJ per year and injecting into the NSW gas network by June 2030.

• 2025: Regulatory changes allowed renewable gas certificates to count toward companies' emissions reporting obligations, creating clearer commercial pathways for biomethane project developers and strengthening demand from corporate sustainability commitments.

• 2024: Kalfresh, a Queensland-based vegetable producer, secured an AUD 80 million co-investment from QIC and Wollemi Capital for its agri-industrial precinct including a biogas anaerobic digestion facility converting agricultural waste to renewable energy.

• 2025: Sydney Water's partnership with Jemena at the Malabar Biomethane Injection Plant continued operating as Australia's pioneering demonstration of biomethane injection into the gas network, informing standards and protocols for subsequent commercial-scale projects.

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