Don’t forget gas: industry calls for renewable support

Jennifer Dudley-Nicholson | October 30, 2025

Australia should not put all of its renewable energy investments into just a few baskets, a group warns, as it will not address the nation’s ongoing reliance on gas. 

More than 50 organisations, from energy retailers to manufacturers, issued an open letter to the federal energy minister on Thursday, calling on the government to extend financial support to renewable gas projects. 

The energy source, also known as biomethane, could reduce both emissions and prices, they say, while establishing a new renewable energy sector. 

The call comes after the government listed biomethane as an emissions-reducing fuel in its Net Zero Report and after a study by Blunomy found Australia could produce significant amounts of the gas using existing materials. 

Renewable gas, or biomethane, is created by processing the gas generated from decomposing organic waste at facilities such as breweries, piggeries, dairies, abattoirs, landfill sites and wastewater treatment plants.

The processed biogas is compatible with the existing gas network, Bioenergy Australia chief executive Shahana McKenzie said, and was a proven technology with potential to cut emissions from hard-to-abate sectors. 

“The government has understandably been very focused on decarbonisation of the electricity sector over the last five years,” she told AAP. 

“We really need the government to now pat its head and rub its belly at the same time and support decarbonisation of the gas network as well.”

The open letter to Energy Minister Chris Bowen calls for the government to broaden the eligibility of its Hydrogen Headstart and Hydrogen Production Tax Incentive schemes to include biomethane projects. 

Hydrogen had proven more costly to develop than expected, Ms McKenzie said, and while its production should be pursued, renewable gas projects could deliver results faster and require smaller investments.

Australia operates 250 renewable gas facilities “behind the meter”, she said, but co-investments would help to achieve larger scale production. 

“Gas is going to be needed for a long time in Australia,” Ms McKenzie said. 

“What we are saying is let us help you decarbonise it so we can have it as a renewable (form of energy).”

A recent study into biomethane by Blunomy found Australia had enough material to create about 400 petajoules of the gas each year, priced between $10 and $27 per gigajoule. 

Companies who signed the call to fund renewable gas projects included AGL, Opal, Pepsico, Brickworks and Energy Networks Australia, whose chief executive Dom van den Berg said Australia should look to international examples such as Denmark.

“Decarbonising Australia’s economy requires exploring every available pathway, including renewable gases like biomethane,” she said. 

“We should be learning from the countries already demonstrating what’s possible and integrating these technologies to reduce emissions while keeping energy affordable and reliable.”