It features alongside hydrogen in the Victorian government’s Renewable Gas Consultation Paper, where it is forecast to be required long-term, particularly for industrial users.

AGIG chief executive Craig de Laine said Blunomy’s report suggested there was substantial potential for biomethane, with government policy critical to unlocking this goal.

Proponents say biomethane could help address some of Australia’s looming gas supply shortfalls.

Proponents say biomethane could help address some of Australia’s looming gas supply shortfalls.Credit: AP

“We would like to see Victoria support a higher rate of feedstock recovery and the development of hubs to enable efficient biomethane production from agricultural waste,” he said.

De Laine said the Australian Biomass for Bioenergy Assessment was working to improve Victoria’s data, providing a more precise estimate in future.

Energy Minister Lily D’Ambrosio said the government was focused on scaling up biomethane and renewable hydrogen across the state, establishing new industries and jobs.

“Renewable gas will be critical in helping Victoria meet our emissions reduction targets and we are supporting its development as a viable energy source by providing an economic boost through the Energy Innovation Fund – including support for an Australian-first facility in Anakie that converts chicken litter to biogas,” she said.

Dr Kat Lucas-Healey, Environment Victoria’s senior climate and energy adviser, said biomethane had industrial uses, but had similar problems to other gases, including its availability and health concerns about burning it indoors.

“Most of the ways we use gas in Victoria are just really inefficient compared to electric alternatives, so there’s a lot of gas that we’re using that we really don’t need to,” she said.

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Lucas-Healey said it was better to focus on electrification than alternative gases. She said some of the challenges in scaling up biomethane had centred around attracting investment and paying for classification and disposal of public waste.

Scott Grierson, chief executive of bioenergy company Valorify, said he was seeking government support for his company’s two projects in late-stage development in Victoria. They are estimated to be capable of producing 13.2 petajoules of gas with methanation.

He said one policy roadblock was that industrial businesses could claim a greenhouse gas reduction by signing energy agreements with renewable electricity generators, but this was not available for biomethane projects.

“We see this is a massive, exploding industry in many other countries around the world, but in Australia, it’s completely missing in action,” he said. “Our goal is to develop utility-scale biogas facilities that particularly make use of agricultural cropping waste.”

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Grierson said there was a perception in Australia that biomethane was a small sector, but its take-up in the European Union showed it was increasing in size.

In March, the Australian Energy Market Operator warned the entire east coast gas market would be in yearly supply deficits unless action was taken to drill new gas fields in the south.

It came amid a renewed public debate about the use of gas in Australia. The Albanese government’s Future Gas Strategy in May said the fuel had a key role to play in Australia’s energy mix beyond 2050.

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