Inside Australia’s Biomethane "Moment": A Market Finding Its Shape
What’s unfolding in Australia is dynamic, fast-moving, and full of opportunity as key players figure out where the real value lies.
In the global energy landscape, few transitions are as analytically complex or as geographically significant as the one currently unfolding across the Australian continent. For decades, Australia has been defined by its vast fossil fuel reserves and its role as a primary energy exporter. But beneath the surface of its industrial sectors, from the intensive livestock operations of the Riverina to the wastewater networks of its coastal cities, a different kind of resource is being revalued.
This is Australia’s biomethane moment, a pivotal juncture where organic waste is being reframed as a strategic energy asset. To understand the gravity of this shift, I spoke with Levent Hilmi, Founder of Resource Loop, a member of the Victorian Bioenergy Network, Head of Growth and partnerships at Run Energy and a veteran with 16 years of experience in landfill gas, utility-scale bioenergy, and international technology consultancy. Levent offers a ground-level perspective on the transition from traditional gas capture to the modern anaerobic digestion (AD) systems now beginning to dot the Australian landscape.
The Methane Mandate
The driver for this transformation is found in the rigorous accounting of national emissions. Methane is a potent climate lever; it possesses a global warming potential over 27 times that of carbon dioxide on a 100-year scale. For a nation committed to Net Zero by 2050, capturing these fugitive emissions is no longer optional; it’s an economic and regulatory necessity.
According to the latest Quarterly Update of Australia’s National Greenhouse Gas Inventory, methane accounts for a significant portion of the national footprint. The agriculture sector remains a dominant contributor, with methane and nitrous oxide from manure management representing nearly 10% of total agricultural emissions. Meanwhile, the waste sector, encompassing landfills and wastewater, contributes approximately 3% of national emissions, a figure that hides the concentrated potential of urban and industrial organic streams.
"The feedstock is there, the technology is there, and the space is there," Levent observes. "Yes, it might be capital-intensive at the start, but once you get a few projects over the line, the rest will follow".
For a detailed breakdown of current trends, the Australian Department of Climate Change, Energy, the Environment and Water (DCCEEW) provides the evidentiary basis for the urgent push into renewable gas.
A Market in Tension
The current Australian landscape is defined by a sophisticated jostling for value. On one side are the large-scale utility operators like Jemena and AusNet, who manage billions of dollars in gas infrastructure. With the national push toward electrification, these companies face the threat of stranded assets. For them, injecting biomethane into the grid is a defensive necessity to keep their pipelines relevant in a decarbonized future.
On the other side are the feedstock owners, large-scale abattoirs, food processors, waste management companies and agricultural hubs. These entities are primary energy users themselves, often requiring immense amounts of process heat. Their analytical dilemma is whether to sell their gas to the grid or use it “behind the meter” to offset their own carbon footprints and energy costs.
There’s a bit of a pull between the behind-the-meter play and the big pipeline operators," Levent explains. "Everyone is trying to understand where the value is and how it affects their business. Network operators are nervous because the country is trying to electrify, so they are pushing feedstock owners to move into the biomethane space."
The Feedstock Bottleneck
Despite the momentum, a critical bottleneck remains: the bankability of long-term feedstock contracts. In a market where landfilling is still relatively inexpensive in certain jurisdictions, and where the value of organic waste is expected to surge in the next five years, large waste management firms like Cleanaway and Veolia are often hesitant to commit to 15-year supply agreements.
“They understand they own the feedstock and the logistics, and they know the value is coming,” Levent notes. “So they won’t commit to long-term contracts just in case the value increases. It’s hard to get a bankable project because you can’t find long-term feedstock supply.”
This tension is compounded by the “cheap gas” reality. Unlike Europe, where biomethane is heavily subsidized or benefits from high carbon pricing, Australian biomethane must compete with historically low conventional gas prices. Levent is blunt about the industrial reality: “Gas is pretty cheap here. If they can get [biomethane] cheap enough, they’ll use it. But if it’s not cheaper than normal gas, many won’t look at it. You have to call it out; if you aren’t realizing that truth, you’re never going to make the sale.”
Learning from the Global Blueprint
Australia possesses a distinct "second-mover advantage." By entering the biomethane race after decades of technological optimization in Europe and North America, Australian developers can adopt proven, de-risked systems. Projects like the Malabar Biomethane Injection Plant in Sydney, the first to inject renewable gas into the Australian network, are serving as the blueprint Levent describes. New players are entering the field with significant pipelines: Delorean Corporation is progressing its SA1 Salisbury facility; Valorify has 13.5 PJ of biomethane in its project pipeline from agricultural residues; and international capital from Canada and Singapore is beginning to flow through firms like Anaergia.
"We just learn from their mistakes and don't make them here," Levent says of the international experience. "We can take the best of every country. The technology is not the risk, you’ve just got to get the feedstock and the digestate sorted."
The Social Bridge: Why It Matters to Communities
Beyond the industrial spreadsheets, the biomethane moment carries profound implications for land stewardship. In regional Australia, wastewater from food processing is often stored in massive lagoons, left to evaporate and vent methane into the atmosphere. This is a missed opportunity for resource recovery and a risk to future land health. “We’ve been to facilities where they’re just letting it evaporate with no control,” Levent says.
“There’s a big opportunity not just to offset emissions, but to stop contaminating the land we’re going to use for the next hundred years. No one is really thinking about the next generation. We need to show the younger students where and how we can improve. Just because it’s not perfect now, you don't hide it. You show people and look for help."
The Three-to-Five-Year Horizon
The consensus among authorities like Levent is that while the current year is defined by "talk and tenders," the physical boom is on the near horizon. The next 12 months will likely see a wave of Final Investment Decisions (FIDs), with a three-to-five-year window for these projects to come fully online. The "moment" in Australia is real, but it remains delicate. It requires the government to reduce "red tape," particularly regarding the regulation of digestate (the nutrient-rich byproduct of AD) and the logistics of feedstock hubs. But as Levent suggests, the facts are moving faster than the policy. The industry is no longer waiting for permission; it’s building the infrastructure of a circular economy, one PJ at a time.
For the global biogas community, Australia isn't just a new market; it’s a live laboratory for how a gas-heavy, geographically vast economy pivots toward a sustainable, subsurface future.
To connect with Levent Hilmi, reach out to him at leventhilmi@resourceloop.com.au
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