Tuesday, 17 June 2025
It’s the hidden engine driving Australia’s manufacturing sector. Behind nearly every bag of cement or fertiliser, every steel beam, brick pallet, dose of medicine, bag of corn chips or barrel of chemicals – is gas. It fuels the high-heat processes that keep modern industry moving.
Without it, the industries behind essential goods like bricks and steel would be stranded, with gas remaining a core input that helps drive Australia’s $100 billion manufacturing sector, supporting hundreds of thousands of Australian jobs, and fueling the nation’s economic growth.
But this reliance on gas creates an immense challenge for our industrial heartland: how do manufacturers and heavy industries balance their usage of gas with the urgent need to reduce emissions, without sacrificing their competitiveness, causing major disruption to operations, or sending jobs offshore?
Because not every process and system can be electrified, gas will be required both through the clean energy transition and well beyond, a fact recognised by the Federal Government.
Meeting the challenge of achieving net zero and building a Future Made in Australia requires every low carbon energy solution to be placed on the table, to allow manufacturers the flexibility to cut emissions in the most affordable and effective way. Undoubtedly, the nation’s large industrial emitters are ready and willing to meet their obligations and do their part in getting Australia to net zero.
What they now need are the tools to turn emissions reduction targets into action, supported by policy settings that turbocharge innovation and technology, and spark a revolution in how they can generate and use industrial heat.
That revolution is Renewable Gas, a proven, scalable renewable energy solution that has played a central role in Europe’s shift from fossil fuels, and is set to play a critical role in decarbonising Australia’s hard-to-abate sectors.
The early chapters of this revolution in gas are being written in New South Wales, where the Malabar Biomethane Injection Plant is pumping biomethane, produced from Sydney waste water by a process called anaerobic digestion, directly into Jemena’s gas distribution network.
This breakthrough facility is on track to produce around 95 terajoules of biomethane annually, equivalent to the average yearly usage of approximately 6,300 NSW homes, with the potential to scale up to 200 terajoules per year, meeting the needs of about 13,300 homes.
While it is small beginnings, the potential to scale up this low-emission renewable energy source is considerable, and to Australia’s advantage.
With an enviable supply of organic waste from farms, crops, municipal rubbish, and sewerage, Australia has an abundance of feedstock to generate biogas which can be processed into significant quantities of the renewable gas, biomethane. Enea Consulting (2022) has estimated this untapped resource could potentially produce 137PJs of biomethane each year in NSW alone - exceeding current NSW gas consumption.
Turning this opportunity into a real decarbonisation game-changer took another positive step earlier this month, with the emission benefits now being recognised under the National Greenhouse and Energy Reporting (NGER) scheme when industry purchases certified renewable gas – just as it currently does for renewable electricity.
NGERs recognition of renewable gas certificates now offers heavy gas users a credible tool to help meet their own emissions targets while also meeting their regulatory requirements with a practical, drop-in energy solution. It could also give additional confidence to investors looking to invest in the nascent renewable gas sector.
Here, we’re seeing some fantastic green-shoots with not only Jemena investing in technology and capability but, over the past 18 months, securing a number of MOUs with several developers including Valorify, Optimal Renewable Gas, Sojitz, and GCE who are all looking to turn farming and agricultural waste into biomethane.
The growth of Australia’s renewable gas sector will drive investment across the economy, in both the increasingly diverse energy sector, and a manufacturing industry that has been under sustained pressure from high energy prices, trade complexities, climate policy and stiff business conditions.
It will also give Australia’s manufacturing sector a cost-competitive solution to decarbonise their operations which is key to keeping industry onshore and supporting sustainable economic growth and employment at home.
Australia’s heavy industries are ready to decarbonise – it’s time to make it easier for them.
David Gillespie is the managing director of Jemena.
