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Energy Insights

Australia's Journey Towards Net Zero Emissions:

Piloting a New Renewable Gas Certification Scheme

The transition of the Australian and global economies towards net zero emissions is underway. This is driven by Government policy initiatives coupled with private sector and investor responses and changing consumer expectations.

Natural gas is an important fuel for heat production, particularly in applications where high temperatures are required. Approximately 25 per cent of Australia's stationary energy consumption is natural gas. In addition, there are even more significant levels of liquified natural gas exports.

While the emissions intensity of combusting natural gas is about half that of burning coal, emissions associated with natural gas extraction for onshore combustion and export accounted for 30% of Australian emissions in 2020.

 Therefore, it is unsurprising that Australia's transition to a net zero economy will require a significant focus on addressing natural gas emissions.

Several approaches to addressing these emissions are currently attracting a lot of attention for their potential to provide an alternative to natural gas at scale

One such approach is using renewable gas, such as biogas, instead of methane or natural gas.  Biogas is derived from the breakdown of organic material such as wastewater, agricultural waste, food waste and industrial waste. From there, it is converted to biomethane and used as a carbon-neutral substitute for methane.  

Research by the International Energy Agency found the world's biogas and biomethane resources could meet 20 per cent of global gas demand while also reducing greenhouse gas emissions.

The use of biogas also has added benefits by addressing waste-related issues and developing a more circular economy.

The pilot scheme

The New South Wales Government managed GreenPower and Jemena and Energy Network Australia (ENA) piloting a renewable gas certification scheme.

The pilot will commence in 2022 and enable a small number of New South Wales gas household customers to have access to verified and accredited renewable gas. 

A successful pilot should assist in enabling further investment in new sources of renewable or green gas.  It will also allow consumers to achieve emissions reductions where they can not readily switch to renewable electricity.

The scheme is expected to operate similarly to the existing GreenPower accredited electricity scheme where customers can voluntarily purchase part or all of their electricity consumption from renewable sources. 

The certification of renewable gas would similarly be voluntary and administered by GreenPower.

The first renewable gas production source to be used in the pilot scheme is the Sydney Water owned Malabar biomethane injection project. This uses wastewater to produce biomethane to be injected into the local gas distribution network. The facility is expected to supply up to 6,300 households with carbon-neutral gas.

The pilot is expected to run for two years and will inform a process to develop a permanent scheme.

Conclusion

The need to decarbonise Australia's natural gas sector is clear, there are, however, several approaches to achieve this outcome, and a combination of approaches will likely be required.

A successful renewable gas certification scheme will help support a sustainable renewable gas industry and reduce emissions.

If you have any questions or need advice on your journey to net zero or the availability and opportunities of renewable gas for your business, don't hesitate to get in touch with your Energy Action account manager or contact us on 1300 964 589.

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