As the world seeks cleaner alternatives for hard-to-abate sectors like heavy industry, biomethane is poised to play an important role. Globally, output is projected to double between 2023 and 2027¹ and, in Australia, new projects and government policy are aiming to support development of this vast renewable resource.

Many energy users simply can’t rely on electrons to meet their long-term emission reduction targets, this is why molecules are not just desirable but essential in helping the world decarbonise.

Biomethane is a renewable gas made from organic materials that are typically sourced from waste management and agricultural sectors. As a drop-in substitute for natural gas, it’s a vital decarbonisation tool for the Australian economy in areas such as manufacturing and to support the firming of renewables such as wind and solar power generation.

Investigating the potential of biomethane to decarbonise APA’s facilities

APA has many facilities that cannot easily be electrified. For example, the compressors that move gas along our pipelines are mostly powered  by natural gas. Many of these compressors are in remote regions that are long distances away from electricity networks which makes electrifying them challenging.

In May 2024, we launched our first public Biomethane Supply Expression of Interest (EOI) to engage potential suppliers from across Australia to assess the potential for this renewable fuel to decarbonise our facilities. This process identified several promising opportunities, including a leading proposal to fuel one of our compressor stations through direct supply via a dedicated pipeline.

Following a detailed feasibility study, we chose not to proceed with the project due to a combination of technical and commercial factors unique to the project. Despite this, the technical, commercial and market insights gained have been invaluable to us in understanding the future biomethane value chain.

The critical role for market-based emissions reporting rules in the renewable gas sector

The Federal Government’s proposed market-based reporting rules for renewable gases will be a significant catalyst for biomethane production growth.

Significantly, under the existing emissions reporting rules, the benefit of renewable gases co-mingled with natural gas in pipelines is shared across all users. This means a dedicated renewable gas pipeline must be used for a user to claim the full decarbonisation benefit of their purchased renewable gas. This was one of the challenges that we faced in our compressor decarbonisation project.

The proposed reporting scheme put forward by the Commonwealth Department of Climate Change, Energy, the Environment and Water (DCCEEW) addresses this issue through the allowance for use of renewable gas certificates to account for production and use of biomethane in natural gas pipelines. This removes the burden faced by biomethane project proponents for building dedicated pipelines to transport their gas to their customers.

The scheme will support the potential for existing pipeline infrastructure, built over decades, to transport renewable gases. In doing so, it will help to address barriers such as cost and scalability and will bring Australia into alignment with our global peers where certificates are used to facilitate renewable gas markets.

Looking forward

Biomethane is one of the many critical tools needed for Australia’s energy transition. As a leader in energy infrastructure, APA is committed to continuing to support the exploration of emerging renewable energy technologies.

We will continue to work with stakeholders across the biomethane sector, with a focus on supporting potential transmission pipeline connections in regions where biomethane production potential exceeds local distribution capacity.

Alongside biomethane, APA continues to support   the development of other solutions, including carbon capture and transport, hydrogen and long-duration energy storage . We will be customer-led in this work and we look forward to continuing to engage with customers, industry and government to contribute to a lower emissions energy future.

¹ IEA, Biomethane: A Global Stocktake Nov 2024