The nutrient cycle of agriculture, where farmers recycle organic waste into fertiliser or feed, is perhaps the most ancient circular economy of all. However, with the agriculture sector accounting for approximately 18% of Australia’s emissions1, the need for innovative and scalable solutions to reduce its greenhouse gas emissions is more imperative than ever.
One such solution lies in the use of anaerobic digestion, which converts biomass into biogas.2 Biomass refers to organic materials that come from various sources, including the remnants from agricultural activities, the food industry, forestry operations and waste management systems.3 Biogas is a type of fuel made from the conversion of biomass through the anaerobic digestion process.4 Biogas is able to be utilised in the generation of electricity, steam and heat5 and can also be upgraded into ‘renewable natural gas’ (RNG) for injection into natural gas networks or to fuel vehicles.6 The transformation of biomass into biogas has the potential to create self-sustaining, closed-loop farming systems to promote a more circular economy.
What is anaerobic digestion?
The word anaerobic means ‘without oxygen’.7 Hence, anaerobic digestion is carried out in an oxygen-free sealed digester, whereby microorganisms break down biomass and convert it into biogas.8 Biogas is composed of 50 to 75 per cent methane, as well as carbon dioxide (CO2), hydrogen sulphide (H2S), water vapour and inconsequential amounts of other gases.9 The captured biogas can then be used as a fuel on-site for such purposes as producing heat or generating electricity (including to power the anaerobic digester itself).10 The anaerobic digestion process is illustrated in the diagram below.
Source: U.S. Environmental Protection Agency11
Upgrading biogas into ‘renewable natural gas’ (RNG)
While the captured biogas from the anaerobic digestion process can be used to generate electricity, steam and heat, it can also be purified and upgraded into RNG.12 This is done by removing the low-value components of CO2, water vapour, H2S and other trace gases.13 RNG is typically composed of 96 to 98 per cent methane.14 The uses for RNG include being injected into existing gas distribution networks and as a replacement for natural gas (such as in electricity generation, cooking and heating)15 or being converted into either compressed natural gas or liquified natural gas to be used as a vehicle fuel.16
Biogas upgrading – a better alternative to biogas flaring
In May 2023, the RACE for 2030 Opportunity Assessment reported that approximately 40% of anaerobic digestion facilities in Australia were flaring their biogas rather than using it.17 Flaring the biogas converts it into carbon dioxide,18 which is reported, over a 20-year period, to be 80 times less harmful to global warming than methane.19 However, carbon dioxide is still a greenhouse gas.20 Flaring is therefore a tragic waste of biogas that, as outlined above, has a multitude of potential useful applications.
Biogas upgrading in Australia and certification schemes
The RACE for 2030 Opportunity Assessment also found, as of March 2019, that while Australia had over 200 operating anaerobic digestion facilities, there was not a single operating commercial biogas upgrading plant (RNG Plant).21 The Jemena Malabar Biomethane Facility became the first Australian project to upgrade anaerobic digestion-generated biogas into RNG and inject it into a gas network.22 The project is also reported to be the first biomethane facility in Australia to register under GreenPower’s renewable gas certification scheme.23 Additionally, to offset the electricity consumed in producing RNG, the project generates Large-Scale Generation Certificates.24
Whether anaerobic digestion facilities and RNG Plants will be eligible for registration under various Federal or State schemes (including those noted above) will depend on the specifications and details of the individual project. Such schemes may provide financial incentives for the development and operation of these types of projects.
Barriers to developing RNG Plants
The shortage of RNG Plants in Australia may partially be due to gaps in domestic knowledge in the design, operation and maintenance of the anaerobic digestion systems, which differ in complexity.25 There is also the necessity of feedstock security which, except if the project developer produces the feedstock itself, cannot be guaranteed unless RNG Plants have entered long-term arrangements with feedstock suppliers.26
In an effort to overcome these issues, project developers and feedstock suppliers may choose to enter into arrangements to jointly develop RNG Plants. One example of such an arrangement is the renewable fuels joint venture between Apeiron Bioenergy, who will provide know-how on feedstock collection, and Jet Zero Australia, who will concentrate on investing in processing and refining of non-edible crops.27
It’s time to act
Biogas represents a powerful, yet underutilised, solution to some of the agricultural industry’s most pressing environmental challenges. Through the use of anaerobic digestion and the upgrading of biogas to RNG, the potential for a circular economy in the agricultural sector is within reach. Harnessing the full potential of biogas is not just an opportunity for cleaner energy – it is a key step towards a more sustainable, self-sufficient agricultural system that can help mitigate climate change and fuel the future.28
The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, and construction, including the buying and selling of development and operating projects. For more information, please contact Matt Baumgurtel.
1Climate Council, Farming Down Under: Agriculture’s role in Australia’s climate pollution (Web Page, 23 August 2024) https://www.climatecouncil.org.au/resources/australia-agriculture-climate-change-emissions-methane/.
2Rafaela Lora Grando, Adelaide Maria de Souza Antune, Fabiana Valéria da Fonseca, Antoni Sánchez, Raquel Barrena, Xavier Font, ‘Technology overview of biogas production in anaerobic digestion plants: A European evaluation of research and development’ (2017) 80 Renewable and Sustainable Energy Reviews https://www.sciencedirect.com/science/article/abs/pii/S1364032117307074
3CSIRO, Biomass and waste-to-energy (Web Page) https://www.csiro.au/en/research/technology-space/energy/energy-in-the-circular-economy/biomass-to-energy.
4AGL, How biogas is turning waste into power (Web Page, 15 December 2022) https://www.agl.com.au/discover/sustainability/what-is-biogas?srsltid=AfmBOoq4n8eeXfkJ09rg5Uqqnzdgz2W_oMcPBCVlwcF6eGEsNW58KsOB.
5Ibid.
6Environmental and Energy Study Institute, ‘Fact Sheet | Biogas: Converting Waste to Energy’ (Web Page, 3 October 2017) https://www.eesi.org/papers/view/fact-sheet-biogasconverting-waste-to-energy (‘Fact Sheet’).
7Cambridge Dictionary (online on 5 February 2025) ‘anaerobic’.
8U.S. Environmental Protection Agency, How Does Anaerobic Digestion Work? (Web Page, 31 December 2024) https://www.epa.gov/agstar/how-does-anaerobic-digestion-work (‘How Does Anaerobic Digestion Work?’).
9Ibid.
10Fact Sheet (n 6).
11How Does Anaerobic Digestion Work? (n 8).
12Ibid.
13Ibid.
14U.S. Environmental Protection Agency, Renewable Natural Gas (Web Page, 29 January 2025) https://www.epa.gov/lmop/renewable-natural-gas.
15Fact Sheet (n 6).
16Ibid; U.S. Department of Energy, ‘Alternative Fuels Data Center’, Renewable Natural Gas Production (Web Page) https://afdc.energy.gov/fuels/natural-gas-renewable.
17Race for 2030, Onsite anaerobic digestion for power generation and natural gas/diesel displacement
(Web Page) https://www.racefor2030.com.au/project/b5-onsite-anaerobic-digestion/.
18Climate Insight, Biogas Flaring (Web Page) https://climateinsight.ca/solution/biogas-flaring.
19World Bank Group, Global Flaring and Methane Reduction Partnership (GFMR) (Web Page) https://www.worldbank.org/en/programs/gasflaringreduction/gas-flaring-explained.
20U.S. Environmental Protection Agency, Overview of Greenhouse Gases (Web Page, 16 January 2025) https://www.epa.gov/ghgemissions/overview-greenhouse-gases.
21Kaparaju, P., Conde, E., Nghiem, L., Trianni, A., Cantley–Smith, R., Leak, J., Katic, M., Nguyen, L., Jacobs, B., Cunningham, R., Anaerobic Digestion for Electricity, Transport and Gas (Final Report, May 2023) 12, 22 https://www.racefor2030.com.au/content/uploads/21.B5-OA_-Final.pdf (‘Anaerobic Digestion for Electricity, Transport and Gas’).
22Jemena, Malabar Biomethane Facility (Web Page) https://www.jemena.com.au/future-energy/future-gas/Malabar-Biomethane-Injection-Plant/.
23Ibid.
24Ibid.
25Anaerobic Digestion for Electricity, Transport and Gas (n 21), 104 – 105.
26Ibid, 111.
27Jet Zero Australia, ‘Jet Zero Australia and Apeiron Bioenergy Renewable Fuel Partnership and Australia and Singapore Go-Green Grant Funding Award’ (Media Release, 5 March 2024) https://jetzero.com.au/jet-zero-australia-and-apeiron-bioenergy-renewable-fuel-partnership-and-australia-and-singapore-go-green-grant-funding-award/
28Mohsen Brahmi, Bruna Bruno, Karambir Singh Dhayal, Luca Esposito, Anna Parziale, ‘From manure to megawatts: Navigating the sustainable innovation solution through biogas production from livestock waste for harnessing green energy for green economy’ (2024) 10 Heliyon 14 https://www.sciencedirect.com/science/article/pii/S240584402410535X
