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30 November 2021
Mr Jet Shoon Chong
Assistant Manager
Emissions Avoidance Methods
Clean Energy Regulator
Via the consultation hub
GEA RESPONSE TO THE BIOMETHANE METHOD PACKAGE
Dear Mr Chong
Gas Energy Australia (GEA) welcomes the opportunity to respond to the Biomethane method
package: Draft method guide.
By way of background, GEA is the national peak body which represents the bulk of the
downstream gaseous fuels industry, which covers Liquefied Petroleum Gas (LPG), Liquefied
Natural Gas (LNG), Compressed Natural Gas (CNG). The industry comprises major
companies and small to medium businesses in the gas fuels supply chain including producers,
refiners, distributors, transporters, retailers, vehicle manufacturers, equipment manufacturers
and suppliers, installers, educators and consultants.
GEA strongly supports the development of an Emission Reduction Fund (ERF) method
which allows projects to earn Australian Carbon Credit Units (ACCUs) for activities that
reduce or store emissions.
GEA considers that incentives to reduce greenhouse gas (GHG) emissions through the greater
use of renewable gases to be vital in ensuring Australia’s stationary energy and transport
sectors are encouraged to reduce emissions in an affordable manner utilising best practice
technology to do so.
GEA considers there to be two main areas where the biomethane method could be improved
to allow for the greater utilisation of renewable gases through the ERF. These include:
1. Expansion of the method to credit for the use of bioLNG and bioCNG as a substitute
for fossil fuel based LNG and CNG.
2. Displacement of fossil fuel based LPG with biomethane.
These areas are detailed below.
Gas Energy Australia
ABN 11 002 703951
Suite 7 16 National Circuit Barton ACT 2600
Telephone: 02 6176 3100
gasenergyaustralia.asn.au
Page 1 of 4
Expansion of the method to recognise the use of bioLNG or bioCNG as a substitute for
LNG or CNG
In the same way that natural gas can be liquified or compressed and used as LNG or CNG in
transport and stationary energy applications, biomethane can also be compressed or liquefied
to power road vehicles, marine vessels and remote area electricity generation. GEA considers
there are significant opportunities for biomethane to substantially reduce emissions and
increase sustainability in the stationary energy and transport sectors, especially in remote and
regional Australia. As such, the inclusion of bioLNG and bioCNG in the biomethane method
for displacement abatement would help to expand the use of the method and forms of
abatement.
The method could utilise the current calculations of abatement where projects are credited for
the net abatement they deliver, which will be given by the total abatement created minus
emissions associated with the running of the project. The emissions associated with
compressing or liquefying biomethane will be the same as those associated with compressing
or liquefying natural gas.
If the use of bioLNG or bioCNG is included in the biomethane method under displacement
abatement, GEA considers that the methodology would be improved if LNG, CNG, bioLNG
and bioCNG were measured by mass instead of volume. GEA notes it is standard practice to
measure LNG and CNG in terms of mass and not volume. For example, the Australian
Taxation Office measures LNG and CNG for excise purposes in kilograms.
As noted in the consultation paper, under the current biomethane method in development, the
use of biomethane to displace the use of natural gas can be credited with ACCUs for
combustion of biomethane as a natural gas substitute, “for example, when biomethane is
injected into the gas network or burned for heat or power, displaces an equal volume of
natural gas consumption”.
GEA considers that it is vital that transport applications, particularly heavy vehicles and
marine applications are easily able to claim ACCUs for abatement associated with the
displacement of natural gas with biomethane.
The use of biogas as a transport fuel is steadily increasing internationally, with countries such
as Sweden setting a goal of a fossil-fuel free transport sector by 2030, and biomethane is a
key way of achieving this ambition. In Australia, the SeaRoad Mersey 2 ferry that travels
between Victoria and Tasmania is currently reducing emissions by using LNG instead of oil
based fuels. With the ability to utilise existing infrastructure, bioLNG can significantly
contribute to large emissions reductions in the marine sector. The ability to claim ACCUs for
these applications would encourage shipowners to look to low and zero emission fuels as a
means to reduce carbon emissions.
BioLNG also provides an opportunity for industrial and commercial customers to achieve net
zero emissions, while retaining existing plant and equipment. In Australia, GEA member
Gas Energy Australia
ABN 11 002 703951
Suite 7 16 National Circuit Barton ACT 2600
Telephone: 02 6176 3100
gasenergyaustralia.asn.au
Page 2 of 4
BOC, recently announced a new memorandum of understanding agreement with Optimal
Group to explore the development of Australia’s first bioLNG facility. The companies will
investigate the potential for Optimal’s subsidiary, Optimal Renewable Gas to build a $55
million, 2.4 TJ/day waste to biogas plant adjacent to BOC’s micro-LNG plant in Westbury,
Tasmania. The biogas plant would provide biomethane to BOC’s micro-LNG plant, which
would then be processed into bioLNG and distributed to BOC and Elgas customers in
agriculture, food processing and other industries. More information on this project can be
found at https://prwire.com.au/pr/100567/boc-and-optimal-group-sign-agreement-to-focus-
on-development-of-australias-first-biolng-facility
Displacement of LPG with biomethane
Currently the biomethane method allows for the claiming of ACCUs for displacing the use of
natural gas with biomethane. GEA considers that the method could be improved by
expanding it to include displacing the use of fossil fuel based LPG with biomethane.
Many edge and off grid areas rely on the use of LPG for power generation and end use
consumption in home and businesses. This is particularly so where the natural gas grid does
not extend. Enabling the claiming of ACCUs under the biomethane method for LPG
displacement would help incentivise the greater uptake of biomethane and provide significant
benefits for remote and regional communities.
GEA considers that the current method could easily incorporate the displacement of LPG.
The below displacement calculation example is taken from page 22 of the “Draft Simple
Method Guide for Biomethane Projects” and substitutes LPG for natural gas.
Displacement calculation example
A wastewater facility produces and injects 100 terajoules (TJ) of biomethane in a year into
the LPG gas network.
• The NGER (Measurement) Determination emissions factor for LPG gas is 60.2 kg CO2-
e/GJ
• Therefore gross displaced gas emissions = (100,000)*( 60.2 )/1000 = 6,020 tCO2-e
• All biogas upgraded into biomethane is produced at the wastewater facility, so the eligible
abatement fraction is 1.
• Emissions from energy used in the biogas to biomethane upgrading process comes to
100 tCO2-e.
Net displacement abatement = 6,020*1 – 100 = 5,920 tCO2-e
As demonstrated above, there is minimal amendments to the methodology required to
incorporate the displacement of LPG as a means to claim ACCUs, which can help to
incentivise the use of renewable gases and investment in new technologies.
Gas Energy Australia
ABN 11 002 703951
Suite 7 16 National Circuit Barton ACT 2600
Telephone: 02 6176 3100
gasenergyaustralia.asn.au
Page 3 of 4
An example of the potential of biomethane to displace LPG to reduce carbon emissions is in
Western Australia where ATCO Australia has entered into an agreement with the Great
Southern Development Commission to undertake a feasibility study into opportunities for
renewable natural gas (RNG) in Albany. This study will assess the viability of injecting RNG
into the Albany LPG network, providing a low emission energy source for the people of
Albany.
Conclusion
In conclusion, GEA supports the CER’s proposed biomethane method. And expanding the
method to incorporate the two suggestions above would enable the ERF to encourage greater
utilisation of renewable gases and more abatement.
GEA also considers the method could be made more general in terms of accommodating the
use of renewable gases other than biomethane eg, renewable LPG or renewable dimethyl
ether. This would enable even greater utilisation of the method’s approach and further
contribute to the Federal Government’s whole-of-economy ‘Long-Term Emissions Reduction
Plan’ to achieve net zero emissions by 2050.
GEA welcomes the opportunity to discuss these issues in greater detail. If you have any
questions regarding this submission, please do not hesitate to contact GEA’s Policy Adviser
Melissa Dimovski at mdimovski@gasenergyaustralia.asn.au.
For your consideration.
Yours sincerely
John Griffiths
Chief Executive Officer
Gas Energy Australia
Gas Energy Australia
ABN 11 002 703951
Suite 7 16 National Circuit Barton ACT 2600
Telephone: 02 6176 3100
gasenergyaustralia.asn.au
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