Biomethane method package: proposed new method activity under the Emissions Reduction Fund

30 November 2021

Department of Industry, Science, Energy and Resources
Via online submission: https://consult.industry.gov.au/biomethane-method-package/have-your-say
To whom it may concern,
Biomethane method package: proposed new method activity under the Emissions
Reduction Fund
Australian Gas Infrastructure Group (AGIG) welcomes the opportunity to provide comment on the
draft biomethane method package. In progressing towards achieving Australia’s emissions reductions
targets, we are strongly supportive of developing a new Emissions Reduction Fund (ERF) method for
biomethane. Incentive mechanisms like ERF crediting are required to give the industry confidence to
invest in new renewable gas projects, supply chain development and local jobs. In doing so, these
types of incentives can help to ensure a sustainable, growing economy for Australia in accordance with
vision of the Bioenergy Roadmap.
As identified in the Bioenergy Roadmap, by the start of the next decade Australia’s bioenergy sector
could contribute around $10 billion in extra Gross Domestic Product per annum and 26,200 new jobs,
reduce emissions by about 9 per cent, divert an extra 6 per cent of waste from landfill, and enhance
fuel security.1
Biomethane offers several market advantages over and above those available for the onsite use of
biogas for electricity generation. It is a net zero renewable gas that can be quickly deployed using
existing gas distributions networks, without modifying gas pipelines or appliances. It can be used in
homes and industry for heat, or as a fuel for gas vehicles. Overall, we support the method, however
some enhancements could further improve the viability of biomethane injection projects.
Extending the crediting period from 12 years to typical project life (20-25 years) will
increase uptake of biomethane activity
While the benefits of biomethane in reducing emissions are well recognised, with many projects in
operation across the world, biomethane injection projects are currently not widely deployed in
Australia. Extending the crediting period from 12 years to cover the project life (20-25) years would
help alleviate the large upfront and ongoing operational costs of undertaking such projects.
Developing affordable projects requires relatively long payback periods which should align with the
crediting period.
Also, extending the crediting period would be key in incentivising industry to undertake early
biomethane injection projects as the price of biomethane will likely further decrease2, making it more
cost competitive as a substitute with natural gas. This will drive large scale emissions reductions
through injection into a gas network, other transport using non-pipeline infrastructure and onsite use.

1
Bioenergy Roadmap
2
Refer to Bioenergy Australia’s submission.
Other waste feedstocks would enhance the biomethane method
We support expanding the alternative waste treatment and source separated organic waste methods
to enable biomethane projects as a priority, as they are the largest resource opportunity for
developing the industry in the short term, representing 37 per cent of Australia’s current potential.3
We also welcome the Government’s intention to progress further research into different sources of
agricultural waste as feedstock to support an enhanced biomethane ERF method as agricultural
resources have the largest potential (41 per cent of Australia’s resource potential).4
Expanding the biomethane method package to include these additional waste feedstocks will enhance
and increase uptake of the ERF method, delivering further emissions reductions.
Transport loss factor
We observe that in some circumstances, a 2 per cent loss factor might overestimate the loss of
methane that actually occurs. We would suggest using a 2 percent loss factor as a default, however
where providers can demonstrate a loss under 2 per cent with supporting evidence (for example
fugitive emissions reporting) then that figure should be used as the transport loss factor.
About AGIG
AGIG is the largest gas distribution business in Australia, serving more than two million customers
through our networks in Victoria, Queensland, South Australia, and several regional networks in New
South Wales and the Northern Territory. Our transmission pipelines and storage facility serve a range
of industrial, mining and power generation customers in Western Australia, Queensland, New South
Wales and the Northern Territory.
At AGIG, we are committed to sustainable gas delivery today, and tomorrow. Our Low Carbon Strategy
targets 10 per cent renewable gas in networks by no later than 2030, delivering 100 per cent
renewable gas developments from 2025, with full decarbonisation of our networks by 2040 as a
stretch target and by no later than 2050.
We are now delivering on our strategy by deploying low carbon gas projects. Our most advanced
projects include:
 Hydrogen Park South Australia (HyP SA) – A 1.25MW electrolyser to demonstrate the production
of renewable hydrogen for blending with natural gas (up to 5 per cent) and supply to more than
700 existing homes in metropolitan Adelaide. HyP SA is now operational.
 Hydrogen Park Gladstone – A 175kW electrolyser to demonstrate the production renewable
hydrogen for blending with natural gas (up to 10 per cnt) and supply to the entire network of
Gladstone, including industry. First production is expected in 2022.
 The Australian Hydrogen Centre (AHC) – A virtual centre delivering feasibility studies for 10 per
cent and 100% blending of renewable hydrogen into towns and cities in South Australia and
Victoria.
A range of other projects are in various stages of development, including several biomethane
projects.5
Once again, I would like to thank you for the opportunity to provide input into the biomethane method
package. Should you have any queries about the information provided in this submission please

3
Bioenergy Roadmap
4
Bioenergy Roadmap
5
See: https://stockhead.com.au/energy/green-energy-agig-and-delorean-team-up-in-plan-to-deliver-
biomethane-to-aussie-gas-networks/
contact Drew Pearman, Head of Policy and Government Relations
(drew.pearman@agig.com.au or 0417 544 731).

Yours sincerely,

Kristin Raman
Acting Executive General Manager People and Strategy