Key Takeaways
- Australia’s industrial gas users account for approximately 5% of greenhouse gas emissions, necessitating a shift towards green hydrogen and biomethane.
- Current production targets for renewable gases are significantly behind schedule, with green hydrogen needing a 600-fold increase to meet 2030 goals.
- The federal government must enhance support for green gas production, establish a national obligation for renewable gas use, and ensure a stable demand to meet emissions targets.
Challenges with Australia’s Gas Emissions
Australia’s heavy reliance on fossil gas, which contributes about 5% of its greenhouse gas emissions, presents a significant barrier to meeting emissions reduction targets. The focus must shift from fossil fuels to green alternatives, primarily green hydrogen and biomethane. However, current policies and investments are insufficient to facilitate this transition.
Despite billions allocated to support green hydrogen, progress remains stagnant. Large industrial gas users face a risk of missing emissions targets or shutting down unless the government promotes these essential green gas sectors.
Gas Usage Trends
Recent research highlights a decline in gas usage across various sectors in Australia. Electricity generation from gas has dropped by 11% since 2014, while manufacturing usage has been on a consistent downward trend since the early 2000s. Liquefied natural gas (LNG) exports are also believed to have peaked in 2022. To transition to a net zero energy system by 2050, gas emissions must cease entirely.
While many industries can reduce gas usage through electrification, certain sectors reliant on high-temperature processes cannot easily transition away from gas, necessitating alternative renewable solutions.
The Role of Renewable Gases
Green hydrogen, produced from renewable energy, can replace conventional gas in energy-intensive processes and as a feedstock for ammonia. Biomethane, made from organic waste, is chemically identical to natural gas but offers near-zero emissions, as its carbon is recently absorbed from the atmosphere.
The government has set ambitious production targets of 60 petajoules of green hydrogen and 10 petajoules of biomethane by 2030. Yet, as of 2025, Australia’s production stands at only 0.1 petajoules for both, highlighting the urgent need for strategic action.
Comparison with Global Efforts
Other countries have rapidly developed their renewable gas industries, significantly outpacing Australia’s efforts. For example, Italy has established a biomethane sector within a few years, contrasting sharply with Australia’s stalled progress despite A$2.25 billion allocated to hydrogen projects.
Recommendations for Improvement
To align with its renewable gas production targets, the Australian government needs to bolster support for producers. This includes restructuring funding to incentivize current hydrogen users to switch to green alternatives. Additionally, implementing a national renewable gas obligation could promote market demand, with significant benefits for renewable gas producers.
There is no time to lose; accelerating the production of renewable gases is critical for Australia to meet both its emissions reduction goals and its manufacturing needs.
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