Carbon - In focus: Biomethane ACCU pathway uncertain

Australia will explore expanding the carbon-crediting pathway for its nascent biomethane industry, but a potential preference for renewable gas certificates over Australian Carbon Credit Units (ACCUs) may curb that development, stakeholders said.

The Australian government last month prioritised the creation of a new Alternative Waste Treatment ACCU method that could boost emissions abatement by offering a potentially longer crediting period and by adding biomethane generation as an eligible activity.

This could potentially promote a higher uptake of ACCU projects for biomethane facilities in Australia, which would help developers and investors to finance new plants, as well as increase the future supply of carbon credits that companies use in the compliance market's safeguard mechanism, or for voluntary purposes.

But overlaps between ACCUs and new certification options — the renewable gas guarantees of origin (RGGOs) under GreenPower's Renewable Gas Certification and the future product guarantee of origin (PGO) certificates under the Clean Energy Regulator (CER's) managed guarantee of origin GO scheme — mean that the carbon-crediting pathway for biomethane may be limited, according to industry participants.

Limited ACCU uptake

Participation in ACCU projects has been very limited under existing or expired methods, although this is mostly because there are still very few biomethane projects in Australia.

There are just two active ACCU methods that support biomethane facilities: the Animal Effluent method, which focuses on reducing methane emissions from animal waste by capturing and treating effluent, and the Reducing Methane Emissions from Landfill Gas method, which targets methane reduction from landfill sites by capturing and destroying landfill gas, converting it to electricity, or upgrading it into biomethane.

Of nearly 30 projects currently registered under the Animal Effluent method, only two involve biomethane facilities, according to the CER. And there are no projects registered under the Reducing Methane Emissions from Landfill Gas method, which was only made late last year.

There is also one project involving biomethane production registered under the Domestic, Commercial and Industrial Wastewater method, which expired on 31 March 2025.

None of these three biomethane projects have received ACCUs yet, nor projects registered by bioenergy developer Delorean that do not specifically mention biomethane with the CER but are expected to generate that product (see table).

"Since the making of the biomethane methodologies in 2022, the CER has received enquiries about the potential eligibility of biomethane projects under the ACCU Scheme," a spokesperson told Argus. "There has not been any particular trend in these enquiries and the CER does not produce forecasts on biomethane production for future ACCU project generation."

LMS Energy joins Delorean and other developers

The most recent of these projects — the Wasleys biomethane project in South Australia (SA) — was registered with the CER in December by Australia's largest landfill gas operator, LMS Energy, in partnership with Australian pork producer SunPork.

The A$24.1mn ($16.95mn) project, which could become Australia's first commercial-scale agricultural renewable natural gas facility, will receive A$10mn of funding from the Australian Renewable Energy Agency (Arena).

LMS plans to use anaerobic digestion to collect biogas generated from animal effluent and upgrade it to biomethane for use as a natural gas substitute. This would reduce SunPork's scope 1 greenhouse gas (GHG) emissions. Currently, biogas released from uncovered piggery effluent ponds is the largest source of emissions for the pork industry.

If successful, the project could overcome regulatory barriers by establishing and demonstrating clear pathways for the recognition of agricultural biomethane in carbon crediting and renewable gas certification schemes, according to Arena.

LMS did not reply to questions about the timeline of the project, plans for future biomethane facilities or challenges around risks for double-counting or overlap for ACCUs and certificates like RGGOs and PGOs.

Delorean, which last year signed an agreement with utility Origin Energy to sell biomethane and the corresponding RGGOs from its SA1 Salisbury bioenergy facility in SA, did not reply either to questions about the expected interplay between ACCUs and RGGOs from its projects.

The company has said its projects would have potential for several products and revenue sources, including biomethane, RGGOs, ACCUs and biogenic liquid carbon dioxide (LCO2).

Biomethane from SA1 Salisbury will be delivered via the gas network following a connection agreement last year with gas network Australian Gas Networks (AGNL), part of Australian Gas Infrastructure (AGIG). AGIG did not reply to questions either.

RGGOs and ACCUs to be stapled and retired together

Under rules set by GreenPower, ACCUs created from projects under the Animal Effluent, Reducing Methane Emissions from Landfill Gas, or any other methods, would need to be stapled with RGGOs in case the latter are also created in respect of the same activity. The ACCUs and RGGOs would then need to be retired together to the same entity, to avoid double counting, GreenPower's renewable fuels team lead Brad Bailey told Argus.

There is just one facility currently accredited to create RGGOs — gas pipeline and power distribution firm Jemena's Malabar plant in Sydney in New South Wales (NSW). RGGOs have been already issued to the 95 TJ/yr (2.5mn m³/yr) facility, but not yet retired.

Two biogas or biomethane projects are in the process of obtaining accreditation, and more than 30 projects have expressed interest in participating, Bailey said.

While it would be up to the end customer to surrender either the ACCUs or RGGOs stapled together, Jemena anticipates the use of RGGOs for market trading as these certificates can be used by consumers for emission reduction rather than offsets, renewable gas general manager Suzie Jakobovits said.

"Jemena supports additional ACCU methods that recognise biomethane as low-emission fuel. But while ACCU pathways are valuable, more recent policy advancements have provided a more valuable incentive for biomethane production," she said, noting the renewable gas certification schemes and their allowed use from July to reduce scope 1 emissions under the National Greenhouse and Energy Reporting (NGER) scheme.

Jemena has not been developing any further biomethane projects of its own. It has instead signed initial contracts with project developers including Optimal Renewable Gas (ORG), Valorify, Sojitz and Gwydir Circular Economy to potentially connect their planned biomethane facilities into its gas network.

"It will be up to the biomethane producer to determine whether to register for ACCUs and/or renewable gas certificates," Jakobovits said.

More support needed

For ORG managing director Mike Davis, the new Alternative Waste Treatment ACCU method could be potentially more flexible to transfer emission benefits from the current pathways to anaerobic digestion plants.

But the company sees RGGOs as "more valuable than ACCUs" as they are recognised as a scope 1 emission reduction pathway rather than an offset, he said.

Other biomethane developers like Valorify, as well as major waste management firms such as EDL Energy, Cleanaway and Veolia — which are among Australia's largest landfill gas ACCU project operators — did not respond to requests for comment.

Waste management firm LGI said it is not currently involved in biomethane projects.

Australian gas pipeline operator APA declined to comment. The firm launched in 2024 a public round of expression of interest for potential biomethane supply projects, but decided not to proceed because of a combination of technical and commercial factors unique to the project.

Beyond the RGGO, PGO and ACCU pathways and the NGER change last year, the biomethane industry will need further government policy and financial support, Jakobovits said.

She highlighted the NSW government's A$170mn Renewable Fuel Strategy launched in November to support renewable fuel and biomethane production in the state.

"This support is only available in NSW. Other states or federal government support is required to stimulate biomethane production in other states," she said, suggesting policies like the development of a national renewable gas policy approach and the recognition of biomethane as a priority industry under the Future Made in Australia and as a priority investment area within Arena.