Unlocking the renewable natural gas opportunity
How Australia can embrace an untapped energy source.
Renewable natural gas (RNG) could play an important role in lowering Australia’s emissions by helping to decarbonise hard-to-electrify sectors. The RNG industry is still in its early stages in Australia, and the CEFC is working to foster industry collaboration, develop financing solutions and facilitate investment in the sector.
About this Explainer
The renewable gas opportunity
September 2026
RNG, also known as biomethane, has the potential to play a significant role in Australia’s decarbonisation journey. We explore the challenges and opportunities in expanding the use of RNG in Australia and how to overcome the barriers to broader adoption.
View the CEFC explainer
Sector Potential
Gas is critical for many manufacturing processes that are difficult or not commercially viable to electrify. RNG offers a way to decarbonise these hard-to-abate sectors by using a renewable alternative to natural gas. RNG can be used in current gas pipelines, industrial equipment and household appliances without the need for expensive retrofit or replacement.
Australia could potentially produce enough RNG each year to meet more than 70 per cent of Australia’s total end use gas demand.
Substituting RNG for natural gas in Australia could remove up to 23 million tCO2-e annually.
While the technology to produce and distribute RNG is mature and widely deployed in markets such as Europe and North America, its use in Australia is still emerging.
The challenges facing RNG include:
- Commercially viable cost structures
- Nationally supportive policy settings
- Connecting RNG to the gas grid
- Raising awareness and generating demand.
Unlocking this opportunity will require coordinated action from policymakers, gas network operators, industrial users, feedstock providers and capital providers.
The Role of the CEFC
The CEFC is working to advance the use of RNG by fostering industry collaboration and developing financing solutions that address market gaps and facilitate investment in the sector.
The CEFC can:
- Provide targeted finance to help accelerate commercialisation, build investor confidence and scale solutions.
- Finance infrastructure required for connecting RNG to the grid or the infrastructure required to upgrade a transmission connection.
- Provide concessional financing to enable commercially viable projects.
Previous CEFC investment has included finance towards the Richgro anaerobic digestion plant in Western Australia and finance to Cleanaway that supports programs encouraging behaviour change.
