Where Bioenergy Fits in Australia’s Net Zero Plan (2025 Update)
The Bioenergy Roadmap from ARENA sets out how waste and biomass become energy for transport, industry, heat, power and gas. First released in 2021 and still relevant in 2025, it now fits within the government’s Future Made in Australia agenda and net zero plan.
Key Findings: Jobs, Emissions, Waste, Security
Major Growth Potential
Bioenergy currently provides about 3% of Australia’s total energy and roughly 47% of its renewable energy consumption. With concerted effort, bioenergy could supply up to 20% of Australia’s total energy by the 2050s. This represents a huge scale-up from today and underscores bioenergy as an important piece of Australia’s future energy mix alongside solar and wind.
Economic and Environmental Benefits
By 2030, a strong bioenergy sector could add around $10 billion annually to GDP, create 26,000 regional jobs, cut emissions by 9%, and divert an additional 6% of organic waste from landfill. Producing more fuel domestically also strengthens energy security.
Regional and Agricultural Opportunities
Farmers and rural industries stand to benefit most. Residues such as crop stubble, sugarcane waste, and livestock manure can be converted into fuel and energy instead of being burned or left to decompose. This creates new income streams while reducing pollution.
Hard-to-Abate Sectors
Bioenergy is especially valuable in industries that cannot easily electrify. Heavy transport, aviation, and industrial heat can all use bio-based fuels and energy to lower emissions alongside technologies like hydrogen.
Alignment with Climate Goals
While first released under the now-retired Low Emissions Technology Statements, the Roadmap remains a guide for net zero by 2050. Its recommendations now inform the government’s Future Made in Australia agenda and broader decarbonisation strategy, helping direct investment and policy toward sectors where bioenergy has the strongest advantage.
Sector Opportunities: Transport, Agriculture, Waste, Heat & Power
Bioenergy can take many forms (biogas, biofuels, biomass power, etc.) and the Roadmap highlights opportunities across multiple sectors:
Transport Fuels
Road Transport:
Biofuels such as ethanol, biodiesel, and renewable diesel can displace petrol and diesel, especially in heavy trucks and machinery where electrification is limited.
They use existing infrastructure and vehicles, meaning emissions can be cut immediately.
Under the Roadmap’s growth scenario, biofuels could supply 7% of Australia’s road transport fuel by the 2030s (over 2.6 billion litres per year).
Aviation:
Sustainable Aviation Fuel (SAF) is one of the few viable near-term options to decarbonise aviation.
With early investment, Australia could produce 1.9 billion litres of SAF annually by the 2030s, meeting around 18% of national demand.
By 2050, bio-jet fuels could supply up to 45% of aviation fuel, if cost gaps are closed through policy and partnerships.
Shipping & Rail:
Biofuels can play a role where electrification is impractical, providing immediate emission reductions using existing fleets.
Agriculture and Rural Industries
Residues as Feedstock:
Crop stubble, sugarcane bagasse, food waste, and manure can be redirected to energy production instead of burning or decomposition.
Farmers can generate new income streams while reducing methane and pollution.
On-Farm Energy:
Anaerobic digesters can turn manure into electricity and fertiliser by-products.
Boilers using residues or woodchips can provide heat for crop drying and greenhouses.
Dedicated Energy Crops:
Potential to grow biomass on marginal or under-utilised land.
Must be managed under sustainability criteria to avoid food vs fuel conflicts and environmental risks.
Waste and the Circular Economy
Organic Waste-to-Energy:
Australia generates millions of tonnes of organic waste annually, much of it landfilled.
Converting organics into energy could divert an extra 6% of waste from landfill by 2030.
Examples and Benefits:
Logan City (Queensland): Biosolids gasification plant cuts ~6,000 tonnes of emissions per year while producing energy and biochar.
Sydney Malabar Plant: Produces biomethane injected into the gas grid, supplying ~6,300 households with renewable gas annually.
Policy Levers:
Higher landfill levies and bans on organic waste in landfill.
Consistent waste separation policies to improve feedstock quality.
Industrial Heat, Power & Fuel Security
Renewable Heat:
Industry accounts for large shares of Australia’s emissions through fossil-fuelled heat.
Bioenergy could supply up to one-third of industrial heat demand (244 PJ per year) by the 2030s, especially in food, metals, chemicals, and paper.
Electricity Generation:
Bioenergy is dispatchable, unlike solar and wind.
By the 2030s, it could deliver 14 TWh of electricity annually (~8% of generation).
Existing examples include sugar mills co-generating power from bagasse.
Renewable Gas:
Biomethane is chemically identical to natural gas and can be injected into pipelines with no appliance changes.
By the 2050s, biomethane could supply 20–30% of Australia’s gas demand.
First demonstration already underway at Sydney’s Malabar plant, with policy changes (National Gas Law amendments) giving industry certainty.
Implementation Priorities 2025–2030
Achieving Australia’s bioenergy vision requires a coordinated push from government, industry, and communities. The Roadmap lays out several priority areas and actions to pursue between now and 2030, as well as addressing key challenges:
Strategic Focus Areas
Hard-to-Abate Markets – Prioritise bioenergy in sectors like industrial heat, aviation (SAF), and renewable gas grid injection, where few low-carbon alternatives exist.
Complementary Markets – Enable bioenergy to supplement technologies like EVs or hydrogen in transport, and provide dispatchable electricity to support grid stability.
Developing Biomass Resources – Invest in mapping feedstock potential, improving collection systems (e.g. organic recycling), aligning waste policies, and ensuring sustainability.
Building Supportive Ecosystems – Strengthen the industry by establishing standards, financing channels, skills development, and public awareness programs.
Near-Term Actions (2021–2025)
Policy and Regulatory Reform – Enable carbon credit eligibility for renewable gas (e.g. biomethane), and update fuel standards to support higher biofuel blends.
Pilot Funding & Demonstrations – Fast-track R&D for key areas like SAF and industrial heat with co-funding. The government injected about $33.5 million to support these early-stage projects.
Feedstock Supply Improvements – Enhance organic waste separation and expand data collection on biomass supply, including through Australia’s National Biomass Assessment.
Public Engagement & Knowledge Sharing – Promote successful bioenergy models and create community guidelines to build trust and avoid “not in my backyard” resistance.
Medium-Term Actions (2025–2030)
Commercial Scaling – By 2030, the goal is multiple full-scale SAF, biomethane, renewable heat, and bio-power facilities operational, driven by private capital and supportive policies.
Market Integration – Bioenergy should become a standard part of energy and transport systems. That means grid operators, fuel suppliers, and regulators treat bioenergy on par with other low-emission options.
Ongoing R&D & Innovation – Encourage advancements in next-gen biofuels and biorefineries that yield combined energy and materials.
Key Challenges & Solutions
Cost Competitiveness – Bioenergy remains more expensive than fossil fuels. Address this via subsidies, carbon incentives, and mandated blending; scale and innovation should drive costs down toward parity.
Feedstock & Logistics – Biomass is bulky and dispersed. The Roadmap suggests developing regional bio-hubs for aggregation and streamlining logistics.
Regulatory Alignment – Existing laws didn’t anticipate bioenergy needs. Progress has started: for instance, amendments to the National Gas Law now allow biomethane injection. Fuels regulations and waste policies also need harmonising.
Community & Awareness – Bioenergy still lacks public visibility and trust. Consistent, transparent engagement and sustainability certification are vital to build support.
Sustainability Assurance – Bioenergy must not harm soil, forests, or food systems. The Roadmap calls for strong sustainability criteria, prioritising waste and residues before considering purpose-grown biomass.
2025 Status Check
The strategic themes are still valid and reflect current policy priorities.
Public funding surges ($33.5M in early implementation) and active pilots (e.g., SAF, biomethane) are underway.
Regulatory changes like biomethane rules and waste-to-energy frameworks are progressing.
Feedstock data and public awareness efforts continue to evolve.
Potential for Industry Engagement and Benefits
The Bioenergy Roadmap creates a framework, but achieving its goals depends on active participation from companies. The opportunities are wide-ranging, spanning fuel producers, farmers, utilities, manufacturers, and service providers.
Industry Opportunities in Bioenergy
Actionable Steps for Companies
Audit waste and residues: Identify organic by-products in your operations that could be converted to energy or supplied as feedstock.
Start with pilots: Launch feasibility studies or small-scale projects to test bioenergy applications. ARENA and state programs often co-fund these.
Forge partnerships: Collaborate across the value chain – feedstock providers, technology firms, off-takers, and financiers. Explore regional biohub models.
Monitor incentives: Track emerging policies such as renewable fuel standards, landfill diversion programs, or carbon credit opportunities for biomethane.
Invest in skills: Upskill staff or bring in expertise to manage new bioenergy systems. Building capability now positions firms for growth.
Engage in networks: Join industry groups like Bioenergy Australia to access knowledge, case studies, and policy developments.
Communicate benefits: Share results – reduced emissions, cost savings, new revenue – with stakeholders to build credibility and public support.
Conclusion
In conclusion, Australia’s Bioenergy Roadmap provides a clear, actionable plan to scale up bioenergy in the coming decade. It underscores that bioenergy can simultaneously reduce waste, cut emissions, create jobs, and improve energy security when developed sustainably.
For policymakers, the Roadmap is a call to align regulations, funding, and information campaigns to unlock bioenergy’s potential. For companies and industries, it’s an invitation to innovate and invest – to turn organic by-products into profit and to fuel operations in cleaner ways.
By taking the practical steps outlined above, decision-makers and sustainability professionals can help integrate bioenergy into Australia’s broader transition to a low-carbon economy.
The Bioenergy Roadmap shows that with the right support, bioenergy could be a $10 billion industry by 2030, offering tangible benefits to businesses large and small, while making a meaningful contribution to Australia’s climate and waste-reduction goals.
The time to engage with this opportunity is now, so that over the next decade we witness the growth of a robust, sustainable bioenergy sector powering Australia’s future. See where your business fits: book a 30-min assessment.
You can read the full Australia’s Bioenergy Roadmap here.
Article by
Carolina Teixeira
Marketing Lead
Published on
8 Sept 2025
