25 March 2026 

Global fuel supply disruptions are a timely warning for New South Wales, with forecasts pointing to a tightening gas market within the next two years. For the Illawarra, Shoalhaven and Southern Highlands, this risk also presents a clear opportunity to lead the state’s transition to renewable gas - particularly biomethane.

 As one of the few regions in NSW with two local governments managing their own water supply and infrastructure, and home to significant industrial, manufacturing and agricultural activity, the region is uniquely positioned to develop a region‑scale biomethane industry that strengthens energy security, reduces emissions and drives local economic growth.

 Biomethane is a renewable gas produced from organic waste streams such as wastewater sludge, food waste, agricultural residues and landfill gas - all of which are present at scale across the Illawarra, South Coast and Highlands. With major wastewater infrastructure, a deep‑water port, steel and advanced manufacturing capabilities, a strong agricultural sector and growing population centres, the region has the feedstock, infrastructure and workforce needed to support early deployment.

 Critically, Jemena’s Malabar Biomethane Injection Plant has already demonstrated that renewable gas can be safely injected into the existing gas network without disruption. This provides an immediate and practical pathway to stabilise energy supply without requiring businesses to replace boilers, burners or commercial equipment. This is particularly important for manufacturing, food processing and hospitality, where gas remains essential and electrification is often complex or cost‑prohibitive.

 Gas underpins a significant share of the NSW economy, supporting households, industry and jobs. In hospitality alone, nearly two‑thirds of businesses rely on gas as their primary energy source, making supply reliability a direct issue for business viability, employment and community services.

 Internationally, regions across Europe have rapidly scaled biomethane, with more than 1,500 facilities now operating, delivering both emissions reductions and strong regional economic benefits.

 “Biomethane presents a significant opportunity to create jobs and deliver an economic boost for our region, while also playing a practical role in stabilising energy supply and cutting emissions,” Ms McCarthy said.

 Across NSW, untapped landfill, wastewater and agricultural waste could generate up to 137 petajoules (PJ) of biomethane, enough to meet the state’s entire current gas demand of approximately 130 PJ.

 For the Illawarra, Shoalhaven and Southern Highlands, developing a local biomethane industry would deliver multiple benefits:

  • increased energy resilience during a period of global volatility
  • emissions reduction without creating stranded assets
  • new local jobs across waste, utilities, manufacturing and energy
  • stronger circular‑economy outcomes by turning waste streams into energy assets

 The NSW Government’s decision to include biomethane in the Renewable Fuel Scheme from 2028, alongside committed funding, is an important first step. However, regions such as the Illawarra, Shoalhaven and Southern Highlands are well placed to go further - by aligning energy, water, waste and industrial policy to accelerate deployment at scale.

 With abundant wastewater, agricultural and organic waste resources, the region has the potential to become a renewable gas hub for NSW, demonstrating how regional strengths can be leveraged to address energy risk while supporting jobs, industry and long‑term economic resilience.

 The current fuel supply pressures are a warning - but for this region, they are also a moment to act. By investing now in biomethane and circular‑economy infrastructure, the Illawarra, South Coast and Highlands can play a critical role in stabilising NSW’s energy future while driving a new phase of sustainable regional growth.

 “This is the time for us to come together,” Ms McCarthy said. “Local government has the land and infrastructure, the State Government has the capacity, and industry needs the gas. It’s time to start working as one region for jobs and growth.”

 To move from opportunity to delivery, Business Illawarra is calling for the establishment of a dedicated biomethane taskforce to investigate investment opportunities and accelerate development. A taskforce bringing together local government, State Government, industry, utilities and water authorities would ensure that planning, infrastructure, waste and energy policy are aligned to support early projects and attract private investment.

________________________________________________________________________

Media Contact

Coralie McCarthy

Director, Business Illawarra

M: 0417 431 564

E Coralie.McCarthy@businessnsw.com

— ENDS —

About Business Illawarra

Business Illawarra is the region’s peak business organisation; a not-for-profit advocacy group dedicated to the economic development of the Illawarra, Shoalhaven and Southern Highlands. On behalf of our members, we develop policy and are the leading voice representing business across the region.

Business Illawarra is owned and supported by Business NSW, the state's leading advocacy voice for business across NSW. Of the few enduring, independent, not-for-profit organisations in Australia, Business NSW is the only one focused on the wellbeing of the business community. Our purpose has always been to provide a strong advocate to all levels of 

government on issues affecting businesses, undertake research to guide greater public and private sector investment in economic infrastructure, and support the development of workforce capacity and skills in our region.