Victoria has released a landmark announcement, committing to legislate a 4.5 petajoule (PJ) renewable gas target for industrial users by 2035, making it the first such initiative in Australia.
This marks a crucial step toward decarbonising heavy industries. However, the shift presents challenges for industries reliant on traditional gas, including agriculture, manufacturing, and food production.
As businesses with high gas consumption prepare for future compliance, strategic decisions around renewable gas procurement will become essential.
Our team at Choice Energy is here to help you better understand the energy market. If you’re looking to get ahead and capitalise on better deals for early adopters, book a free energy assessment today.
What Is the Renewable Gas Guarantee?
The Renewable Gas Guarantee is a requirement for gas retailers to source a portion of their supply from renewable gas, such as biomethane and green hydrogen, and supply it to their industrial customers.
The goal is to supply 4.5 petajoules (PJ) of renewable gas to Victoria’s industrial sector by 2035. This is projected to account for about 6% of current industrial gas consumption across the state.
In order to meet this target, the scheme will be rolled out in phases:
- 2027: Introduction of a renewable gas certificate scheme, similar to how renewable electricity is tracked and incentivised.
- 2030: Interim milestone of 1 PJ of renewable gas supply.
- 2035: Full target of 4.5 PJ comes into effect.
Why is this Scheme Necessary?
The Renewable Gas Guarantee is part of Victoria’s Gas Substitution Roadmap and supports the state’s decarbonisation efforts. While electrification and energy efficiency are key to reducing emissions, electrification isn’t feasible for all industries. With the gas sector contributing 16% of the state’s greenhouse gas emissions, the Renewable Gas Guarantee aims to promote cleaner gas alternatives.
Implications for Industrial Gas Users
Businesses relying on gas must consider the impact of this policy now—not in 2035. The new target will influence the sourcing, pricing, and supply of gas well before the 2035 deadline.
For industries in manufacturing, food processing, and agriculture, this could mean:
- New compliance requirements related to renewable gas content
- Adjustments to contract terms as suppliers adapt to renewable gas
- Increased scrutiny on sustainability and emissions
Additionally, traditional gas supply faces challenges, with residential gas being phased out and concerns about the long-term viability of natural gas infrastructure. These factors will increase complexity for industrial users seeking reliable, cost-effective gas.
Although the scheme targets retailers, its costs and complexities will likely affect the entire supply chain. Price increases, limited procurement options, or changing contract structures may follow. Early preparation can give businesses a competitive edge.
Looking for some expert guidance? Our energy brokers will help you navigate complex energy transitions every step of the way.
What Should Businesses Do To Get a Better Gas Rate?
Victoria’s renewable gas transition presents both a challenge and an opportunity for industrial users. While supply remains limited and pricing unclear, early action can help secure favourable contracts and strengthen sustainability credentials.
Here are the key steps to take:
Review your gas contracts
Start by reviewing your gas contracts, renewal dates, annual usage, and flexibility to avoid being caught out by future compliance changes.
Explore renewable gas supply options
See what renewable gas options are available in your area and with your supplier. Biomethane partnerships and hydrogen-blend readiness are two key areas gaining traction.
Monitor your pricing and certificates
With the renewable gas certificate scheme kicking off in 2027, businesses will need to keep a close eye on how pricing signals evolve (or we can do that for you!).
Partner with the right energy broker
Choice Energy works with industrial users across Australia to navigate emerging energy policies, including renewable gas and hydrogen integration. Whether you need help with energy procurement for small businesses, multi-site energy procurement, or large-scale commercial energy procurement, we’ll help you make sense of this transition and turn policy into practical value.
Want tailored advice for your business? Book your free energy assessment with us today.
