A circular economy project in New South Wales has received a government grant to develop a biomethane production facility using agricultural organic waste from the Riverina region.

Optimal Renewable Gas (ORG) has been awarded funding under the NSW Low Carbon Product Manufacturing Grant programme to accelerate development of the Griffith Biohub, which will use anaerobic digestion to convert agricultural residues into biomethane for injection into the existing gas network.

The NSW grant scheme is intended to support investment in industrial facilities and advanced manufacturing capabilities to help decarbonise the state's economy.

The Griffith Biohub is designed as a circular economy project, returning nutrients to the agricultural land that supplies its feedstock while generating a renewable gas compatible with existing infrastructure and appliances, requiring no modification by end users.

Gas infrastructure company Jemena, which has an memorandum of understanding with ORG focused on developing the foundations of a renewable gas market in Australia, welcomed the award.

The company described biomethane as "a fuel with a long-term future" and said the project represented "another exciting step in Australia's renewable gas journey."

Jemena operates the Malabar Biomethane Injection Plant, which it says was the first facility in Australia to produce and inject biomethane directly into the natural gas network.