As Australia stands at the crossroads of energy transformation, bioenergy emerges as a powerful catalyst for rural economic development and sustainable power generation. This renewable energy source, derived from organic materials like agricultural waste, forestry residues, and dedicated energy crops, represents more than just an alternative to fossil fuels—it’s a transformative force reshaping our regional communities and energy landscape.
Unlike other renewable sources, bioenergy offers a unique advantage: it creates value from materials often considered waste while supporting year-round employment and industrial growth. From sugarcane-rich Queensland to the forestry regions of Tasmania, communities across Australia are discovering how converting biomass into energy can revitalize local economies while contributing to our national climate goals.
The potential is staggering: Australia’s bioenergy sector could generate up to $10 billion in new revenue by 2030, while reducing emissions and creating thousands of skilled jobs in regional areas. As global demand for sustainable energy solutions grows, our vast agricultural resources and technical expertise position us perfectly to become a leader in this emerging industry.
Australia’s Biomass Gold Mine

Agricultural Waste to Energy
Agricultural waste represents a golden opportunity for Australia’s renewable energy sector, transforming what was once considered rubbish into valuable bioenergy. From sugar cane bagasse in Queensland to wheat stubble in Western Australia, our farming communities are sitting on an energy goldmine.
Every year, Australian farms generate millions of tonnes of crop residues and animal waste that can be converted into clean energy. Through processes like anaerobic digestion and direct combustion, these agricultural by-products produce biogas and electricity, creating a win-win situation for farmers and the environment.
Leading the charge is the sugar industry, where mills already use bagasse to power their operations and feed excess electricity back to the grid. In the dairy sector, innovative farmers are using cow manure to generate biogas, powering their facilities while reducing methane emissions.
The beauty of agricultural waste-to-energy systems lies in their circular nature. Farmers not only generate additional income streams but also manage waste effectively, reduce fertiliser costs through digestate use, and contribute to Australia’s renewable energy targets. This approach demonstrates how smart farming practices can deliver both environmental and economic benefits to regional communities.
Forest Industry Byproducts
The forest industry in Australia generates significant biomass resources through its regular operations, creating valuable opportunities for sustainable energy production. Sawmill residues, including sawdust and wood chips, along with harvest residues such as branches and tree tops, provide readily available feedstock for bioenergy generation.
These byproducts, which were once considered waste, are now transforming into valuable resources. In Tasmania alone, forestry operations produce over 4.5 million tonnes of residues annually, much of which can be converted into renewable energy. Leading timber companies are increasingly integrating biomass energy systems into their operations, using their own waste products to power sawmills and processing facilities.
The sustainable use of forest industry byproducts for bioenergy offers multiple benefits. It reduces waste disposal costs, creates additional revenue streams for forestry businesses, and helps lower greenhouse gas emissions. Many regional communities are already benefiting from this circular economy approach, with local timber mills providing both employment and renewable energy to their areas.
Best practices ensure that only genuine waste materials are used for bioenergy, maintaining the balance between timber production and environmental conservation. This approach supports both the forestry sector’s sustainability goals and Australia’s renewable energy targets.
Economic Benefits for Regional Communities

Job Creation and Skills Development
The bioenergy sector is emerging as a significant employer in Australia, creating diverse job opportunities across rural and urban regions. The growing bioenergy workforce encompasses roles from skilled technicians and plant operators to research scientists and project managers.
In regional areas, biomass facilities are becoming vital employment hubs, offering steady work for local communities. Farm contractors, transport operators, and maintenance staff find new opportunities as these facilities expand. For instance, the Mount Gambier biomass plant in South Australia employs over 50 full-time staff while supporting an additional 100 indirect jobs in the supply chain.
The sector also drives skills development through partnerships with TAFEs and universities. Training programs are being established to equip workers with specialized knowledge in biomass handling, processing technologies, and facility management. These initiatives are particularly valuable for young Australians entering the renewable energy workforce and experienced workers transitioning from traditional energy sectors.
Looking ahead, industry projections suggest the bioenergy sector could create up to 26,200 new jobs by 2035, with many of these positions based in regional communities. This growth is supported by government initiatives and industry partnerships focused on developing the skilled workforce needed to drive Australia’s bioenergy future.
Local Business Growth
Across rural Australia, bioenergy projects are creating remarkable opportunities for local businesses, demonstrating significant local community benefits and economic growth. Take the case of Murphy’s Mill in regional Victoria, which transformed from a traditional timber processor into a thriving biomass supplier, now employing an additional 15 local workers and supporting several auxiliary businesses in transport and logistics.
In Queensland’s sugar-growing regions, several mills have diversified their operations to include bioethanol production, creating year-round employment opportunities and stabilising seasonal income fluctuations. The Mackay Sugar Mill, for instance, now generates excess power from bagasse (sugar cane waste), selling it back to the grid and creating a new revenue stream while supporting local farmers.
Small-scale operations are flourishing too. The Green Valley Biomass cooperative in Western Australia brings together local farmers who convert agricultural waste into pellets for heating, creating a sustainable micro-economy that benefits multiple family businesses. Local mechanics and equipment suppliers have expanded their services to support these emerging enterprises, while new consultancy firms specialising in bioenergy logistics have established themselves in regional towns.
These success stories demonstrate how bioenergy initiatives can revitalise rural economies, creating diverse business opportunities while supporting Australia’s transition to renewable energy. From equipment manufacturers to maintenance services, the ripple effects of bioenergy projects continue to foster sustainable growth across regional communities.
Success Stories: Bioenergy in Action
MSM Milling’s Biomass Project
Located in Central West NSW, MSM Milling’s innovative biomass project showcases how agricultural waste can power sustainable manufacturing. The facility, based in Manildra, replaced its LPG-fuelled boilers with a state-of-the-art biomass system that converts locally sourced wood waste into clean, renewable energy.
The $5.38 million project, supported by ARENA funding, demonstrates the viability of biomass in regional manufacturing. By using wood waste from forestry operations and sawmills within a 100-kilometer radius, the facility now produces steam and thermal energy to power its canola processing operations.
Since its implementation in 2019, the project has significantly reduced the company’s carbon emissions by approximately 70,000 tonnes annually – equivalent to taking 15,000 cars off the road. Beyond environmental benefits, the initiative has created new jobs in the region and established a sustainable market for previously underutilized wood waste.
MSM Milling’s success story serves as a blueprint for other regional manufacturers considering the switch to renewable energy. The project proves that agricultural businesses can simultaneously reduce operational costs, support local communities, and contribute to Australia’s renewable energy targets while maintaining competitive advantages in the global market.

Mackay Renewable Biocommodities Pilot Plant
Located in the heart of Queensland’s sugar country, the Mackay Renewable Biocommodities Pilot Plant stands as a testament to Australia’s commitment to sustainable energy innovation. This cutting-edge facility, established through collaboration between Queensland University of Technology and industry partners, serves as a vital research hub for converting agricultural waste into valuable bioproducts and biofuels.
The facility specialises in transforming sugarcane bagasse, a fibrous by-product of sugar production, into sustainable products ranging from biofuels to biochemicals. What makes this plant particularly impressive is its ability to process up to 50 tonnes of biomass per week, operating at a scale that bridges the gap between laboratory research and commercial implementation.
Researchers at the facility work on groundbreaking projects that include developing advanced biofuels, creating sustainable packaging materials, and exploring novel ways to utilise agricultural waste. The plant’s location in Mackay strategically positions it within Australia’s largest sugarcane-growing region, ensuring ready access to feedstock and fostering strong connections with local agricultural communities.
The facility has become a cornerstone for Queensland’s bioeconomy, attracting international attention and investment while providing valuable training opportunities for the next generation of bioenergy specialists. Its success demonstrates how regional Australia can lead the way in sustainable innovation.
Future Growth Opportunities
Government Support and Initiatives
The Australian government has demonstrated strong commitment to advancing bioenergy through various renewable energy initiatives and support programs. The Bioenergy Roadmap, launched in 2021, outlines a clear pathway for the industry’s growth, backed by substantial funding commitments exceeding $30 million. This support extends to regional communities through targeted grants and incentives designed to boost biomass production and processing facilities.
State governments have also stepped up with their own initiatives. Victoria’s Renewable Energy Action Plan and Queensland’s Biofutures 10-Year Roadmap exemplify how local authorities are fostering innovation in the bioenergy sector. These programs offer financial assistance, technical support, and regulatory frameworks that make it easier for businesses to enter the market.
The Clean Energy Finance Corporation plays a crucial role by providing low-interest loans and co-investment opportunities for bioenergy projects. Their focus on commercial-scale facilities has helped transform innovative ideas into reality, creating sustainable energy solutions while supporting local economies. These government initiatives are complemented by research funding through ARENA (Australian Renewable Energy Agency), ensuring Australia remains at the forefront of bioenergy innovation.
Investment Prospects
The bioenergy sector in Australia presents compelling investment opportunities, particularly in regional areas where biomass resources are abundant. With government support through initiatives like the Emissions Reduction Fund and renewable energy targets, investors can benefit from both environmental and financial returns.
Small-scale projects, such as converting agricultural waste to energy in rural communities, offer attractive entry points for local investors and farming cooperatives. These projects typically require initial investments of $2-5 million and can achieve payback periods of 5-7 years while providing steady revenue streams from power generation and waste management services.
Larger institutional investors are increasingly eyeing utility-scale bioenergy facilities, which can require investments upward of $50 million but offer significant returns through power purchase agreements and renewable energy certificates. The growing demand for sustainable aviation fuel and biogas presents additional opportunities for forward-thinking investors.
Indigenous communities are also emerging as important partners in bioenergy projects, combining traditional land management practices with modern technology to create sustainable energy solutions. These partnerships often qualify for special funding and support, making them particularly attractive for socially conscious investors.
Remember, successful bioenergy investments typically combine strong community engagement, secure feedstock supply chains, and robust off-take agreements.
Bioenergy stands as a powerful catalyst for Australia’s regional development, offering a sustainable path forward for communities across the continent. As we’ve seen through numerous success stories, from sugar mill waste conversion in Queensland to forestry residue utilization in Victoria, bioenergy projects are creating jobs, diversifying local economies, and fostering innovation in rural areas.
The future outlook for bioenergy in regional Australia is particularly promising. With increasing investment in research and development, advancing technologies, and growing support from both government and private sectors, we’re witnessing a transformation in how rural communities approach energy production and waste management. The industry is expected to create thousands of new jobs by 2030, while helping Australia meet its renewable energy targets.
Looking ahead, bioenergy will play an even more crucial role in building resilient regional economies. As more communities embrace biomass projects, we’re likely to see a ripple effect of benefits: improved agricultural practices, stronger local supply chains, and enhanced energy security. The path forward is clear – bioenergy isn’t just an environmental solution; it’s a powerful driver of regional prosperity and sustainable development across Australia.