Digging deep: This is why a drilling rig has taken up residence at the tip

Queensland company LGI says it will design, install, operate and maintain the expanded gas extraction system as part of a partnership with Bathurst Regional Council.

It will come about 16 years after council installed a methane gas flare at the tip to reduce the region's carbon footprint.

LGI says phase one of its project at Bathurst will involve drilling 38 gas wells and connecting a network of pipes to a flare unit.

Council says decomposing organic matter produces landfill gas which is about 50 per cent methane - described as a very potent greenhouse gas.

This biogas is collected through a system of wells and pipes located within the landfill and funnelled to a flare system at the base of the landfill, where it is burned to convert the methane to less harmful gases, according to council.

"LGI's carbon-cutting blueprint is becoming very popular following the Australian Government's recent commitment to cut emissions by 43 per cent by 2030," LGI founder and managing director Adam Bloomer said.

"Emissions from landfills without biogas management systems can be a significant problem and can contribute up to 80 per cent of a council's carbon footprint."

He said LGI had been "working extensively" with councils including at Nowra, Bega, Shellharbour and Grafton to capture biogas and decrease emissions.

He said LGI's partnership with nine NSW councils had allowed the company to reduce CO2e emissions by 936,000 tonnes and, "to put that number into context, it's the equivalent of planting 15.4 million seedlings for the next decade, or removing 23,030 cars off the road for a year".

He said LGI's partnership with Bathurst Regional Council will mean council receives the Australian Carbon Credit Unit (ACCU) revenue generated by the project.

Mayor Jess Jennings said the project involves a significant upgrade of the existing gas system.

"The new biogas system will allow better collection of the biogas and is an important step towards meeting council's adopted emissions reduction targets of 25 per cent by 2025 and 60 per cent by 2035," he said.

"It also builds on recent energy efficiency and renewable energy achievements which have reduced council's energy related emissions by more than half."

LGI says it also has the technology to convert biogas extracted from landfills into renewable energy.

Council says the construction phase of the project at the tip, which started in November, is estimated to take 12 weeks.