Australian scientists are trying to lower the carbon footprint of the nation's livestock by selectively breeding sheep that emit less gas through burping.

Agriculture produces about 16 per cent of Australia's greenhouse gas emissions and two-thirds of that is methane produced by farm animals.

It is commonly thought methane produced by sheep is flatulence, but John Goopy from the New South Wales Department of Industry says that is a misconception.

"Ninety per cent of the methane that sheep and cattle and goats produce comes from the rumen, and that's burped out. Not much goes behind; that's horses," he said.

At a research station in Glen Innes in the state's north-west, scientists are focusing on exactly how much each sheep can burp.

Roger Hegarty from the Sheep Cooperative Research Council says by testing 200 animals from 20 different sires, they can work out who produces what.

"I don't know if you have ever been inside a sheep's tummy, but it's the most fascinating part of the ecology," he said.

"There are predators, pathogens, and we're trying to get a handle on who the organisms are and how we can play the system to get them to produce less methane and more of something useful."

Each sheep is fed, then shepherded into a booth.

Over a short period of time, scientists can get an exact reading of their output, then compare the results.

"We find sheep that do sit underneath the line in terms of how much methane they produce compared to predictions, and sheep that are over the top," Mr Hegarty said.

The best indicator of how much methane livestock produce is based on how much they eat.

Cattle produce about 70 kilograms of methane a year and sheep produce about one-tenth of that.

The long-term goal is to genetically breed a sheep that produces less methane.

"Genetically creating sounds a bit scary," Mr Hegarty said.

"[Actually] we're looking for natural variations so we'll steer the population that way."

Even in its preliminary stages, these scientists are confident their research will produce a sheep that burps less.