Biogas industry calls for recognition of biomethane as a Net Zero fuel within UK ETS in open letter to Secretary of State Ed Miliband

Biogas industry calls for recognition of biomethane as a Net Zero fuel within UK ETS in open letter to Secretary of State Ed Miliband

The Anaerobic Digestion and Bioresources Association (ADBA) alongside leading businesses from UK industry and the biogas sector, has written to the Secretary of State for Energy Security and Net Zero, Ed Miliband MP, calling for the urgent recognition of biomethane as a Net Zero fuel. The letter warns that failure to act swiftly risks jeopardising the UK’s Net Zero targets and putting over £8 billion of private sector investment at risk.

The letter, co-written by Chair and former Secretary of State Chris Huhne and Chief Executive Charlotte Morton OBE, has been signed by over 90 industry representatives and businesses, including one of the UK’s biggest trade unions, the GMB, and each of Great Britain’s and Northern Ireland’s gas distribution networks. The signatories call on Ed Miliband to confirm that biomethane will be treated as a net zero fuel within the UK Emissions Trading Scheme (UK ETS) to fully recognise its value within our net zero ambitions, and to unlock global investment in this primed and ready to grow green sector.

Commenting on the letter, ADBA Chair Chris Huhne said “The UK biogas industry is being unfairly penalised under the current rules of the Emissions Trading Scheme (ETS). Biomethane – an often carbon negative technology – is treated the same as climate-wrecking fossil gas. It makes no sense, and it’s holding back investment in the infrastructure we need to reach net zero.”

Andy Prendergast, National Secretary of the GMB, said of the union’s support for the letter: “The gas network not only heats and powers millions of homes and businesses, it also supports hundreds of thousands of well-paid jobs. Recognising green gases like biomethane as Net Zero fuels under the UK Emissions Trading Scheme not only gives us a path towards net zero, it also provides a way to protect those livelihoods whilst building a viable export industry. We need to seize this opportunity with both hands.”

The letter highlights the important role biomethane could play in net zero if ETS recognition is granted, particularly in the hard to decarbonise areas such as chemicals and manufacturing sectors.

It states. “[Biomethane] supports rural economies, displaces fossil fuels, and cuts methane emissions. […] It also plays a critical role in decarbonising high-value industrial sectors that are essential to the UK’s national security and economic resilience.”

Through this open letter, ADBA and the biogas industry call on the Secretary of State to:

• Confirm that biomethane injected into the UK’s gas grid will be eligible under the UK ETS as a net zero fuel in the same way as sustainable aviation fuel
• Ensure UK ETS rules fully reflect biomethane’s full value
• Set out a clear timeline for implementation to give the market confidence,

They conclude: “Developers and investors urgently need clarity and confirmation that the full net zero value of biomethane will be recognised. Further delays threaten to stall a sector that is ready to scale and deliver.”

“This is an immediate opportunity to unlock growth, accelerate decarbonisation, and bring forward billions in private investment. We urge you to act now.”

Read the letter

-ENDS-

For further information, contact:

Jocelyne Bia, Head of Corporate Communications, PR and Brand Management
e: jocelyne.bia @adbioresources.org; tel: +44 (0)20 3176 0592

Notes to editors:

• The Anaerobic Digestion and Bioresources Association(ADBA) is the trade association for the UK anaerobic digestion (AD) and biogas industry. ADBA’s vision is to see the full potential of the UK AD industry realised so it can help the UK achieve its emissions targets, energy and food security and other policy goals, creating a truly circular economy. adbioresources.org
• The £8bn figure referenced by ADBA reflects the private investment opportunity that could be unlocked across the UK biomethane sector with the right policy signals – notably inclusion in the UK Emissions Trading Scheme (ETS), continuation of support mechanisms, and streamlined planning and permitting.
  This figure is not speculative. It is based on direct intelligence from ADBA members, including developers, investors and operators who have shovel-ready projects or large-scale expansions already scoped and awaiting enabling policy conditions.As a reference point, ADBA estimates that over £1bn of investment can be accounted for by just three major developers, indicating that the full industry has significantly more capacity to deploy capital rapidly.  The figure is also consistent with what would be required to meet the NESO 30TWh biomethane production expectation by the early 2030s. By back-calculating from the capital cost per plant and the investment intensity required per TWh, ADBA has established that achieving 30TWh of biomethane production capacity would demand around £8 billion in total private investment.
• The UK ETS is a cap-and-trade scheme that limits the carbon emissions from traded sectors such as heavy industry, energy generation and domestic aviation.  It allows the trading of unused allowances within these covered sectors.  Moving biomethane over the gas grid to be considered a net zero fuel would mean that fewer allowances would need to be used where biomethane was purchased for industrial or power generation use. This would leave the biomethane buyer with more allowances to be traded, which at the current price would add around £10/KWh to the value of biomethane.
• About the AD industry 
  • There are currently over 750 AD plants operational in the UK
  • The entire industry digests approximately 36 million tonnes of organic wastes each year – organic material that would otherwise emit greenhouse gases including highly potent methane, if left untreated in landfill.
  • An estimated 21TWh of biogas is produced each year by the AD industry – this green gas is either used to generate electricity and heat via a combined heat and power (CHP) unit or upgraded to biomethane and injected directly into the national gas grid.
  • The industry currently delivers savings of 1% off the UK’s greenhouse gas emissions every year.
  • An estimated 4,800 people are currently employed in the AD and biogas industry in the UK.
  • Overall the industry grew by 5 per cent last year as the closure of older, smaller plants was outweighed by big-scale units feeding into the gas grid.
  • Fully deployed, by 2030, the UK AD and biogas industry expected to:
    • create 30,000 direct and 30,000 indirect jobs.
    • save the UK 27 million tonnes of CO2 equivalent = taking 1/3rd of all cars off the road, by 2030.
    • heat 6.8 million UK homes with the 8 billion m3 of biomethane generated

• How AD works
  Anaerobic digestion (AD) is the natural breakdown of organic matter when deprived of oxygen in a container called digester. The process produces biogas, and a residue called digestate – a stable, nutrient-rich substance used as a biofertiliser which restores soil health.