Budget leaves biomethane behind, says the UK trade association 

Budget leaves biomethane behind, says the UK trade association 

The Anaerobic Digestion and Bioresources Association (ADBA) welcomes the government’s commitment to net zero by 2050 and its focus on cutting household bills as families face another winter of high energy costs.

Moving gas standing charges onto the unit rate is a fairer way to fund the Green Gas Levy, putting more of the cost on those who use the most fossil gas. We also welcome the decision to scrap the Gas Shipper Obligation. As consulted on, that levy would have applied to biomethane, pushing up the cost of one low carbon gas to pay for another.

But the Budget leaves biomethane behind. The government has found £27 million from the Exchequer for the first Hydrogen Allocation Round, while the Green Gas Support Scheme stays frozen, potentially until the 2027 spending review. Yet there is nothing that hydrogen can do that biomethane cannot do – and biomethane is both proven and better value for money. The GGSS funding cap has been frozen for more than four months already, and more than a dozen shovel-ready plants are waiting for the go-ahead to build. If the freeze holds, investment will stall and projects will be cancelled.

The Budget allows new policy costs where they are essential for security of supply. Home-grown biomethane meets that test. It displaces imported LNG and protects households from the volatile international gas prices the Chancellor warned about today. ADBA urges ministers to lift the GGSS cap now, using that exemption, levy funds already collected but not spent, or direct Exchequer support, as hydrogen has received.

Chris Huhne, Chair of ADBA, said:

“The Chancellor is right that Britain must break its exposure to volatile global gas prices, but missed a trick on home-grown green gas made on British farms and in British towns. Today the government found money from general taxation for hydrogen, yet left biomethane, which is a proven technology heating homes right now, waiting on a single decision. 

More than a dozen plants are ready to build with far better value for money than hydrogen. Lift the cap now and they will be producing gas for British homes, not leaving us reliant on imported LNG.”

-ENDS-

For further information, contact:

Cameron Ball, External Affairs Lead, ADBA
e: cameron.ball@adbioresources.org; tel: +44 7964 663710

Notes to editors

About ADBA

The Anaerobic Digestion and Bioresources Association (ADBA) is the industry association for the UK anaerobic digestion (AD) and biogas industry. ADBA’s vision is to see the full potential of the UK green gas industry realised so it can help the UK achieve its emissions targets and other policy goals, creating a truly circular economy. www.adbioresources.org

About the AD industry 

• There are currently over 750 AD plants operational across the UK
• The entire industry digests approximately 36 million tonnes of organic material 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 2050, the UK AD and biogas industry is expected to:
  • produce over 100TWh of biomethane
  • provide between 20% and 50% of UK gas demand
  • create 60,000 jobs (30,000 direct and 30,000 indirect).
  • save the UK 27 million tonnes of CO2 equivalent – equivalent to taking 1/3rd of all cars off the road
  • 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 in the absence of oxygen in a container called a digester. The process extracts the energy this material contains in the form of biogas leaving the remaining organic matter called digestate – a stable, nutrient-rich substance used as a biofertiliser which restores soil health. Organic wastes typically treated through AD include food waste, animal manures and slurries, other agri-wastes, food & drink processing wastes, sewage sludge.