Decarbonisation and green finance: HMT review the opportunities

Last week, ADBA responded to the Treasury Committee’s Parliamentary Inquiry, “Decarbonisation and green finance”, emphasising the need for the government to better allocate funds according to the sustainability of all companies’ operations. For the government to deliver net zero by 2050, deep-rooted and systematic change is necessary. Both private and public sectors must start divesting from systems which depend on carbon-intensive technologies and re-investing in sustainable ones – developing the green economy – yet well-designed policy is required to drive this transition. There is not time to allow fossil industries to transition at their own convenience.

Here lies one of AD’s greatest strengths: biomethane is already compatible with the nation’s extensive gas infrastructure, originally design around fossil-based operations. Growing the green economy by, in part, helping the AD industry reach its full potential represents a relatively easy and non-disruptive option; “no-regrets” as stated by the Committee on Climate Change (CCC). It is a ready-to-use technology capable of decarbonising some of the UK’s trickiest sectors immediately. At its full potential, where all available organic wastes are anaerobically digested, the industry will offer numerous socio-economic and environmental benefits – the creation of green jobs, diversification of rural incomes, improved food and energy security, restoration of soils, to name a few – all while cutting annual UK emissions by 6%.

ADBA’s response detailed a few key policy suggestions to support AD’s growth:

• Following the Coronavirus outbreak it is even more important that the policy gap between the closure of the Renewable Heat Incentive (RHI) to new applications in March 2021 and the opening of the Green Gas support scheme to new applications in Autumn 2022 is provided for. This lack of support for well over a year will create an industry wide hiatus that will hit supply chain businesses, already struggling due to the pandemic, very hard as the sector will essentially be halted in the UK for this time. This lack of provision will also mean that at the landmark moment when the UK hosts COP26 there will be no policy in place supporting new biomethane projects. With government already recognising the important role green gas has to play in decarbonising heat and transport, this is not a position the country should be in and it is vital that short-term support is put in place to bridge this gap. This will support important UK supply chain businesses that are vital for the continued health and growth of the biomethane industry and the green economy.
• The government has already announced its intention to support the biomethane for heat sector with the Green Gas Support Scheme. While this is a very welcome scheme to deliver the full decarbonisation potential of the sector, treating all reasonably collectible organic wastes through AD, it needs to be far more ambitious. As funded, the scheme will not even meet the government’s objective of tripling the biomethane in the grid, let alone the necessary growth to achieve full potential by 2030. The tariff on offer must be higher to stimulate more investment into the sector, rather than just supporting projects that are already planned to go ahead. In addition, a similar scheme should be introduced to support the generation of biomethane for transport, providing the investor confidence that is not given in the market-driven RTFO scheme. This funding will guarantee growth in green infrastructure for low-carbon waste management of organic wastes, nutrient recycling to return to our soils for food production, and generation of carbon neutral green gas, or even negative when the captured CO2 is stored or utilised.

For more information about the consultation response, please contact Rebecca Thompson at Rebecca.thompson@adbioresources.org or Nick Primmer at nick.primmer@adbioresources.org