Phil Gerrard, CEO, Privilege Finance
Anaerobic digestion (AD) has the potential to reduce the UK’s emissions by 5%, create 30,000 jobs and generate green energy from approximately 90 million tonnes of slurry and manure that currently contributes to rising greenhouse gas emissions.
In fact, according to Charlotte Morton, chief executive of the AD & Biogas Association when speaking at ADBA’s national conference this week, AD represents a £1 trillion global market opportunity.
But, when there are such clear economic benefits for the UK in AD, some may question why growth has slowed over the past 18 months.
As a funding provider who has delivered £300m worth of investment into the UK biogas industry, the reason is clear. A lack of long-term commitment from government has led to uncertainty in the sector, and investment thrives on certainty to appropriately measure risk and returns.
Although the recently published government Bioeconomy Report aims for the UK to become a global leader in bio-based solutions, it lacked clarity over funding and new policies to support these aims. To an outside investor looking in, the AD industry brings with it too many unknowns.
However, on the contrary, those in attendance at the conference heard first hand that UK AD has been one of the fastest growing renewable industries, and there are exciting developments in the pipeline.
New technologies that operate as additions to existing biogas plants are being brought to the fore, with the aim of making existing plants more efficient, and profitable. In addition, according to Jonathan Scurlock of the NFU, there is also a major rural economic opportunity for a deregulated gas network, which could provide a much-needed boost to community energy.
On a more industrial scale, the National Infrastructure Commission reported that 75% of the public who don’t have them already would support mandatory food waste collections, which could generate a need for more food waste AD capacity, either through existing units or new projects.
AD also brings much more than just renewable energy, such as environmental credentials through the reduction of greenhouse gases and enhanced waste management. Not forgetting the opportunity that lies within making more from all AD bi-products, including the nutrient-rich digestate fertiliser and CO2 produced from biogas upgrading.
All these points indicate a bright and positive future for the sector, however, to continue to attract investment we need to get better at communicating these added-value benefits as an industry.