What makes a supportive policy environment for AD?

Increased uptake of anaerobic digestion (AD) technology could significantly contribute towards achieving the target of net zero emissions by 2050. Here, we explore the case for ensuring government policy is based on an understanding of the benefits from both a waste management and renewable energy perspective, while supporting investor confidence.

Mark Sommerfeld, policy manager at the Association of Renewable Energy and Clean Technology (REA) and Chris Winward, chief commercial officer at Privilege Finance, share their views on what a truly supportive policy for AD looks like.

A joined-up approach to energy and waste

Both Chris and Mark agree that the UK government must ensure that policy for waste management fully integrates with the policy for renewable energy production.

“The planned introduction of separate food waste collections in all areas of the UK will only achieve the intended benefits to the environment and society if there’s a clear mandate for how waste is to be processed,” says Chris.

He recommends a directive that all organic waste must go to a facility where the disposal process is carbon neutral, eliminating the production of any outputs that are harmful to the environment and ideally creating a useful by-product.

“Currently, the inconsistencies in how local councils handle food waste are a barrier to driving uptake of sustainable waste solutions like AD. A centralised mandate will provide reassurance that there is sufficient demand for carbon neutral waste processing, creating an attractive market for the development of new facilities.

“Going a step beyond this, we need a policy which supports a carbon negative approach to organic waste management. For example, food waste could be collected and transported a short distance to an AD plant which also uses carbon capture and storage technology. The nutrient-rich digestate produced can be spread on agricultural land, displacing the need for inorganic fertilisers, the production of which emits significant levels of greenhouse gases.”

Mark adds that it’s imperative that there are systems in place for collecting all types of waste separately, to ensure it’s dealt with in the most appropriate way.

“Local authorities have autonomy over the types of facilities that are developed, as different regions have different waste profiles, depending on whether the population is mostly urban or rural and the types of agriculture that are predominant.

“But clear guidance, led by the implementation of the Government’s Resources and Waste Strategy, which implements the waste hierarchy, should be helping local authorities to create an appropriate strategy for their areas.”

A long-term stable policy

Changes in UK energy policy over recent years have been a challenge to the AD industry. Frequent amendments to the non-domestic renewable heat incentive (RHI) scheme have created an inconsistent policy environment for investors. With the end of the scheme fast approaching, details are still being clarified about its replacement, the Green Gas Support Scheme.

“The stop-start approach to RHI has meant that AD plant developers have been consistently up against deadlines to be able to access the tariff guarantee,” says Chris.

“We’d ideally like to see a replacement scheme which lasts for at least ten years, as removing the time pressure around new project development will enable developers to consider and adopt innovative technologies, while increasing investor confidence that projects will be commercially viable long-term.”

Carbon pricing

Another option for creating a more supportive policy environment for AD and other renewables is to increase the pressure on those emitting carbon emissions from fossil fuels.

Mark explains that effective carbon pricing across the economy could make renewable systems, like AD, more competitive compared to fossil fuel alternatives.

“The EU Emission Trading Scheme (EU ETS), boosted by the UK Carbon Price Support, currently applies to large scale industrial power generators and users. This makes it more expensive to use fossil fuels to generate power, helping renewable generation to compete. The government have already indicated plans to create a UK Emission Trading scheme once the UK leaves the EU ETS in January 2021.

“However there is potential to expand carbon pricing further to help level the playing field, in other sectors such as transport and heat. This could help make biomethane produced from waste a more attractive and cost-effective option than its fossil fuel alternatives.”

Chris agrees that some form of mechanism to apply pressure on fossil fuel derived emissions could create opportunities for the greener alternatives like AD.

“I see potential in a system where carbon impact is assessed and companies are taxed based on a scoring system. This could include trading of carbon credits, so companies that generate energy from renewable sources can receive income by selling credits to others.

“Ultimately, there is a need for a policy environment which will drive the UK towards carbon reduction. Putting a higher price tag on carbon could be the way to do this long-term, providing the legislation is there to support the alternatives like AD in becoming commercially viable on their own and help accelerate the journey to net zero,” adds Chris.

 

Originally published by ENDS Waste and Bioenergy

Privilege Press Release