The Policy Landscape of AD

Anaerobic digestion (AD) can play a significant role in delivering the UK’s climate change reduction targets.

Its potential contribution has been overlooked by the government in the past. For example:

The technology rapidly expanded with the introduction of Feed-in Tariffs in 2010, but since then a lack of commitment and support from the government has hampered progress
The Non-Domestic Renewable Heat Incentive (RHI) Scheme was closed to new applicants on 31 March 2021
Further lack of commitment to the role AD could play was also evident in the Net Zero Growth Plan unveiled the same month, which neglected to consider the contribution it could make

However, there are signs that this could be changing. The Green Gas Support Scheme (GGSS), which is designed to increase the amount of renewable gas in the grid, was launched in November 2021 and will provide tariff support for plants producing biomethane via AD which is injected into the gas grid.

Funded by the Green Gas Levy, which is placed on all licenced fossil fuel gas suppliers, tariffs are calculated to compensate plants for the building of new infrastructure to produce biomethane and ongoing operation costs.

The scheme is open to applications for four years and successful applicants will receive tariff support for 15 years.

Initial figures estimate that the GGSS could contribute 8.2 million tons of CO2 equivalent of carbon savings over its lifetime – the equivalent to taking 3.6 million cars off the road for a year.

Unfortunately, the policy has got off to a slow start. The need for applications to go through the tariff guarantee process before beginning construction means that only one new plant has been commissioned in the past 12 months.

However, it’s expected to make a difference in the longer term: 12 plants are currently being constructed, nine of which are completely new, GGSS-funded sites.

The policy landscape is on the upswing, but there still needs to be more of a balanced approach to renewable technologies from policymakers.

AD is a crucial part of the UK energy mix, and it has the potential to make up shortfalls, such as last year when we saw wind and solar down by 25%.

What is stopping growth in the AD sector?

There are still some practical issues constraining growth within the sector. Top of the list is feedstock.

How feedstock supply can increase AD growth

A challenge in getting proposed anaerobic digestion projects off the ground is contracting suitable quantities of feedstock to make the development worthwhile.

While this is an opportunity to provide markets to suppliers, it takes time.

The government has committed to eliminating food waste from landfill by 2030, but the roll-out of separate food waste collections across England and Wales has been hampered by delays.

How investment can increase AD growth

AD is an attractive proposition and, with the end of basic payment scheme payments on the horizon, many farmers are looking for alternatives to make up the shortfall in income.

It’s a bigger investment than other forms of renewable energy such as solar, for instance, but there are numerous benefits, such as digestate, which can be used on the land instead of expensive nitrate fertilisers.

Many AD owners are also finding additional income streams with Carbon Capture, Utilisation and Storage (CCUS) technologies, which service a huge market, from drinks carbonation to use in glasshouses to boost plant yields, and large-scale refrigeration.

Those without the capital to invest in AD could consider an arrangement with a developer to host a plant, supply feedstock and manage the digestate disposal. This could generate income without the need for a large upfront investment.

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