The government has opened up a consultation on a new Green Gas Levy, which will be used to help the UK to reach its 2050 net zero target.
The plans for the new scheme were announced in the budget earlier this year, and according to BEIS will be applied to gas supplies in order to fund future green gas projects and help de-carbonise the grid.
Green gas, often referred to as biomethane, is produced via organic waste through a process called anaerobic digestion. Currently, green gas makes up less than 0.5% of the gas transmission network with the government having been reluctant to extend subsidy to the gas sector in the same way it has done for renewable electricity generation.
However, the new levy will be used to fund the Government’s Green Gas Support Scheme, which will be used to finance more jobs in the sector and is aimed to boost the number of biomethane plants operating in the UK.
According to Charlotte Morton of the Anaerobic Digestion and Bioresources Association (ABDA): “Fully deployed, the biomethane industry could deliver a 6% reduction in the UK’s greenhouse gas emissions by 2030.”
It would appear that additional costs to the consumer will begin at very low levels given that the costs will be spread over a very large demand-base. However, any upshift in green gas production could see a reduction in the cost of Renewable Gas Guarantees of Origin (RGGOs) which would make green gas supply contracts more competitively priced.
The consultation on the scheme is ongoing and invites industry participants to submit their views on how the scheme should be rolled-out.