Gas supplier tax for green gas production plants proposed: A new levy has been proposed by the Government to be placed on gas suppliers across the UK to fund the construction of biomethane or ‘green gas’ production plants.
Environmentally-friendly organic waste products are used to produce the green gas which will help reduce emissions from the gas grid, by using more of this gas made from renewable sources to power boilers in homes or in industrial processes in factories will also support the UK’s 2050 net zero goal.
Initially announced in the March 2020 Budget, the green gas levy will apply to gas suppliers in England, Scotland and Wales and is estimated will prevent as much as 21.6 million tonnes of carbon emissions from entering the atmosphere which is the equivalent of planting 71 million trees.
Renewable biomethane injection into the gas grid will be supported through the new Green Gas Support Scheme, proposals of which were set out in the April 2020 consultation.
Estimated to peak at around £6.90 on an annual gas bill, the government expects the effect on consumer bills to be “relatively minor”.
With plans to implement a robust control framework that includes an annual budget cap to ensure impacts on bills do not rise unexpectedly, it is committing to ensure the impact of bills is “as low as possible”.
Expected to be launched in autumn 2021, are both the Green Gas Levy and the Green Gas Support Scheme, with the first levy collection intended for April 2022.
Kwasi Kwarteng, Energy Minister said: “Reaching net zero means reducing emissions across our entire energy system, including the way we heat our homes and businesses.
“This new funding will support an ambitious scheme to decarbonise the gas grid that will prevent millions of tonnes of carbon dioxide from entering the atmosphere – another step towards reaching net zero by 2050 at minimal cost to UK billpayers.”
Views are being sought by the Government on the policy options for the new levy until 2nd November 2020.
Chief Executive of the Anaerobic Digestion and Bioresources Association (ADBA), Charlotte Morton, added: “Fully deployed, the biomethane industry could deliver a 6% reduction in the UK’s greenhouse gas emissions by 2030 and provide heating for 6.4 million homes, creating tens of thousands of jobs and boosting energy and food production security. As biomethane is already compatible with our current gas grid, it is also a particularly cost-effective way to decarbonise the UK’s heating infrastructure.
“We welcome this consultation and the commitment shown by BEIS to integrate biomethane into the government’s net zero strategy. With the right policy support, there is much more this industry could contribute to the green economy and to achieving the UK’s 5th Carbon Budget, over the next decade, but this represents a significant step in the right direction.”
Gas supplier tax for green gas production plants proposed