Review gives Government opportunity to save on-farm AD and unlock biogas benefits for rural economy

Energy Minister Greg Barker has confirmed that DECC will launch a review of the Feed-in Tariff (FIT) for small scale anaerobic digestion (AD) in January. The AD industry has been calling for a review because the policy as currently designed will trigger a tariff reduction for small scale AD in April, even though hardly any plants have actually been built at this scale. This reduction, if left unchecked, would make small scale AD, including on farms, economically unviable.

The REA and ADBA have been working together closely to make the case to the Government, along with great efforts from the CLA, NFU, NNFCC, RASE and several of our member companies. Industry has worked hard to develop solutions to this problem for small scale AD which avoid undermining investment at other scales.

REA Chief Executive Dr Nina Skorupska said:

"Industry has been united in calling on Greg Barker to commit to a review of the AD FIT before Christmas, so we warmly welcome this letter from the Minister. It is very encouraging ahead of the Autumn Statement to see Ministers and officials really listening and responding to industry concerns.

"The simple fact is that if this situation isn't resolved, the on-farm AD industry will grind to a halt. The timely announcement of the review gives Government a good chance of fixing the situation quickly enough to preserve the majority of existing projects and keep the door open for further growth."

Farmers have been increasingly looking to AD to generate an income from farm wastes and residues, by converting them into renewable biogas and biofertiliser. However, support for the sector is set to reduce to uneconomical levels in April even though hardly any on-farm AD plants have actually been built. The review is intended to ensure that the policy works for AD at all scales, including small scale and on farms. A more detailed one page briefing on the issue is available on the REA website [1].

Dr Nina Skorupska added:

"On-farm AD has so many benefits. It strengthens the rural economy with new jobs and access to new markets in green energy and biofertiliser. The plants have a high content of UK-engineered equipment, with innovation rapidly increasing efficiency and potential applications across electricity, heating and transport. And of course, AD results in significant, cost-effective greenhouse gas savings from both farming and energy generation, helping preserve a safe environment for the future."

The REA looks forward to seeing details of the review and will continue to work with our members, ADBA and other stakeholders to ensure it unlocks the benefits of biogas at all scales.