UK govt departments 'to clarify' crediting rules for biomethane

4 May 2018 |

UK biomethane producers may soon get clarity from the UK government on whether they will have flexibility for projects to pursue credits from the Renewable Fuels Transport Obligation instead of just claiming subsidies under the Renewable Heating Initiative.

Industry sources said that the Department for Business, Energy and Industrial Strategy (BEIS), which administers subsidies paid to renewable heat projects, and the Department of Transport (Dft), which co-ordinates credits paid to consumers and suppliers of renewables fuels, is expected in mid-May to meet with industry.

“The meeting is expected to clarify how biomethane producers can claim financial rewards through both schemes,” said an industry source.

The source added that biomethane producers want the flexibility to claim for subsidies for some of their gas that is used for renewable heating, and then for other production at the same site to be credited through the RTFO for gas used in transport.

“Contrary to some misconceptions, companies aren’t seeking credits for the same production, there is no double dipping going on here,” the source said.

At present, producers of biomethane in the UK say they haven’t so far got the necessary certainty to claim for both the RHI and RTFO income streams.

If they do, it would increase the volume of RTFCs issued to satisfy rising obligations under the RTFO.

Paris-based Air Liquide, one of the biggest developers of biomethane projects in the UK, is one of the companies that is pushing for greater clarity from government departments.

David Hurren, CEO of Air Liquide’s UK biomethane business, told a biomethane conference in Birmingham this week that producers need to be “commercially free not to claim RHI.”

“We are pushing for this with government departments. That conversation has evolved but it needs to reach a conclusion quite urgently,” Hurren told delegates.

The Air Liquide executive said that greater clarity was needed from government because at present, “RTFCs aren’t bankable.”

At present he said that no renewable gas is being produced in UK that can be used in transport, and that RTFCs had so far only been awarded to companies that imported biomethane from continental Europe.

Industry says that BEIS has tended to prioritise RHI as the end use for biomethane and that its ‘tiering’ rules have discouraged large biomethane plants that would be able to supply both the heating and transport sectors.

By way of contrast, the DfT is keen that biomethane can grow its share in the UK’s renewable fuels market and earlier this month admitted biogas from biomethane into the RTFO for the first time.  

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