Government launches Green Gas Levy consultation


Today government has launched a consultation on the implementation and design of the Green Gas Levy.

The Green Gas Levy will be applied to gas suppliers in Scotland, Wales and England, and will be used to increase green gas production to help decarbonise the gas grid.

Gas suppliers will pay the cost of the levy to Ofgem, who will use the funds to pay biomethane producers for the green gas they inject into the gas grid.

With the potential to prevent as much as 21.6 million tonnes of CO2 entering the atmosphere, the Green Gas Levy is estimated to result in only minimal costs for consumers, starting at just 11 pence per month, yet will see climate gains equivalent to planting over 71 million trees.

The Green Gas Levy was first announced in the 2020 Budget earlier this year, and today’s announcement launches a consultation which invites views on how the final initiative will be designed and implemented.

The levy will play a key role in supporting the government’s UK-wide green economic recovery by funding the Green Gas Support Scheme, which will help bring investment into rural areas of Great Britain and support jobs in this sector.

More biomethane plants will be built as a result of the funding from the levy, leading to more biomethane being injected into the grid.

This will also benefit society by boosting our carbon savings, and making an important contribution to the UK’s efforts to mitigate the impacts of climate change.

The launch of the consultation has been welcomed in the gas industry.

Charlotte Morton, Chief Executive of the Anaerobic Digestion and Bioresources Association, commented: “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.”

Today’s consultation is the latest measure designed to fight climate change and help the UK reach its net zero target.

Last month the government announced the £2 billion Green Homes Grant, which will fund up to two thirds of the cost of upgrading the energy performance of homes – impacting more than 600,000 homes in England.

The Green Gas Levy consultation is open now, and closes at 11.45pm on 2 November 2020.

More information on how to take part in the consultation is available here