This presentation prepared by Lucy Hopwood, NNFCC's Lead Consultant for Bioenergy & Anaerobic Digestion provides an introduction to the Anaerobic Digestion Market in the UK

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The Anaerobic Digestion
Market in the UK
Lucy Hopwood
Business Development Director,
Lead Consultant for Bioenergy & Anaerobic Digestion

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A specialist business consultancy with over 19
years of bioeconomy experience
We view bio-based technologies as key components of the low carbon
economy delivering economic, social and environmental benefits.

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biogas
upgrading
unit
boiler or heat
& power
(CHP)
feedstock
pretreatment &
anaerobic digester
biogas biomethane
CO2
digestate
gas grid
other gas
distribution
(virtual
pipeline)
exhaust
CO2 for
commercial use
feedstock
external
heat &
power
Transport Fuels
products & co-products
agricultural residues
processing residues
waste
AD Process Overview
heat power

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UK AD Market analysis
Source: NNFCC (2022) AD deployment in the UK, annual report (https://www.nnfcc.co.uk/publications/report-anaerobic-digestion-deployment-in-the-uk)
CHP Biomethane injection
Biogas
production
capacity
2.8GW
Number of
plants
663
Energy
contribution
1.6GWeeq

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AD Market, by feedstock type
Data taken from NNFCC’s latest AD Deployment in the UK report, published April 2022
Number of plants Installed capacity

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Feedstock Use
Feedstock capacity of operational AD facilities in the UK = 17 million tonnes per annum
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Manure or Slurry Crops Food Waste Crop Waste Other

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Feedstock Use vs. Availability
Livestock waste
Agricultural residues
Food waste
Processing residues

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AD Development Pipeline
There are currently 244 projects in the development pipeline in the UK, having
secured planning consent or applied for consent:
• 168 are farm-fed (cumulative installed capacity of 79.2 MWe);
• 76 waste-fed (cumulative installed capacity of 94.3 MWe).
** Most CHP facilities not expected to go ahead without support **
0
10
20
30
40
50
60
70
80
90
100
Plant Numbers
Small-scale Medium-scale
Large-scale BtG

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UK AD Deployment Report
Extensive market data and analysis on current and future
development trends for anaerobic digestion and composting
Detailed sector commentary and comprehensive overview of policy
and incentives affecting the anaerobic digestion development
landscape.
Comprehensive excel database of more than 1000 planned and
operational Anaerobic Digestion facilities in the UK.
Includes site name and location; feedstock type, source and volumes;
energy output type and capacity; and development status.
Current data on UK biomethane refueling station network,
including operational and planned sites.
See more information at: https://www.nnfcc.co.uk/publications/report-
anaerobic-digestion-deployment-in-the-uk-23

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UK Policy Landscape
Supporting policies have been in place for over a decade, but the focus has shifted, and the
future of legacy schemes are currently being considered.

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The Role of AD in the UK’s Net Zero Strategy
AD has been supported by a range of incentives over the years resulting in increased deployment
CHP plants currently widely outnumber biomethane plants
However, new incentives favour biomethane over biogas combustion, with a view of
promoting a more flexible product that can be injected into the national grid:
• Better aligned with the current policy intent; decarbonisation of the heat and transport
sectors (via grid), energy security and Net Zero
• Greater efficiencies can be achieved, especially where CHPs are unable to use heat
• Markets may be more attractive and/or more flexible, giving optionality around supply for
heat or transport fuel use
When converting or adding to capacity:
• CHPs are ageing, and the cost of replacement can be significant
• Deliver more without facing current market constraints; feedstock, land, funding, planning,
permitting, etc

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Overarching Policies & Regulations
EU Directives and Regulations underpin many of the rules and support mechanisms in the UK market
The most important are:
• Renewable Energy Directive (RED/REDII)
• REDII entered into force in 2018 as an update to the original RED;
• Underpins many of the UK’s AD financial support mechanisms;
• Outlines feedstock categories, sustainability criteria & GHG emissions criteria.
• Waste Framework Directive (WFD)
• Underpins rules for using and generating wastes in an AD process
• Sets out the Waste Hierarchy
• Animal By-Product Regulations (ABPR)
• Outlines rules for processing wastes that may have been in contact with animal by-products.
Despite leaving the EU, the UK will uphold its commitments to these overarching Directives/Regulations.

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UK Policies & Regulations
A number of support mechanisms have been developed in the UK to incentivise the uptake of renewable energy technologies like AD.
Example policies related to the AD sector include:
• Renewables Obligation – large-scale electricity generation (CLOSED)
• Feed In Tariff Scheme – small-scale electricity generation (CLOSED)
• Smart Export Guarantee – small-scale electricity generation (OPEN)
• Contracts for Difference – all-scale electricity generation (OPEN)
• Renewable Heat Incentive – all-scale heat generation/biomethane grid injection (CLOSED)
• Green Gas Support Scheme - all-scale biomethane grid injection (OPEN)
• Renewable Transport Fuel Obligation – all-scale biofuel production (OPEN)
The goal of these mechanisms is to help achieve Net Zero by 2050, as set out under the 2019 amendment to the UK’s Climate Change Act.
Although some of these schemes are now closed, many AD plants currently operational in the UK may still be supported by one, or a
combination, of these mechanisms.

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Green Gas Support Scheme (GGSS)
(OPEN) – all-scale biomethane grid injection
Following the closure of the RHI to new applications, the UK Government introduced the GGSS in Autumn 2021.
The GGSS supports biomethane injected into the grid that is produced via new anaerobic digestion facilities.
The GGSS operates in a similar way to the NDRHI for biomethane injection facilities, and it is currently set to run until Autumn 2025.
Sustainability criteria and feedstock restrictions apply
Tariffs are fixed from the point of application for 15 years.
Tariff rates are:
• Tier 1: 5.51 p/kWh, for the first 60,000MWh of biomethane injected to the grid,
• Tier 2: 3.53 p/kWh, for the next 40,000MWh of biomethane,
• Tier 3: 1.56 p/kWh, for any additional gas injected, above 100,000MWh.
An annual tariff review will take place, using industry cost/revenue data to set tariff levels from 01 October each year.
A mid-scheme review is imminent, considering the eligibility criteria, feedstock limits, closure date, etc.

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Renewable Transport Fuel Obligation (RTFO)
(OPEN) – Biofuel production
The RTFO is the UK Government’s principal policy for reducing greenhouse gas emissions from fuel used in road vehicles
In October 2007, Parliament approved the RTFO, mandating all suppliers of road transport fuels at volumes of 450,000 litres per year or
above to incorporate a proportion of biofuel in petrol or diesel.
RTFO is a certificate-based mechanism under which obligated suppliers can either:
a) Supply biofuel and earn certificates which can then be traded with other fuel suppliers and users;
• 1.9 certificates per kg biomethane
• 3.8 certificates per kg biomethane when waste-derived
b) Buy certificates from others who have supplied the fuel, to offset against their supply if they fail to meet their obligation; or
c) Pay the “buy-out” price, currently 50 pence/litre, for failing to meet their obligation.
The biomethane producer sells fuel to a fuel supplier; the fuel supplier receives and trades the RTFCs and passes some of the value
back down to the producer, split typically based on level of investment made by each party.
Similar to other UK renewable energy schemes, fuels supplied under the RTFO must meet mandatory sustainability criteria.

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AD Market - Summary
Opportunities Challenges
Strong market with significant growth potential
Additional food waste expected to come to market
Livestock waste remains largely untapped
Carbon capture and use or storage
Performance improvements
Higher value markets for biogas
Narrow scope of current policy support
Short policy cycle and lack of long-term visibility
Feedstock availability and stability
Supply chain issues
Regulatory delays
Price volatility
The AD industry remains active and vibrant, but future development will be heavily
influenced by feedstock availability and accessibility.

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A specialist strategic business consultancy with
over 19 years of bioeconomy experience
Website: www.nnfcc.co.uk
Email: l.hopwood@nnfcc.co.uk
Thank you