The race to decarbonise our energy demands is becoming increasingly competitive. As companies build their decarbonisation strategies, they become increasingly vaguer as they try to reduce their emissions to Net Zero. Opening the conversation to discuss the myriads of solutions available can address this challenge today. Biomethane and renewable gas being one of those solutions.
Reduce. Replace. Offset. A three-step process that forms the foundation of most energy decarbonisation strategies. But when we analyse our decarbonisation strategies, we only address the “reduce” and some of the “replace”. Following the guidance on decarbonisation from the Oxford Principles, we should look at all three-steps today.
Replacing fossil-based methane (natural gas) demand is frequently a roadblock in the path to Net Zero. The UK economy’s reliance on gas makes its removal a complex undertaking. This is for a plethora of reasons including the capital costs or inability to make the infrastructure changes to electrify because of the layout of or age of facilities or premises, the effects of using electrified solutions on the final product, requiring further product development, or the inefficiency/lack of suitability of alternative solutions.
Biomethane can solve these challenges and takes businesses to Net Zero. Using biomethane is a versatile solution for any gas user connected to the gas grid. A Gas Purchase Agreement (GPA), like a PPA, enables the shipment of biomethane to any gas user connected to the gas grid, decarbonising their Scope 1 emissions. By mass balancing the biomethane injected and the gas used, it is a simple mechanism to attribute biomethane use to an off taker.
For biomethane production that includes carbon capture and storage, this is a source of net-negative gas, and the GPA with mass balancing is the instrument to attribute those carbon savings to an off taker.
Given the significant value of this gas as a decarbonisation tool, why are we not using more of it?
The answer is with the acceptance of GPAs, both with regulators and in the wider market. This risk can be too high for some to consider this energy and decarbonisation solution. This problem needs to be addressed by the UK government, who can mitigate the risk by acknowledging their acceptance of GPAs, as is the case already in the European Union. Ideally, this would be on the provisions that:
- The producer and end user are connected by a continuous pipeline that can trace the movement of the gas
- We bundle the commodity, the gas, and the renewable credentials—green gas certificates and proof of sustainability (POS)—together for transparency and verification.
- The biomethane production is free from government subsidy
This would remove the risk of greenwashing and put the UK economy at the global forefront of decarbonisation.
The government will address the acceptance of GPA[SA1] soon, but businesses need to start the conversation now if they want to get a GPA in place before 2030. This is because once the government makes its intentions clear, a floodgate of interest in biomethane will occur and only those who make the move first will get access to a supply.
For those with Emissions Trading Scheme (ETS) obligations, the allowance trajectory and the scope of businesses with an obligation is set to change as we approach 2050 in line with the UK Government’s legal commitment to Net Zero. This will result in fewer allowances available, plus the removal of free allowances in 2026, and increasing demand from newly obligated industries. Thus, the price of allowances will increase and can expose businesses increased financial risk.
Coupling this with increasing market instability from geopolitical conflict, key political changes, and the UK’s increasing dependence on imported gas and elimination of coal will increase the cost of continuing operations as usual.
Therefore, the first movers, with the ambition to future proof their business, will have the competitive advantage.
This article appeared in the April 2025 issue of Energy Manager magazine. Subscribe here.