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Along with waste review, the AD action plan missed the mark

Tiffany Holland seeks industry views on the Anaerobic Digestion Strategy and Action Plan document

Alongside the eagerly anticipated publication of the waste review last week came the Anaerobic Digestion Strategy and Action Plan. But the industry’s disappointment at the AD action plan was comparable to the review, calling it a “missed opportunity”.

“I don’t think the Government is pushing the action plan as strongly as it could in order to see real benefits,” said the Anaerobic Digestion and Biogas Association (ADBA) policy and information advisor Matt Hindle. “There does not seem to be a clear strategy in terms of how to use incentives such as feed-in tariffs (FITs) and the renewable obligation to get the most out of AD.

“It seems as though the Gov- ernment wants to let the market decide what to do with biogas, but it really needs a strategy. It has been proven that one of the greatest carbon savings that can be made is by using biomethane in vehicles, particularly HGVs. A lot of work would need to be done in terms of creating refuelling infrastructure, but this was a chance to lay down a strategy for it - and yet it is now a missed opportunity,” he adds.

In the report, the Government committed itself to working towards research to establish the barriers to and opportunities for biomethane as a transport fuel in the road haulage sector. But a practical plan was not offered.

Investors in AD also seemed to be frustrated. The Department for Energy and Climate Change (DECC) had announced a small increase in the value of FITs for ‘on-farm’ facilities - those AD facilities producing up to 500KW - just a few days previously.

“AD projects fail because of a lack of continuity in feedstock and the price of the contract. On-farm projects may well use animals slurries or crops, but for food waste AD facilities, there is an exposure to commodities risk”

But environmental investor Triodos Bank relationship manager John Stephens explained: “From our experience, AD projects fail because of a lack of continuity in feedstock and the price of the contract. On-farm projects may well use animals slurries or crops but for food waste AD facilities, there is an exposure to commodities risk.

“The Government had the chance to promote long-term food waste contracts to enable 10- or 15-year agreements at a fixed rate and a fixed tonnage. But these reports don’t do that which is a big disappointment. The documents just provide guidance to local authorities.”

Indeed, before publication of the waste review, there were media reports that a fund could be set aside for the Government to encourage councils to provide separate food waste collections. But this did not emerge from the review; it strongly advised councils to provide weekly collections of ‘smelly’ waste but no targets or regulation was imposed to help this along.

Waste management company Biffa recently opened its £25m AD facility in Cannock, Staffordshire. It has a 120,000-tonne capacity and is the largest in the UK.

Strategic development director Martin Hogan said: “One can only welcome any move by DECC to increase FITs for on-farm facilities. However understandable it may be, given the dearth of knowledge in the area, there is a deliberate side-step away from the contentious sustainability argument between energy or food from crops. The responsibility for making the call about what is more sustainable has effectively been devolved to local planning authorities until Defra decides otherwise.

“Given that not every local authority can afford to employ experts in this field, this will doubtless create regulatory uncertainty. I feel it will rock the confidence of potential investors in AD, and make it harder on local authorities to grant permissions in a short time frame.”

According to Stephens, the announcement of a £10m loan fund to boost investment in new AD projects, which was also announced, is still not a strong enough driver to create confidence to invest.

He said: “While it is welcomed that WRAP is to offer £10m of loans, the amount is a drop in the ocean for the industry when an AD plant costs £5m to £15m. It simply isn’t enough. It is also a loan rather than a grant, so it will only exacerbate the funding issue for AD plants and add debt.
“The cornerstone of funding for this technology seems to be the Green Investment Bank. But we know so little about it, in terms of what it will offer.”

Hogan adds: “Consider the £10m in terms of the recent Biffa investment in Cannock - it doesn’t even pay for half of it. Realistically, this will deliver only a small amount of extra capacity - perhaps 50,000 tonnes a year in total?”

Picture: Chance missed to promote long-term food waste contracts that support AD

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