Joined up: why the biomethane industry is finally speaking with one voice

Future Energy Networks chief executive James Earl and Green Gas Task Force director Charles McAllister tell Bioenergy Insight why bringing gas networks and biomethane producers under one strategic umbrella is finally shifting the dial with government.

For years, the biomethane sector struggled to make itself heard in Whitehall. Good evidence existed, compelling economics existed, willing investors existed, but the message reaching government was fragmented, coming from upstream producers, gas networks and trade bodies in separate voices, often on separate days. Now that is changing.

At the centre of that change sits an alliance between Future Energy Networks (FEN), the membership organisation for the UK's gas networks, and the Green Gas Task Force, a newer campaign body established at the end of 2024 to bring generators, shippers, traders and networks under a single strategic umbrella. FEN, whose members include National Gas, the four UK gas distribution networks and five associate members in Northern Ireland, was itself one of the main instigators of the task force, recognising early that a more joined-up approach with the producer community was needed. Together, the two organisations are making a coordinated case for biomethane that neither could make alone.

‘The key point here is that all parties are moving in the same direction,’ says James Earl, chief executive of FEN. ‘I don't think that's been the same in the past. In years gone by, networks probably saw connecting biomethane as a bit of a hassle and a risk. They don't see it that way anymore. They see it as a significant strategic opportunity to demonstrate that they are greening their gas.’

Charles McAllister, director of the Green Gas Task Force, defines his organisation in deliberately temporary terms. ‘I describe it as an industry anabolic steroid: it's not designed for long-term use. It has very clear terms of reference and very clear workstreams.’

What makes the task force structurally different from most industry bodies, McAllister argues, is its breadth. Most campaign groups represent either the upstream, the midstream, or the downstream. The task force combines upstream production and midstream distribution under one roof, and has since extended further by establishing an end users’ council drawing in major downstream consumers. ‘It shouldn't be seen as just biomethane producers arguing to produce more,’ McAllister says. ‘What we're doing is combining the efforts of the biomethane industry and the gas networks to push forward biomethane together.’

The remit is simple: ‘Increase the profile, improve the policy. That is it. That is what we do.’

Writing to Miliband

In March, that joint effort took the form of a letter to the current secretary of state for energy security and net zero, Ed Miliband, co-signed by Earl, McAllister and representatives from the Renewable Energy Association, the Institute of Gas Engineers and Managers and GMB. The letter set out two specific asks.

The first was a long-term policy framework with an ambitious biomethane production target. The evidence base the sector has assembled, Earl says, supports a target of at least 120 terawatt hours of sustainable biomethane by 2050. ‘We need that soon,’ he says, adding that the expected consultation document has already slipped from the end of last year, to the end of March, to the end of June, and is now delayed again.

The second ask concerns biomethane's treatment within the UK emissions trading scheme (ETS). Under the current rules, biomethane injected into the gas grid in one part of the country and consumed via mass balancing in another is treated, for ETS purposes, exactly the same as fossil fuel gas. ‘That ridiculous situation,’ Earl says, ‘is well recognised by officials and by ministers. It is not controversial. It does need to be solved, but unfortunately it seems to be taking a long time.’

McAllister adds: ‘The UK is an academic outlier on this. We've now got government officials to a stage where they do not see this as a technical problem; it's just a bureaucratic one.’

Five asks

The task force originally identified around 13 policy priorities. It has since distilled these to five, a deliberate exercise in making a complex sector legible to politicians. ‘Part of what the task force is trying to do is make anaerobic digestion digestible to the public and to politicians,’ McAllister says. ‘Asking for thirteen things is probably a bit complicated.’

The five are: a national biomethane target; an ambitious post-2028 or post-2030 future support framework; zero rating for biomethane in the ETS; recognition of bio-CO₂ and digestate as strategic co-products; and formal acknowledgement of the gas infrastructure as a necessary prerequisite for biomethane at scale.

That last point matters more than it might appear. Biomethane plants are built where feedstock exists, whether that is livestock farms, food processing facilities, or distilleries. Without access to the gas network, each of those plants would be isolated, forced to move its output by far more expensive means.

‘If the gas network wasn't there,’ McAllister says, ‘these plants would be isolated and you would have to transport that biomethane via other much more expensive routes.’ The network is not incidental to the biomethane proposition; it is the thing that makes it viable at scale and at reasonable cost to a broad range of end users.

The economic case underpinning those asks is, McAllister argues, more robust than the government appears to appreciate. For every pound invested in biomethane in the UK, a commissioned report found, 85p stays in the domestic economy, driven by strong domestic supply chains, home-grown feedstocks and deep technical expertise in the sector.

The contrast with other low-carbon technologies is striking. ‘For every pound sterling you invest in solar, 90p disappears out of this country,’ he says. Under a high scenario reaching 120TWh by 2050, the task force projects 57,000 jobs and £70bn pounds of gross value added. ‘And these are pretty much AI-immune jobs,’ McAllister adds. ‘You can't get AI to build a digester. You need technically skilled, well-paid gas engineers to deliver this.’

The energy security argument has also sharpened since tensions in the Strait of Hormuz pushed gas import costs higher. Even if the government achieves its clean power 2030 mission in full, McAllister notes, the UK's gas import dependency in 2030 is still projected at around 70%. ‘The big question is: what is the government's gas supply plan? I haven't seen it. I don't know what it is. Is there one? Biomethane can play a role in that.’

The grid connection problem

On the operational side, FEN has relaunched the Green Gas Technical Forum, previously the Entry Customer Forum, with a renewed mandate and a new co-chairing structure that places network and producer representatives on equal footing. Five priority workstreams cover standardisation of grid entry units, harmonisation of connection processes across the four gas distribution network regions, maximising existing network capacity, reviewing earlier outputs and socialising the costs of entry reinforcement.

The fragmentation of the connection process across four privately owned GDN regions with different approaches has long been cited as a material barrier to growth, adding cost and delay and limiting the transfer of learning between projects. Earl is honest about the pace of change. ‘The chances of overnight change are pretty low,’ he says. ‘That's not really what we're looking for. But this is a genuine partnership between networks and producers to work together, and also to demonstrate to Ofgem and government that we are doing our bit: we're not just asking for targets and subsidies.’

The regulatory framework is beginning to reflect that ambition. The RIIO-ED3 settlement included a use-it-or-lose-it allowance for biomethane of £20m per GDN licence area, with a per-project cap of £2m. Earl welcomes the signal but flags that the blunt equal-allocation model does not reflect the uneven distribution of biomethane opportunity across the country. The East of England, for example, has disproportionate potential.

‘To have a binary “everywhere-gets-20-million doesn't quite work,"’ he says, describing active engagement with Ofgem to refine the approach. The more optimistic scenario is that ambition simply outpaces the available funding, which would itself demonstrate the case for further investment.

The task force is also commissioning a report examining what other countries have done to facilitate greater biomethane injection into the gas network, with a view to building a policy-ready set of international case studies. ‘We want to combine what this country is doing well with what others are doing better,’ McAllister says. ‘That will be a really important piece of work.’

A missed window?

The question of whether the previous government squandered the energy security moment created by Russia's invasion of Ukraine prompts a direct answer from Earl. ‘Yes, I do, very much so,’ he says. ‘France went really, really hard after biomethane as a pivot from what was going on in Ukraine. Germany and Italy to an extent as well. But in the UK there was no reaction or response when it came to biomethane. It was all about renewable electricity and electrification.’

McAllister pushes back on the idea that biomethane's international moment has passed or that it is primarily a European preoccupation. The Trump administration's Big Beautiful Bill retained the 45Z tax incentive for biomethane in the United States, not because America needs the gas, but because it is a proven waste management tool that supports the farming sector. Brazil, China and India are all expanding production. ‘It is incorrectly perceived as almost just a European thing,’ he says. ‘Biomethane is booming internationally.’

The bio-CO₂ opportunity

One dimension of the economic case that has received less public attention is the value of co-products. Anaerobic digesters produce not only biomethane but also a highly pure stream of bio-CO₂, used today across the food and drink industry, in hospitals, and in nuclear applications. The government recently paid £100m to keep a CO₂ facility on Teesside open in response to a supply shortage. McAllister argues that a scaled-up domestic biomethane sector could play a significant role in meeting that demand, and that the value of this output stream should be factored into any honest assessment of the sector’s economics.

The farming revenue case

A second co-product argument concerns what happens after the gas has been extracted. The residue from the anaerobic digestion process, digestate or bio-fertiliser in the industry's preferred terminology, can be returned to the land as a direct displacement for imported synthetic fertiliser. The UK has no domestic synthetic fertiliser manufacturing base, and a forthcoming carbon border adjustment mechanism is projected to add around £50 per tonne to imports if it proceeds. Future Biogas, operating in Lincolnshire, is already running a circular model in which rotational crops feed the digester and the digestate goes back to local farmers.

Only 2.5% of available organic farm feedstock is currently used to produce biomethane in the UK. McAllister points to this as a significant underutilised resource, and to the digestate economics as a meaningful part of the financial case for agricultural communities. A 15-to-20-year revenue stream from supplying feedstock and receiving bio-fertiliser in return offers something that few other sectors can currently provide to farmers who have faced considerable financial pressure in recent years. ‘Cows are not going to stop producing waste,’ McAllister says. ‘There is always going to be food waste. The potential revenue to the farming sector here is material.’ A further commissioned report on this dimension is currently in progress.

The transport case

Much of the recent commercial momentum has come from heavy goods vehicles, and the arithmetic behind it is compelling. A biomethane HGV costs around £130,000 against £100,000 for a diesel equivalent, a 30% premium at point of purchase. But over the typical seven-year operating life of a 44-tonne truck, the fuel cost differential and an 83% reduction in emissions combine to deliver a net saving of approximately £100,000 per vehicle, calculated before the additional cost pressure created by recent disruption to oil supply routes. ‘If you're a big company with a big fleet, that scales massively,’ McAllister says. ‘The profit margins in haulage are very small. £100,000 per vehicle over seven years is a huge saving.’

It is why companies including M&S, Tesco, John Lewis, DHL and Warburton's have already made the switch. For long-haul 44-tonne vehicles on motorway routes, electrification remains economically and infrastructurally impractical at meaningful scale. Biomethane is the commercially available, lower-carbon alternative that is already working in the real world.

The end users’ council the task force has established draws in a broader set of major downstream consumers, among them AstraZeneca, Diageo, Heineken, Pepsi and Scania, keeping them informed of policy developments and channelling their voices directly to government. Large companies telling ministers they want more biomethane, and explaining why, carries a different weight to industry bodies making the same case.

The provenance question

The broader message, though, is about provenance rather than competition between fuels. ‘We are going to need gas,’ McAllister says. ‘This is not a demand debate. It is a provenance debate. Where is it coming from? Biomethane is the low carbon answer to that gas supply question.’

Earl's closing emphasis falls on the gap between the quality of evidence the sector has assembled and the pace at which government has engaged with it. The National Energy System Operator, he says, has been substantively engaged and broadly agrees that biomethane has a material role to play. ‘It is starting to feel like government is behind,’ Earl says. ‘We have put some really good evidence on the table, and we really need government to respond.’

The evidence is there. The industrial alignment is there. What the sector is waiting for, both men agree, is a government that is ready to read the file.