NAO: UK government failing to ensure compliance with biomass sustainability requirements
Over the past two decades, the government has provided more than £20 billion (€23.4 billion) of support to businesses using biomass in the power and heat sectors.
The government and independent Climate Change Committee (CCC) considers biomass to be low-carbon if generators adhere to sustainability criteria set by government and monitored by Ofgem.
To enable government to monitor compliance with these criteria, participants submit regular information to Ofgem and can draw on third-party certification – an approach which is set out in legislation. But the government has not evaluated whether its current arrangements are effective at ensuring compliance, according to the NAO.
The organisation's new report sets out its view that the lack of an evaluation means the government cannot demonstrate that its current arrangements are adequate to give it confidence that industry is meeting sustainability standards.
The Department for Energy Security and Net Zero (DESNZ) argues that its approach is proportionate, and, looking to the future, has committed to strengthening its sustainability criteria.
For biomass to play a significant role in meeting long-term climate targets depends on the success of government’s carbon capture utilisation and storage (CCUS) programme, said the NAO.
If biomass is enabled with carbon capture and storage (known as BECCS), it could generate negative emissions. There are no BECCS plants currently operating in the UK. DESNZ has a programme to promote CCUS technology and is negotiating commercial terms with a first wave of eight carbon capture projects, though none of these are BECCS plants.
On 16 January 2024, the Secretary of State for Energy Security and Net Zero granted development consent for Drax’s BECCS project.
DESNZ is considering whether to provide transitional support to large scale biomass generation, such as Drax and Lynemouth beyond 2027, when both their CfDs and Drax’s support through the Renewables Obligation is due to finish, to enable them to convert to BECCS in the future.
If biomass is unable to make the contribution to achieving net zero that government currently expects, then DESNZ may need to increase activity in other areas to reach its 2050 target, said the NAO.
The NAO is recommending the government adequately assures itself that generators comply with sustainability requirements; and that government publishes the environmental impact of continuing subsidies for unabated biomass after 2027.
“If biomass is going to play a key role in the transition to net zero, the government needs to be confident that the industry is meeting high sustainability standards," said Gareth Davies, head of the NAO.
“However, government has been unable to demonstrate its current assurances are adequate to provide confidence in this regard.
“Government must review the assurance arrangements for these schemes, including ensuring that it has provided adequate resources to give it assurance over the billions of pounds involved.”
A Department for Energy Security and Net Zero spokesperson said: “We welcome the NAO’s report, which found no evidence of firms not complying with our stringent sustainability criteria, which are in line with internationally-recognised standards.
“As set out in the Biomass Strategy, we will be consulting later this year on how we can go further than our peers.
“Biomass will provide a key role in a more secure, clean energy sector. It delivered around 9 per cent of the UK’s total energy supply in 2022, with generators only legally receiving subsidies if they prove they have complied with our strict rules.
“The Climate Change Committee has acknowledged that achieving net zero is dependent on solutions like Bioenergy with carbon capture and storage, which will help offset emissions from other industries.”