Here is a link to the background to this and the opportunity to give the government your views, if you think it is even worth bothering. The idea is to use biomethane to replace some of the naturally occurring methane. It is claimed that this will save 6% of the emissions of CO2 from the heating sector which in turn is about 30% of the UK emissions total. The government claim the levy will only add a small amount of up to £7 per year to gas bills, but is it really worth it to save such a relatively small amount of emissions, particularly when they are planning to phase out methane gas altogether?
via climate science
September 25, 2020 at 06:03PM
The UK is the first major economy in the world to set a legally binding target to achieve net
zero greenhouse gas emissions by 2050. We have already made progress towards this goal:
emissions from buildings have fallen by 20% between 1990 and 2017.1 Currently, heating our
homes, businesses, and industry is responsible for a third of the UK’s greenhouse gas
emissions.2 Decarbonisation of heat is recognised as one of the biggest challenges we face in
meeting our climate targets.
The UK also faces the huge challenge of the COVID-19 pandemic and the wide range of
impacts this is having on the economy and citizens. The government is committed to the UK’s
recovery, with decarbonisation being an important opportunity to help support the effort. For
example, the Chancellor announced a £3 billion green investment package in July 2020 that
could help support around 140,000 green jobs and upgrade buildings and reduce emissions.
Earlier in the year, in April, the government published a consultation on ‘Future Support for
Low Carbon Heat’.3 This set out proposals for a new Green Gas Support Scheme to increase
the proportion of green gas in the grid, through support for biomethane injection. It also set out
proposals for a Clean Heat Grant scheme to follow on from the Renewable Heat Incentive, to
help deliver the phase-out of high carbon fossil fuel heating. The ‘Future Support for Low
Carbon Heat’ consultation has now closed, and we are analysing responses. The government
response is expected to be published this winter.
The Green Gas Levy was announced at the March 2020 Budget and will be the funding source
for the Green Gas Support Scheme mentioned above. They are both expected to launch in
autumn 2021, while the first levy collection is intended to be in April 2022. This support for the
biomethane sector will lead to carbon savings of 21.6MtCO2e over the lifetime of the scheme.
It will also help to boost green jobs by maintaining and building growth in the biomethane
industry at a time when economic recovery will be very important. The ‘Future Support for Low
Carbon Heat’ consultation and Impact Assessment provide more detail on the benefits of
supporting biomethane injection.
This ‘Consultation on a Green Gas Levy’ sets out proposals for the new levy to be placed on
licensed gas suppliers. We anticipate that suppliers will pass the costs of the levy onto gas bill
payers in the domestic and non-domestic sectors. Given that the benefits of decarbonisation
through green gas injection will be shared by all users of the gas grid, it is considered
appropriate for gas users to fund the next stage of this transition.
We expect bill additions to be relatively minor, estimated to peak at around £6.90 on an annual
gas bill according to our current analysis. It should be noted that all references in this
consultation to bill impact amounts are current estimates and will be subject to decisions made
on the Green Gas Support Scheme following the ‘Future Support for Low Carbon Heat’
consultation, as well as on this consultation.
We are committed to ensuring the impact on is as low as possible. We will implement a robust control framework that includes an annual
budget cap to ensure impacts on bills do not rise unexpectedly.
The levy design proposals aim to minimise administrative burden on all parties wherever
possible and take account of lessons learnt from other decarbonisation levy schemes.
The policy proposals set out in this consultation form part of a wide package of work related to
the decarbonisation of heat. This includes the Heat and Buildings Strategy, to be published
later this year, which will set out the immediate actions we will take for reducing emissions from
buildings. This will include energy efficiency measures and low-carbon heating as part of an
ambitious programme of work required to enable key strategic decisions on how we achieve
the mass transition to low carbon heat.
The government has also committed to the ‘Net Zero Review’, which is a review into funding
the transition to a net zero greenhouse gas economy and how the UK can maximise economic
growth opportunities from this transition.4 In addition to the wide range of benefits expected
from the transition, further costs are also likely, and we will need to consider how those costs
will be funded and where they will fall. A priority for the Net Zero Review is to ensure a fair
balance of contributions from all those who will benefit, including considering how to reduce
costs for low income households.
We recognise that recent months have been a very challenging time for businesses in this
sector due to COVID-19 and we are keen to understand how the Green Gas Levy can be
successfully implemented while taking account of these recent challenges and their impacts.
We welcome views from stakeholders with an interest including small, medium, and large gas
suppliers. We also recognise that some consumers and businesses have had difficulty with
paying their energy bills in recent months, and we are keen to hear from organisations
representing those who will be impacted through the additions to gas bills. There is also a
section on ‘Backdated payments’ regarding initial payments on the Green Gas Support
Scheme, to which we would welcome views from the biomethane industry.
We will continue to monitor the impacts of the COVID-19 situation on gas suppliers and gas
billpayers throughout the development of this policy.