UK may have accidentally locked itself out of a cheaper route to net zero, Cadent report warns

The UK may have inadvertently locked itself out of one of the most cost-effective routes to delivering net zero, according to a new report published today by Cadent.

The report finds that the Government’s carbon capture and storage (CCS) allocation processes have unintentionally excluded much of the UK's biomethane sector from participating in greenhouse gas removals (GGRs), despite the sector having the potential to generate one of the country's lowest-cost sources of carbon removals.

The findings are significant because achieving net zero will require more than simply reducing emissions. While renewable energy and energy efficiency will continue to play a critical role, some sectors, including aviation and industrial processes, are expected to retain emissions that are prohibitively expensive or technically difficult to eliminate entirely.

These industries will increasingly need to purchase greenhouse gas removals to offset remaining emissions.

According to the report from Cadent, the UK's largest gas distribution network, which has 47 biomethane production plants connected into its network in North West England, the Midlands, Yorkshire, East of England and North London, biomethane production offers a unique opportunity to help meet this demand.

Biomethane is produced from organic wastes such as food waste and agricultural residues. During the production process, a high-purity stream of biogenic carbon dioxide, known as bioCO2, is also created. If that carbon dioxide is captured and permanently stored, in Carbon Capture and Storage clusters - like HyNet and East Coast Cluster - it removes carbon from the atmosphere and can generate greenhouse gas removals that can be sold to companies seeking to offset residual emissions.

Analysis contained within the report suggests that when bioCO2 from multiple biomethane producers is aggregated and transported to carbon storage infrastructure at scale, the resulting greenhouse gas removals could become one of the lowest-cost removal pathways available to the UK.

The report also finds that revenues from selling these removals could provide biomethane producers with an additional income stream worth up to £20 per MWh of biomethane produced, potentially reducing the current subsidy requirement for biomethane production by around one-third.

At the sector's full potential of 120 TWh of biomethane production per year, the UK could generate approximately 17 million tonnes of bioCO2 annually. This is equivalent to around half of UK international aviation emissions. Even if only half of that potential is realised, the report suggests biomethane could provide around a quarter of the Climate Change Committee's engineered greenhouse gas removals target for 2050.

The report identifies several reasons why this opportunity is not taken up widely now, including that carbon capture infrastructure is still under construction and that policy development has historically focused on large industrial emitters.

However, it highlights that previous CCS allocation processes have also unintentionally excluded much of the biomethane sector by favouring large projects connected directly to pipelines, setting minimum scale thresholds that many biomethane producers cannot meet individually and preventing the use of non-pipeline transport solutions.,

This is a particular challenge because most biomethane plants are located in rural areas where direct pipeline connections are impractical. Instead, captured bioCO2 is expected to be transported by road to aggregation facilities before entering carbon transport and storage networks, a process known as non-pipeline transport (NPT).

The report says recent Government action is beginning to address the issue through the launch of the Non-Pipeline Transport Pathfinder process, which will enable a CCS cluster to source non-pipeline CO2 for the first time and could open the door to participation from hundreds of biomethane producers across the UK.

Dr Angie Needle, Director of Strategy at Cadent, said:

This report matters because it highlights a significant opportunity that has largely been overlooked. Biomethane is home-grown, rapidly-scalable renewable energy – and our energy security is more important now than ever. But we must also seize the added benefits from its production – including thousands of jobs secured or created, the digestate that becomes a fertiliser for farms and the bioCO2 route to reduced government subsidies.

The report also identifies further work needed to unlock the opportunity at scale. This includes:

• reducing the cost of capturing and transporting bioCO2
• piloting aggregation facilities that can combine carbon dioxide from multiple producers before injection into CCS networks
• assessing in greater detail how greenhouse gas removal revenues could reduce future subsidy requirements, and
• identifying areas where biomethane production and carbon capture infrastructure can be developed together.

Cadent is calling for the continued expansion of non-pipeline transport opportunities, accelerated development of CCS infrastructure, improved access for smaller carbon dioxide producers and further assessment of how low-cost domestic greenhouse gas removals could support the decarbonisation of sectors such as aviation.

The report concludes that by addressing these barriers, the UK could unlock one of its most cost-effective sources of carbon removals, encourage private investment in green gas production, strengthen energy security and reduce the overall cost of achieving net zero.

Read the report here: Reducing green gas costs with bioCO2 v7