Global biogas investment reaches $4.7 billion in the 12 months ending May 2018
Biogas is a naturally occurring biological process similar to that which takes place in the stomach of a cow. Anaerobic digestion (AD) is the simple, natural breakdown of organic matter that occurs in the absence of oxygen into biogas (carbon dioxide and methane) and organic fertiliser called digestate. Biogas is classed as a renewable energy.
According to the World Biogas Association (WBA), governments and municipalities need to put biogas at the heart of their plans for meeting their country’s energy needs. They state that biogas can (amongst others):
- Reduce global climate change emissions by 20%
- Become a global sustainable industry worth £1 trillion
- Treat wastes that would otherwise produce harmful methane emissions, recycling them into valuable green energy, bio fertiliser and biochemicals
A recent publication by AcuComm, business intelligence providers in waste, bioenergy and recycling, estimates that global investment in biogas for the 12 months ending May 2018 reached 165 projects[1], worth US$4.7 billion or US$29 million each project on average. From a geographic standpoint, the four largest investors in biogas/AD plants were the USA, France, UK and Denmark who between them invested nearly US$3.4 billion.
The UK’s Waste Resources Action Programme (WRAP) has written that as of 31 January 2017, there were an estimated 266 operational AD plants in the UK with varying feedstock and an output of around 251MW. AcuComm points out that the largest proportion of AD plants globally are in the planning or contract award stages, potentially highlighting opportunities for investment.
In some countries, the UK included, governments have provided green subsidies to encourage production of this renewable energy source. Anaerobic-digestion.com, an independent AD blog, believes that Investors have been holding back in the UK because of uncertainty surrounding subsidies. In May 2018, the UK AD trade association Anaerobic Digestion & Bioresources Association (ADBA), stated that the recent reinstatement of the renewable heat incentive (RHI) tariff will give the UK’s green gas industry a vital boost[2].
Following the passing of legislation[3] through Parliament, from 22nd May 2018, AD plant operators in the UK will be able to claim a restored tariff for renewable heat generated for their Tier 1 biomethane and once their plant is commissioned they will receive a guaranteed tariff level for twenty years.
It will be interesting to see whether the continued drive to meet renewable energy targets and new UK legislation will provide the certainty that investors need to stimulate further investment in the AD industry?
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[1] Projects include biogas, AD and landfill gas projects
[2] Source: www.anaerobic-digestion.com
[3] The Renewable Heat Incentive Scheme Regulations 2018 No. 611