Annex B: Biomethane within the newly drafted ‘Land Sector and Removals Guidance’ is already having an enormous impact on the global biogas sector — inhibiting the immediate decarbonisation of the agriculture, waste management and gas sectors. The proposed changes have the potential to immediately halve investment in this renewable technology.
The co-signatory organisations ask you to remove Annex B in its entirety as a matter of urgency and revert back to the previous annex of the Scope 2 Guidance whereby a market-based approach for biomethane is acceptable for scope 1 and 3 emissions as far as scope 2 quality criteria are met. Failing to do so will have severe consequences on the race to Net Zero.
Methane is responsible for roughly 30% of global warming since pre-industrial times, and methane emissions are rapidly growing. 19% of these emissions come from organic wastes generated by human activity. By first capturing and then recycling these wastes into green gas, bioCO2 and other valuable bioresources, the biogas sector alone could deliver half of the Global Methane Pledge, one third of today’s global natural gas consumption, and a 10% reduction in total global greenhouse gas emissions.
The proposed guidance (Annex B) necessitates the use of physical biomethane, delivered via a private pipe, or road, for it to be allowed within a company’s Scope 1 emissions reporting. However, biomethane plants are rarely co-located with industrial users due to numerous constraints, not least the supply of local organic feedstock, planning constraints and availability of agricultural land. Gas grids present the most efficient and cost-effective means of connecting these renewable energy producers with renewable energy users. By effectively requiring the transportation of biomethane by road or private pipe to gas users, the proposed guidance will unnecessarily cause additional carbon emissions and significant costs to be incurred — potentially making the whole investment unviable.
The approach undermines the emerging market for biomethane certificates, which has been funding new anaerobic digestion infrastructure and is capable of tracking biomethane through a gas grid. This market has shown that, with effective eligibility criteria, certificates can fund the production of additional green gas — breaking the sector’s current reliance on government support — and drive biogas growth to its full potential.
The proposed new guidance will prevent companies from achieving their carbon reduction targets. Many of the industries purchasing biomethane certificates are unable to electrify their operations due to cost and a lack of suitable alternatives for renewable heat. Not recognising tradable certificates in the reporting of emissions reductions from biomethane consumption will, therefore, remove a major incentive for these firms that would otherwise be able to contribute to the decarbonisation process and fund additional biomethane production.
Furthermore, the proposed change of the corporate standard is not consistent with EU regulations, which will generate misunderstandings and will create inconsistencies in analysis.
The biogas industry recognises, however, the importance of ensuring that biomethane certificates do indeed evidence real decarbonisation and additionality, and is therefore committed to working with the WRI and WBCSD to ensure robust criteria are developed.
Market-based mechanisms are crucial for the decarbonisation of energy networks worldwide — both gas and electricity. We therefore urge you to remove Annex B and revert back to the previous annex of the Scope 2 Guidance whereby a market-based approach for biomethane is acceptable for scope 1 and 3 emissions as far as scope 2 quality criteria are met. It will indeed ensure that investor confidence is restored as soon as possible. The uncertainty triggered by this proposal has already slowed down investment. Urgent action is, therefore, essential.