Posted: 23 October, 2023. Written by Jesse Scharf
The Science Based Target Initiative (SBTi) have opened a call for evidence which could prove critical to the future of the RGGO market. The deadline for response is Nov 24th.
Full information is provided on the SBTi website here - Call for Evidence on Market Mechanisms (sciencebasedtargets.org)
Why is it important?
The rules on how RGGOs are used within an organisation’s carbon reporting, largely rely on the guidance and standards issued by the Green House Gas Protocol (GHGP) (see here for the latest on that topic),target setting and disclosure programmes such as the RE100, CDP and the SBTi.
The SBTi has emerged as the premier target setting scheme with many existing and potential green gas consumers signed up. There are over 3500 companies with approved targets which you can view here - Companies taking action - Science Based Targets.
Demand for RGGOs in the UK is driven by large corporates who are highly likely to refer to the GHGP, SBTi or CDP rules. If they do not have confidence that RGGOs will lower their Scope 1 emissions, they will be reluctant to purchase them and value will be lost from the biomethane sector. This will serve to reduce incentives for production, now and in the future.
What do SBTi want to know?
Quite rightly, SBTi believes that the actions encouraged within their framework must create genuine carbon reductions and setting companies with SBTi targets on the path to net zero emissions.
There has been a range of criticisms on the use of Environmental Attribute Certificates (EACs) of which RGGOs are one type. GGCS believes some of these arguments are valid, while others are misunderstandings have been addressed or are being addressed. Many criticisms are linked to EACs for renewable electricity and there is a lack of understanding about the similarity and difference between electricity and gas EACs. For example the EAC market for biomethane has always provided significant value to biomethane producers, were as electricity EACs have had no or low values in the past.
This call for evidence can provide SBTi with the information they need to be confident in allowing the use of EACs issued by robust and credible systems such as the GGCS.
What evidence will be useful to provide via this call?
GGCS, along with sector organisations such as ERGaR and EBA, will be drafting up replies, seeking input from their members and sharing information with them to engage with this process. GGCS members can expect a draft of our reply by the end of October.
The key will be to bring together existing evidence on the importance of renewable gas EAC(s) (such as RGGOs) in supporting additional biomethane generation. The framework for EACs to provide this kind of support is clear in RED II where it states that government support should account for the income received via GoO. In the UK’s current Green Gas Support Scheme it is clear in their impact assessment, that see they have to provide less support than they would if producers received no income from EACs. In GGCS’s view, this shows that the EAC market allows government money to go further, with more support for production than would otherwise be possible.
Reinforcing this message is what we hear from industry about how important EAC income is to their business models and that without this income, many new projects are simply not viable. We are also seeing early signs of unsubsidised production based on private income, with the EAC connecting producer to consumer who provide the critical long term offtake (AstraZeneca partners with Future Biogas to deliver net zero target – Future Biogas).
While this picture is clear in the mind of the biomethane industry, it has not yet been fully articulated to organisations such as the SBTi. This is the opportunity to change that, and we encourage all parties to engage with this process.