Special Report

Report calls on government to demonstrate biomass is genuinely sustainable

Government has provided £20 billion of support to businesses using biomass in the power and heat sectors as a key part of its net zero ambitions.

Report claims that despite significant biomass support, government sustainability compliance evaluation is inadequate.

The National Audit Office (NAO) report states that government cannot currently demonstrate that its approach to making sure generators comply with its sustainability requirements is adequate, despite relying on biomass, in combination with carbon capture, utilisation and storage (CCUS), to make a significant contribution to net zero goals.

No confidence in standards

Gareth Davies, Head of the NAO said: “If biomass is going to play a key role in the transition to net zero, the government needs to be confident that the industry is meeting high sustainability standards.

“However, government has been unable to demonstrate its current assurances are adequate to provide confidence in this regard.

“Government must review the assurance arrangements for these schemes, including ensuring that it has provided adequate resources to give it assurance over the billions of pounds involved.”

In 2022, biomass made up a significant 11% of the UK’s electricity generation but the NAO’s report sets out its view that lack of evaluation means the government cannot demonstrate confidence that industry is meeting sustainability standards.

The government and independent Climate Change Committee (CCC) considers biomass to be ‘low carbon’ if generators adhere to sustainability criteria covering land use and life cycle greenhouse gas emissions.

To enable government to monitor compliance, participants submit regular information to Ofgem and can draw on third-party certification – an approach which is set out in legislation. But the government has not evaluated whether its current arrangements are effective at ensuring compliance.

Net Zero depends on bioenergy’

A Department for Energy Security and Net Zero (DESNZ) spokesperson welcomed the report, which “found no evidence of firms not complying with our stringent sustainability criteria, which are in line with internationally recognised standards,” and confirmed future plans ‘as set out in the Biomass Strategy’ to strengthen sustainability criteria: “We will be consulting later this year on how we can go further than our peers.

“Biomass will provide a key role in a more secure, clean energy sector. It delivered around 9 per cent of the UK’s total energy supply in 2022, with generators only legally receiving subsidies if they prove they have complied with our strict rules.

“The Climate Change Committee has acknowledged that achieving net zero is dependent on solutions like Bioenergy with carbon capture and storage, which will help offset emissions from other industries.”

For biomass to play a significant role in meeting long-term climate targets depends on the success of government’s carbon capture utilisation and storage (CCUS) programme. If biomass is enabled with carbon capture and storage (BECCS), it could generate negative emissions. There are no BECCS plants currently operating in the UK. DESNZ has a programme to promote CCUS technology and is negotiating commercial terms with a first wave of eight carbon capture projects, though none of these are BECCS plants.

Taxpayer-funded support

Meg Hillier MP, Chair of the Committee of Public Accounts said: “Biomass could have a key role in achieving net zero, but only if it is genuinely sustainable.

“Government cannot show that its current arrangements are good enough to give it confidence that this is the case.

“Government must urgently review its assurance arrangements, so it knows that the billions of pounds of consumer and taxpayer-funded support are helping the UK meet its climate targets.”

On 16 January 2024, the Secretary of State for Energy Security and Net Zero granted development consent for Drax’s BECCS project.

Of the £22 billion of government subsidies provided to the biomass industry to date, around £16 billion has come from consumer-funded support – with £14 billion coming from the Renewables Obligation scheme, and £2 billion coming from Contracts for Difference, which guarantee generators a set price for the electricity they produce. As the largest biomass electricity generator by some distance, 36% of the Renewables Obligation funding has gone to Drax.

The NAO is recommending the government adequately assures itself that generators comply with sustainability requirements; and that government publishes the environmental impact of continuing subsidies for unabated biomass after 2027.

Commitment to sustainability

Responding to the NAO report, a Drax spokesperson said: “We welcome the National Audit Office’s (NAO) report which looks at the Government’s support for biomass.

“The NAO acknowledges the important role that sustainably sourced biomass has to play in addressing the climate crisis and displacing fossil fuels in the production of dispatchable electricity. It’s essential that sustainability reporting and criteria are robust and fit for purpose. This was also recognised in the Government’s biomass strategy published last year, which outlined a review which has already begun.

“We fully support that a review process should be carried out and look forward to playing our part and working with Government in this.

“We are committed to ensuring the biomass we source delivers positive outcomes for the climate, for nature and for the communities in which we operate.”