Exploring Carbon Neutral and Negative Gas for Industry Decarbonisation

Hello, Champions of Net Zero!

The global race to decarbonise our energy demands is heating up, and the stakes have never been higher. As companies scramble to formulate their decarbonisation strategies, many find themselves in a fog of ambiguity, striving to achieve Net Zero while grappling with the multitude of solutions available. Among these, biomethane and renewable gas emerge as crucial players in the quest for cleaner energy.

The foundation of most decarbonisation strategies can be distilled into a simple three-step process: Reduce, Replace, Offset. However, upon closer examination, it becomes evident that many organisations predominantly focus on the “Reduce” aspect, with only a cursory glance at “Replace.” By adhering to the Oxford Principles on decarbonisation, it’s essential that we embrace all three steps—starting today.

One of the most significant roadblocks on the path to Net Zero is the challenge of replacing fossil-based methane, commonly known as natural gas. The UK’s heavy reliance on gas complicates the removal of this energy source for various reasons. High capital costs, the structural limitations of ageing infrastructure, the potential impact of electrification on final products, and the inefficacy of alternative solutions all contribute to this dilemma.

Enter biomethane—a versatile and innovative solution that can help businesses transition to Net Zero. For any gas user connected to the gas grid, biomethane offers a pathway to decarbonising Scope 1 emissions through a Gas Purchase Agreement (GPA). Much like a Power Purchase Agreement (PPA), a GPA facilitates the delivery of biomethane to gas users, allowing for a straightforward method of attributing biomethane consumption through a process known as mass balancing.

Furthermore, when biomethane production incorporates carbon capture and storage, it becomes a source of net-negative gas. In this case, a GPA combined with mass balancing serves as a valuable tool for attributing carbon savings to the end user. Given the immense potential of biomethane as a decarbonisation solution, one must wonder: why isn’t it being utilised more extensively?

The answer lies in the acceptance of GPAs, which is still a hurdle for both regulators and the broader market. The perceived risks associated with this energy and decarbonisation solution may deter some businesses from pursuing it. To mitigate these risks, the UK government must step up and acknowledge the legitimacy of GPAs, following the lead of the European Union. Ideally, this acceptance should come with certain provisions:

• The producer and end user must be linked via a continuous pipeline that ensures traceability of the gas movement.
• The commodity—namely the gas—and its renewable credentials, such as green gas certificates and proof of sustainability (POS), should be bundled together for enhanced transparency and verification.
• Biomethane production should operate independently of government subsidies.

By implementing these measures, the UK can eliminate the risk of greenwashing and position itself at the forefront of global decarbonisation efforts.

While the government is expected to address GPA acceptance in the near future, businesses cannot afford to wait. Those eager to establish a GPA before the 2030 deadline must initiate discussions promptly. Once the government signals its intentions, a surge of interest in biomethane is likely to ensue, and only the proactive will secure access to supply.

Moreover, for businesses with obligations under the Emissions Trading Scheme (ETS), the landscape is shifting. As we approach 2050, in line with the UK Government’s legal commitment to achieving Net Zero, the allowance trajectory and the scope of obligated businesses are set to evolve. Fewer allowances will be available, free allowances will be phased out by 2026, and newly obligated industries will increase demand, inevitably driving up the price of allowances and exposing businesses to heightened financial risks.

This market instability is compounded by geopolitical conflicts, significant political changes, and the UK’s growing dependence on imported gas, alongside the planned elimination of coal. As a result, the costs of maintaining the status quo will continue to rise.

Therefore, the early adopters—those who are committed to future-proofing their operations—will undoubtedly gain a competitive edge in the marketplace.

As the energy landscape evolves, the adoption of biomethane as a decarbonisation solution is not merely an option, but a necessity. Embracing this innovative approach will not only help businesses reduce their carbon footprints but also contribute to a more sustainable and resilient energy future.

For more insights and updates on the journey towards a Net Zero future, stay tuned to the Net Zero News Network.

If you’re interested in learning more about biomethane and its role in decarbonisation, visit Future Biogas for additional resources and information.

This article originally appeared in the April 2025 issue of Energy Manager magazine. Subscribe here.