Monday 24 October 2022

The Carbon Column – Can gas be green?

When companies begin measuring their carbon footprint, they often focus on Scope 1 and 2 emissions. This is normal, as they are the easiest to calculate. The data is usually available from invoices or receipts held within a company’s internal system.

In the early stages, this is where businesses also focus their carbon reduction efforts. After measuring, targets can be set and clear reductions can be achieved. A company has the most influence over these emissions, so it makes sense to focus efforts here.

Reducing Scope 1 emissions means reducing emissions from stationary combustion, mobile combustion, fugitive emissions and process emissions. This includes natural gas, cars owned by the company, air conditioning units and other emitters categorised under Scope 1.

Actions to reduce Scope 1 emissions can be switching to lower carbon vehicles or electrifying premises. But what if a company can’t electrify their premises and must stay on natural gas?

What about green gas?

I was speaking with someone last week about green gas which is an alternative to natural gas.

Green gas or biomethane is typically produced through anaerobic digestion (AD) which is the breakdown of organic matter in the absence of oxygen. Organic matter can include food, animal or human waste, as well as grown crops that can fuel the digestor.

There is definite controversy around the different materials AD plants use to generate green gas, but I won’t get into that here.

When buying green gas, the company is buying a certificate such as a renewable gas guarantee of origin (RGGO). This scheme is similar to the electricity REGO scheme. A certificate is produced for every kWh of gas produced.

This can be sold and traded until it is retired by an end user. At this point, the “green gas” has been consumed.

Emissions from green gas can be classified as biogenic emissions, which are emissions originally captured through natural processes such as photosynthesis. These emissions would eventually cycle back into the atmosphere through degradation.

Switching to a green gas tariff reduces emissions in Scope 1. However, there are some challenges with green gas, specifically the certificates.

First, RGGOs are expensive. When I worked in this market, I noticed certificates achieving £10/MWh. This is equivalent to 1p/kWh and in today’s environment, keeping spend as low as possible is key for many.

The prices can fluctuate depending on the age of the certificates and the crop used to generate the gas, but it is clear the cost of going green is challenging.

Secondly, green gas isn’t always as green as you might think. Crops are grown to be cut down to feed the digestor. These processes can often be very intensive and unsustainable. These crop rotations can bring other environmental benefits, so it is important to consider everything before determining the overall sustainability of process.

I certainly believe anaerobic digestion plays an important role in our energy landscape. It will continue to grow with the roll out of schemes such as the Green Gas Support Scheme, bolstering the UK’s green gas generation and supporting the transition away from fossil fuels.

If you have any thoughts on green gas or any other net zero topic, please email me.