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Economic News

Watchdog calls on government to review biomass sustainability monitoring

By Abigail Townsend

Date: Wednesday 24 Jan 2024

LONDON (ShareCast) - (Sharecast News) - The government cannot prove biomass power plants meet sustainability rules and should review its monitoring arrangements, the National Audit Office said on Wednesday.
Biomass-fuelled power plants supplied around 11% of the UK's electricity in 2022.

The sector has long been backed by government, which has provided more than 20bn in support to businesses using biomass over the last twenty years. Biomass is a core part of the current government's net zero strategy.

But in a report published on Wednesday, the NAO said the government could not demonstrate its approach to making sure generators comply with the sustainability requirements was adequate.

The sector is regarded as low carbon but only as long as generators adhere to specific sustainability criteria set out by government and monitored by Ofgem.

The NAO noted that generators submitted regular, certified information to Ofgem, but added: "The government has not evaluated whether its current arrangements are effective at ensuring compliance."

The watchdog has therefore recommended that the government "adequately assures itself" that generators comply with sustainability requirements. It also called on the government to publish the environmental impact of continuing subsidies for unabated biomass after 2027.

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."

Welcoming the report, the Department for Energy Security and Net Zero said it had not found evidence of firms not complying with "our stringent sustainability criteria, which are in line with internationally recognised standards".

"We will be consulting late this year on how we can go further than our peers. Biomass will provide a key role in a more secure, clean energy sector."

FTSE 250 firm Drax, which owns several of the UK's largest biomass facilities, said: "It's essential that sustainability reporting and criteria are robust and fit for purpose.

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

Biomass generators, which use plants or food waste, release carbon dioxide. But they are categorised as low carbon as the trees and plants sequester carbon as they grow.

Much of the biomass used by Drax and other companies in the UK is also imported, adding to the sector's footprint.

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