ADBA urges ministers to unlock Green Gas Support Scheme funding as developers face continued uncertainty despite a commissioning extension to 2030.
Britain's biomethane industry faces an uncomfortable contradiction following the UK Budget of 28 October 2026. The government wants to reduce dependence on imported gas, support domestic energy production and maintain its commitment to net zero. Yet a funding constraint is preventing further approvals for some new biomethane projects that could contribute to those objectives.
The Anaerobic Digestion and Bioresources Association (ADBA) has criticised the Budget for failing to resolve the problem, warning that investment-ready anaerobic digestion projects could be delayed or cancelled.
In a press statement issued on 28 October, the trade association welcomed some changes to energy policy but argued that biomethane had been overlooked while the government made new funding commitments to hydrogen.
Ofgem's published figures provide evidence that the problem is real: 16 applications for Green Gas Support Scheme tariff guarantees were in the budget queue as of 5 October 2026.
For developers, investors and AD plant operators, the immediate question is whether the government will release additional funding authority before further projects are lost.
What ADBA Said About the October 2026 Budget
ADBA's response was sharply critical of the government's failure to increase the available funding for the Green Gas Support Scheme (GGSS).
The association welcomed the government's commitment to net zero and its efforts to reduce household energy bills. It also supported the decision not to introduce the planned Gas Shipper Obligation, which would have added costs to gas supplies, including biomethane.
However, ADBA contrasted the continuing GGSS funding constraint with the government's decision to provide £27 million of public funding for the first Hydrogen Allocation Round in 2027–28.
ADBA argues that biomethane is already commercially established and capable of replacing fossil natural gas in the existing gas network.
It also says that more than a dozen projects are ready to proceed but remain unable to secure the support needed for investment decisions.
These are the association's assessments and policy arguments. The precise commercial readiness of individual projects, and any comparison of their value for money with hydrogen projects, would require project-specific evidence.
Ofgem Confirms 16 Biomethane Applications in the Funding Queue
The most significant evidence comes from Ofgem, which administers the Green Gas Support Scheme.
According to its published scheme figures, as at 5 October 2026:
- 97 tariff guarantee applications had been made;
- 37 tariff guarantees had been granted;
- 15 participants had been registered under the scheme;
- 16 tariff guarantee applications were in the budget queue.
Ofgem states that the application budget cap has been reached and that insufficient budget is available to approve further applications under the existing limits.
The regulator therefore operates a queue, with applications potentially progressing if additional budget becomes available or previously allocated capacity is released.
This distinction is important. A project in the budget queue is not necessarily technically unsuitable or commercially unviable. It may simply be unable to obtain a tariff guarantee within the current funding limits.
However, a queued application should not automatically be described as a fully consented, financed or construction-ready plant. Those are separate project development milestones.
Source: Ofgem: Green Gas Support Scheme Applications and Budget Queue.
Why Does the GGSS Have a Funding Queue?
The Green Gas Support Scheme supports eligible biomethane production for injection into the gas grid.
Successful applicants receive tariff support linked to eligible biomethane production, subject to the scheme's rules.
However, the government limits the financial commitments that can be made through an application budget cap.
For the 2026–27 financial year, the application budget cap remains at £124.9 million.
The difficulty is not simply whether money remains unallocated in a particular year.
A new biomethane plant may receive tariff support over many years. Its projected payments must therefore be assessed against the relevant budget limits throughout the applicable period.
Ofgem's published October figures illustrate the problem. They show remaining budget in some financial years but very limited headroom in later years, when the indicative cost of queued applications is substantially higher.
For example, Ofgem's figures for 2029–30 showed approximately £1.34 million of remaining budget against an indicative queue requirement of approximately £112.78 million.
Those figures are a snapshot, not a forecast of actual payments or a guarantee of future allocations. Nevertheless, they help explain why available headroom in one financial year does not necessarily permit another project to be approved.
The problem is therefore one of authorised multi-year budget capacity, not merely the existence of money somewhere within the wider levy system.
Commissioning Deadline Extended to 2030 — But Funding Is Still the Obstacle
Earlier in October, the government introduced an important change to the GGSS regulations.
On 16 October 2026, the commissioning and Stage 3 application deadline was extended to 31 March 2030.
This gives eligible projects more time to complete construction and commissioning.
However, Ofgem confirms that the deadline for submitting new Stage 1 applications remains 31 March 2028.
There is also an important qualification for later-commissioning plants: eligible tariff payments cannot extend beyond 31 March 2043, meaning that some projects commissioned after March 2028 will have shorter support periods.
The extension is welcome for projects facing construction, equipment procurement, planning or gas-grid connection delays.
But it does not automatically create additional tariff funding.
Extending the time available to commission a plant is not the same as providing the budget authority needed to approve it.
That distinction is central to ADBA's criticism of the Budget.
Source: Ofgem: Green Gas Support Scheme Guidance, Version 3.0.
Why Is Hydrogen Receiving Funding While Biomethane Projects Wait?
The October Budget confirmed that the planned Gas Shipper Obligation would not be introduced.
Instead, the government will publicly fund Hydrogen Allocation Round 1 contracts, with a £27 million increase in the Department for Energy Security and Net Zero's resource budget for 2027–28.
The government also indicated that future hydrogen contracts it chooses to support would be publicly funded, subject to value for money.
ADBA argues that this decision creates an imbalance.
In the association's view, biomethane is a proven low-carbon gas already being produced and injected into the network, yet further GGSS-supported development is constrained by the existing budget cap.
Its argument is that government support should recognise the contribution of domestic biomethane to energy security as well as emissions reduction.
There is a legitimate policy question here, although biomethane and hydrogen should not be treated as interchangeable in every application.
Biomethane can generally substitute for natural gas when upgraded to the required gas-grid specification. Hydrogen has different physical properties, infrastructure requirements and potential industrial applications.
Consequently, claims that one technology provides better value than the other require comparisons based on the intended application, emissions performance, lifecycle costs and alternative energy supplies.
Nevertheless, the Budget has brought the contrast in funding arrangements into sharp focus.
Source: HM Treasury: Budget 2026.
Could Biomethane Help Reduce Britain's Dependence on Imported Gas?
Biomethane offers an important advantage: it can be produced domestically from suitable organic feedstocks and used within the existing natural gas system after upgrading and compliance with grid specifications.
Feedstocks can include food waste, agricultural residues, livestock manures and other biodegradable materials.
These are processed in anaerobic digestion plants, producing biogas that can be upgraded by removing carbon dioxide and other unwanted constituents.
The resulting biomethane can then be injected into the gas grid where a suitable connection and the necessary technical approvals are available.
Domestic biomethane production can reduce the amount of fossil gas required to meet a given level of demand, potentially reducing exposure to imported natural gas and liquefied natural gas (LNG).
However, the scale of this contribution depends on feedstock availability, production capacity, project economics, sustainability requirements and gas-network access.
ADBA considers expansion of the sector an important opportunity to strengthen UK energy security.
That case deserves examination alongside other measures to reduce fossil gas demand, including energy efficiency, electrification and alternative low-carbon energy supplies.
Why Funding Uncertainty Can Be Particularly Damaging to AD Developers
Developing a commercial biomethane plant involves substantial expenditure long before gas production begins.
A project may require:
- Feedstock supply agreements and assessments;
- Planning permission and environmental permits;
- Detailed engineering design;
- Gas-grid connection studies and agreements;
- Equipment procurement and construction contracts;
- Financing arrangements supported by credible revenue forecasts.
For projects relying on GGSS support, uncertainty over the availability of a tariff guarantee can affect the investment decision.
Without sufficient certainty over future revenues, lenders and investors may be unwilling to commit capital, even where the project has progressed through other development stages.
Delays also have consequences. Supplier quotations expire, construction costs change, planning conditions may need further attention and feedstock arrangements can become more difficult to maintain.
ADBA warns that a prolonged funding freeze could cause some projects to be cancelled.
That is a credible commercial risk, although the outcome for each project will depend on its financing, contractual commitments and alternative revenue opportunities.
Could Unspent Green Gas Levy Revenue Solve the Problem?
ADBA has suggested several possible approaches, including increasing the GGSS budget cap, making use of levy revenue already collected but not spent, or providing direct Exchequer support.
However, it is important not to confuse three separate concepts:
- Levy revenue collected: money raised through the Green Gas Levy under the scheme's funding arrangements;
- Application budget authority: the limits within which new tariff commitments can be approved;
- Actual tariff expenditure: payments made to eligible producers according to the scheme's rules and qualifying biomethane production.
The existence of levy receipts does not, by itself, authorise Ofgem to approve applications beyond the existing budget limits.
Any increase in the scheme's spending authority would require the appropriate government decision and implementation through the relevant budget-setting arrangements.
Equally, the availability and potential use of any accumulated levy funds would need to be established from official financial information.
For developers, the decisive issue is whether the government changes the budget limits sufficiently to allow additional tariff guarantees to be issued.
What Does the Budget's Energy Security Exception Mean?
The October Budget states that, pending a new Cost Control Framework planned for the 2027 spending review, no further policy costs will be placed on bills unless they reduce bills or are essential for security of supply.
ADBA believes domestic biomethane should qualify under the energy security rationale.
That provides a possible policy argument for additional support, but it is not an automatic exemption that requires the government to increase GGSS funding.
Ministers would still need to decide whether additional biomethane support meets the relevant policy, affordability and value-for-money requirements.
ADBA is urging them to make that decision now rather than wait until the next spending review.
What Happens Next for the Green Gas Support Scheme?
Three developments will be particularly important for the industry.
First, any announcement from DESNZ increasing the GGSS application budget cap. This could allow further applications to progress, depending on their position in the queue and the available budget profile.
Second, changes in Ofgem's published queue. Ofgem updates its scheme information regularly, and applications may move as funding capacity changes or other applications are withdrawn or rejected.
Third, the government's wider decisions on energy policy costs and security of supply. The planned 2027 Cost Control Framework could influence future support arrangements, but developers face decisions now.
Projects already in the queue should continue to monitor official Ofgem guidance and maintain contact with the scheme administrator regarding their applications.
They should not assume that the commissioning extension automatically resolves the funding position.
Conclusion: A Budget Decision the Biomethane Industry Is Still Waiting For
The October 2026 Budget contains measures intended to control energy costs and reduce exposure to volatile international fuel markets.
Yet the funding constraints affecting new GGSS-supported biomethane projects remain unresolved.
ADBA's criticism is therefore more than a general request for increased renewable energy subsidies. It highlights a specific obstacle facing an established industry capable of producing renewable gas from domestic organic resources.
Ofgem's figures confirm that 16 applications were waiting in the scheme's budget queue in early October.
The commissioning extension to 2030 provides additional time, but not necessarily the financial authority needed for projects to proceed.
The question now is whether the government will act to unlock further biomethane investment, or allow the queue to persist while the next spending review approaches.
For an industry that depends on long-term investment decisions, the answer matters.
Sources and Further Reading
- ADBA: Press release, "Budget leaves biomethane behind, says the UK trade association", issued 28 October 2026. ADBA official website.
- Ofgem: Green Gas Support Scheme applications, tariff guarantees and budget queue.
- Ofgem: Green Gas Support Scheme Guidance Version 3.0.
- HM Treasury: Budget 2026: Official Government Document.
Editorial analysis for Anaerobic Digestion News, 28 October 2026. The article distinguishes the trade association's position from the published government and Ofgem evidence. Scheme figures quoted are those available as of 5 October 2026 and may subsequently change.
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