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Guide to the Green Gas Support Scheme (GGSS)

The Green Gas Support Scheme is central to the UK’s strategy for decarbonising the gas grid. However, in the first three years, only one scheme participant began generating biomethane for injection into the grid.

Despite the slow start, the GGSS has recently been extended to 2028, and several large-scale projects are due to come online in 2025. Projects in the pipeline are expected to produce enough green to heat 250,000 homes.

The scheme’s growth will come at a cost to gas consumers. It is funded through the Green Gas Levy, which is added as a standing charge to business gas bills.

In this guide, we break down everything you need to know about the GGSS:

• What is the Green Gas Support Scheme (GGSS)?
• The environmental goals of the GGSS
• How the Green Gas Support Scheme works
• Who can apply for the GGSS?
• How to apply for the GGSS
• Green Gas Levy (GGL)

What is the Green Gas Support Scheme (GGSS)?

The Green Gas Support Scheme is a government incentive to encourage biomethane production. Biomethane is a sustainable alternative to natural gas, which can be injected into the gas grid to make gas supplies greener.

The GGSS supports investment in Anaerobic Digestion facilities that produce biomethane for the grid, as follows:

• Receive organic waste material such as food waste or animal manure.
• Store the waste in a sealed tank with no oxygen (this is what “anaerobic” means).
• Conditions in the tank encourage bacteria to break down the waste and produce biogas.
• A biogas upgrading unit removes carbon dioxide from the biogas to create biomethane.
• The biomethane is compressed and injected into the gas grid.

The GGSS provides an incentive by paying investors for each kWh of biomethane the plant produces.
Payments under the GGSS are a direct government subsidy and not for the purchase of the gas. GGSS participants sell the biomethane they inject into the grid on the wholesale gas market, receiving a separate payment from energy suppliers.

The environmental goals of the GGSS

The Green Gas Support Scheme offers a significant financial incentive for companies to invest in generating green gas and injecting it into the national grid.

In this section, we explain the environmental and broader objectives of the scheme.

Lower emissions from gas consumption

Gas boilers in homes and businesses account for approximately 30% of the UK’s greenhouse gas emissions.

Injecting green biomethane is one of the few methods available to reduce emissions associated with gas supply.

Biomethane produced from waste products can achieve an 80% reduction in emissions compared to natural gas.

Promotes a circular economy

The GGSS criteria effectively require the use of feedstock (the fuel used in Anaerobic Digesters) derived from waste products, helping to create a circular economy for organic materials.

Specifically, the following waste materials are most commonly used under the scheme:

• Food waste
• Manure and slurry
• Agricultural residues

Enhances energy security

Biomethane injected under the GGSS is produced on mainland Britain and serves as a direct alternative to natural gas. Britain imports more natural gas than it produces, relying on energy imports to meet demand.

Encouraging biomethane production reduces the need for natural gas imports, helping to shield the country from wider geopolitical events that impact gas prices.

How the Green Gas Support Scheme works

Participants in the GGSS receive tariff payments from Ofgem for 15 years, at a rate that increases with inflation.

These tariff payments are in addition to investors’ revenue from selling biomethane on the wholesale market to energy suppliers.

Green Gas Support Scheme Tariffs

The table below shows the current tariff rates offered under the GGSS, based on the start date of each tariff:

GGSS tariff rates are adjusted each year in line with the Consumer Prices Index (CPI) inflation rate.

Source: Ofgem – Green Gas Support Scheme tariff table

Who manages the GGSS?

The Green Gas Support Scheme is administered by the energy regulator Ofgem.

The government’s Department for Energy Security and Net Zero (DESNZ) provides oversight of the GGSS, ensuring it aligns with the UK’s decarbonisation goals.

Funding for the GGSS

Ofgem makes quarterly tariff payments to participants under the GGSS.

The scheme is not funded through general taxation; instead, it is paid for by commercial gas consumers through an additional charge on their business gas bills.

This funding mechanism is known as the Green Gas Levy, which we explain in more detail below.

Compatibility with other support schemes

The GGSS is not compatible with most other government renewable energy support schemes. This is to prevent double funding and ensure fair use of public money.

Here are some key considerations regarding GGSS compatibility:

• Renewable Heat Incentive (RHI): The GGSS replaced the RHI for new biomethane-to-grid projects.
• Green Gas Certification Scheme: Green Gas Certificates can still be generated and sold to suppliers.
• Renewable Transport Fuel Certificates (RTFCs): Not compatible. Gas supported under the GGSS, if later used for transport, cannot also benefit from the RTFC scheme.
• Contracts for Difference (CfD): The CfD scheme is designed to support renewable electricity generation, not gas production.

Who can apply for the GGSS?

The Green Gas Support Scheme is open to anyone willing to invest in a new Anaerobic Digestion facility that will produce biomethane for injection into the gas distribution grid.

It’s important to note that the application process is lengthy, costly, and only realistically viable for large-scale projects.

Small-scale Anaerobic Digesters are more likely to benefit from the Smart Export Guarantee scheme by combusting biogas onsite to generate renewable electricity, which can then be fed into the local distribution network operator grid.

The section below summarises the eligibility criteria for participating in the GGSS.

Business and project eligibility

To participate in the GGSS, you must invest in a new Anaerobic Digestion facility located in Britain that will produce biomethane for injection into the gas grid.

The Anaerobic Digestion facility must meet the following sustainability criteria:

• Injected biomethane must have lifecycle emissions of less than 24g CO₂ per megajoule.
• The feedstock must come from sustainably managed land.
• The biomethane must not be generated from landfill gas.

The low-emission requirements for biomethane restrict the types of feedstock to sustainable sources only.

Feedstock sustainability criteria

The GGSS lifecycle emissions criteria are assessed based on the average emissions from the feedstock mix used, allowing participants to utilise a combination of fuels.

In effect, the rules require the use of low- or negative-emission feedstocks. Here is an overview of the relative emissions associated with different types of feedstock:

The rules significantly restrict the use of purpose-grown crops such as maize and wheat, as these compete with domestic food production.

Sustainability reporting requirements

Participants in the GGSS must adhere to strict reporting guidelines to continue receiving payments under the scheme.

The mandatory reporting requirements include:

• Feedstock reporting: Detailed records of the feedstocks used, including type, source, and quantity, must be maintained. These must be reported to Ofgem regularly via a Fuel Measurement and Sampling questionnaire.
• Sustainability declaration: Participants must periodically calculate the emissions from injected biomethane and declare that the fuel meets the required sustainability criteria.
• Sustainability audit: An independent audit must be arranged annually, and the report must be submitted to Ofgem.

How to apply for the GGSS

The application process for the Green Gas Support Scheme consists of three distinct phases. This section outlines the information required and the steps involved in each stage.

The original deadline for new applications was 30 November 2025, which has now been extended to 31 March 2028.

Stage 1 – Apply for Provisional Tariff Guarantee Notice (PTGN)

The first stage of the GGSS application process is to apply for a Provisional Tariff Guarantee Notice (PTGN).

A PTGN guarantees a specific tariff rate per kWh of gas injected into the grid, subject to the successful completion of the second and third stages of the application process.

Stage one applicants must have a detailed business plan to construct their new Anaerobic Digestion facility and are required to have:

• An agreement from the local grid for a new business gas connection to inject the biomethane that the project will generate.
• Planning permission for the Anaerobic Digester and associated production processes.
• A projected date on which biomethane injection will commence.
• The expected initial capacity of the project.
• The location of the Anaerobic Digester and injection point.

Applicants must be able to secure financing within three weeks of receiving a Provisional Tariff Guarantee Notice. This typically means that stage one applicants will have already begun negotiating investment or loan agreements for their project.

Stage 2 – Financial close

Stage two of the application process begins when Ofgem issues a Provisional Tariff Guarantee Notice (PTGN).

The PTGN requires the applicant to demonstrate that sufficient funds are available to complete the project’s construction within three weeks of the notice being issued. This is typically evidenced by a signed investment or loan agreement.

Ofgem also requires an independent auditor to verify that the funds are available and committed to the proposed project.

Additional evidence may be requested by Ofgem at this stage, including construction contracts, land ownership or lease agreements.

A tariff guarantee is formally awarded to the project if the stage two application is accepted.

Stage 3 – Commissioning and final application

Upon completion of stage two, Ofgem will issue a Tariff Guarantee Notice (TGN), which will specify:

• The guaranteed tariff rates the project will receive for the gas injected.
• The deadline by which biomethane injection must commence.
• A description of the equipment used to produce biomethane.
• Any other conditions attached to the guarantee.

The deadline for commencing biomethane injection is typically six months from the expected injection date provided in stage one.

Stage three of the application process demonstrates that the project has been built and gas injection has commenced.

The application must include sufficient information for Ofgem to verify that the scheme requirements have been met for the Anaerobic Digestion facility. This includes:

• Construction cost data and details of equipment purchased.
• Fuel measurement and sampling processes.
• Business gas meter details are used to measure injection volumes.
• Feedstock information outlining the organic material used to produce biomethane.

Green Gas Levy (GGL)

Green Gas Support Scheme payments are funded through the Green Gas Levy.

The Green Gas Levy is paid by business gas suppliers, who pass the cost on to all customers with an active gas supply.

Green Gas Levy rates

The Green Gas Levy is included within business gas standing charges at the following rates:

It is important to note that the current impact of the GGL on business gas prices is minimal, as the number of participants in the scheme remains low. However, the GGL is expected to rise significantly as more projects join the scheme.

Green Gas Levy exemptions

An exemption from the Green Gas Levy is currently available to business energy suppliers that provide at least 95% green gas in their commercial gas tariffs.

At present, only one gas supplier makes use of this exemption. Most green business energy suppliers offering a green gas product do so by purchasing carbon credits rather than supplying actual green biomethane.

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