As part of the government’s efforts to decarbonise in line with their net zero strategy, the Department for Business, Energy & Industrial Strategy (BEIS) is introducing a new non-commodity element into the gas bill called the Green Gas Levy (GGL), administered by Ofgem.
What is the Green Gas Levy (GGL)?
The Green Gas Levy places obligations on licensed gas suppliers to make quarterly levy payments, in order to fund the Green Gas Support Scheme (GGSS).
What is the Green Gas Support Scheme (GGSS)?
The Green Gas Support Scheme (GGSS) is a government environmental scheme that provides financial incentives for new anaerobic digestion biomethane plants to increase the proportion of green gas in the gas grid.
The scheme is open to applicants in England, Scotland and Wales for four years from 30 November 2021.
Registered participants will receive quarterly payments over a period of 15 years. Payments are based on the amount of eligible biomethane that a participant injects into the gas grid.
What will it cost consumers?
The first levy payment will be collected during the Q1 FY 22/23 (April to June 2022) by suppliers.
The government has published the first two levy rates for the Green Gas Levy. It will initially be applied at meter supply point level and will affect all supplies including domestic, although this will be reviewed once the levy is underway.
The initial rate of 0.484p per meter per day applies from 30th November 2021 to 31st March 2022, and the second rate of 0.576p per meter per day applies from 1st April 2022 to 31st March 2023.
For subsequent scheme years – 2023/2024 onwards – BEIS will announce the levy rate by 31 December in the preceding year.
Exemptions are available to suppliers whose total gas supply for the duration of a scheme year comprises at least 95% certified biomethane. Suppliers seeking this exemption must prove their biomethane supply levels using retired green gas certificates.
All businesses should be aware that from 2022, this levy will be included in their bills – presumably bundled with other non-commodity costs and not billed as a separate line item.
For more information on the Green Gas Levy rates, please visit the Government website.
If you are concerned about how this additional levy might impact your gas budget, please contact wayne.brown@inspiredenergy.co.uk for support and guidance on the latest movements in energy pricing and taxes, plus any available opportunities to offset any cost increases.
If you are eligible, you may also qualify for levy exemption.