Farmers can now obtain funding to develop small anaerobic digestion plants, following prolonged lobbying by the NFU.
The fund, to be administered by the recycling and waste organisation WRAP, will be available to farms that have access to slurries or manures, and who wish to build AD plants producing up to 250kW of power.
NFU chief renewables and climate change adviser Dr Jonathan Scurlock said: “The announcement fulfils one of the actions called for by a coalition of trade associations including the NFU in the present AD Strategy, and we are delighted that Defra has finally listened to us and delivered on a key policy measure.
“The on-farm AD loan fund and the immediate offer of grants for project development will help encourage growth in the industry by giving access to finances that otherwise would not have been possible.”
The fund will be rolled out in two phases.
Business plan development grants of up to £10,000 are available now for farmers to investigate the economic and environmental potential. Stage two, to start in the New Year, will see capital loans available of up to £400,000 or a maximum of 50% of the project cost.
The technology will save farmers money on energy costs and could even boost their income if they export electricity or heat energy.
They will still be entitled to government incentives for producing renewable energy. Small-scale on-farm AD plants are also most likely to deliver positive environmental outcomes such as improved manure management and nutrient management, and reduction of greenhouse gas emissions such as methane from uncovered slurry stores.