Green Gas Support Scheme (GGSS): Annual Tariff Review 2025
Updated 28 August 2025
Applies to England, Scotland and Wales
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This publication is available at https://www.gov.uk/government/publications/green-gas-support-scheme-ggss-annual-tariff-reviews-and-tariff-change-notices/green-gas-support-scheme-ggss-annual-tariff-review-2025
Overview
Tariffs and degression thresholds remain unchanged
The Green Gas Support Scheme Regulations 2021 allow the Secretary of State to review and change GGSS tariffs and tariff degression thresholds annually while the scheme is open to applications. The outcome of the review must be announced by 1 September and, if applicable, changes then come into force from 1 October. The Annual Tariff Review (ATR) publishes and explains the decisions.
Following the review of tariffs and thresholds, the Secretary of State has decided that GGSS tariffs and degression thresholds will remain unchanged on 1 October 2025.
By reviewing GGSS tariffs annually, we aim to ensure that tariff payments continue to incentivise deployment under the GGSS, whilst ensuring value for money for the billpayer. Tariff rates that are too high would overcompensate producers while rates that are too low could decrease deployment or lower the quality of equipment and feedstocks used, leading to lower carbon savings. Tariff rate degression can be triggered if forecasted spend exceeds the scheme’s Expenditure Threshold for a quarter. This could occur if there is an unexpected spike in applications signalling potential over-compensation.
The principles and timetable for the ATR are laid out further on the GGSS Budget Management guidance page.
Tariffs from 1 October 2025
GGSS tariffs will remain unchanged on 1 October 2025. These are:
- Tier 1: Up to 60,000 MWh per year – 6.86p/kWh
- Tier 2: the next 40,000 MWh per year – 4.26p/kWh
- Tier 3: above 100,000 MWh up to 250,000 MWh per year – 3.98p/kWh
The review found that these tariffs are effective in providing revenues which incentivise plant development whilst providing value for money.
GGSS tariffs are uprated for inflation every year on 1 April, using the percentage increase or decrease in the Consumer Price Index (CPI) of the previous calendar year. New, uprated tariffs will be published here by Ofgem by 1 April 2026.
On 1 September each year, the date of the publication of the ATR, we also publish the GGSS’s quarterly Expenditure Forecast Statement (EFS) for the quarter ending 31 July, which is available from the Green Gas Support Scheme (GGSS): expenditure forecast statements and tariff change notices page. EFSs measure potential future scheme spend against degression thresholds and can, for other quarters, trigger a tariff degression. This quarter, however, the ATR takes precedence for setting tariff levels and a tariff degression cannot be triggered. The EFS is provided for transparency only.
Degression thresholds from 1 October 2025
The GGSS degression thresholds will remain unchanged on 1 October 2025. The review found that the existing degression thresholds are set at an appropriate level. They should only be reached if there are considerable unexpected spikes in applications, signalling potential over-compensation.
We publish degression thresholds, along with detailed information on the degression assessment process, on the GGSS Budget Management page. We have reproduced it below in Table 1 for clarity.
Table 1: GGSS Expenditure Degression Thresholds
| Assessment Date | Expenditure threshold figures (£m) |
|---|---|
| 31/07/2023 | 139.90 |
| 31/10/2023 | 152.89 |
| 31/01/2024 | 166.00 |
| 30/04/2024 | 179.43 |
| 31/07/2024 | 193.33 |
| 31/10/2024 | 207.36 |
| 31/01/2025 | 223.71 |
| 30/04/2025 | 240.05 |
| 31/07/2025 | 256.40 |
| 31/10/2025 | 272.74 |
| 31/01/2026 | 289.09 |
| 30/04/2026 | 305.43 |
| 31/07/2026 | 321.78 |
| 31/10/2026 | 338.13 |
| 31/01/2027 | 339.42 |
| 30/04/2027 | 340.79 |
| 31/07/2027 | 342.33 |
| 31/10/2027 | 343.91 |
| 31/01/2028 | 345.51 |
Process of reviewing tariffs and degression thresholds
The annual review of GGSS tariffs and degression thresholds involves a re-running of the tariff-setting model and processes, as well as an evaluation of whether degression thresholds are set at an appropriate level to be triggered in case of a spike in applications.
The tariff-setting process is centred around a model for a reference biomethane anaerobic digestion (AD) plant. The model calculates the tariff rate for the reference plant given a range of different rates of return, costs, revenues, and macroeconomic forecast input levels. Further details of the tariff-setting methodology can be found in the GGSS final stage Impact Assessment.
DESNZ also undertakes ongoing engagements with industry and investors, which are factored into the review. This year, we reviewed updated AD plant cost data produced by industry experts to inform the review. The process is run using up-to-date macroeconomic forecasts.
The tariff review provides an opportunity to alter tariffs if there are considerable changes to biomethane production and/or cost and revenue factors across the industry. Inflationary impacts on capital and operating costs are factored in through the automatic tariff uprating mechanism conducted each year by Ofgem, separately to the ATR.