Industry has welcomed the government's introduction this week of a new clause in the energy bill which will provide incentives for natural methane capture and biogas projects designed to produce renewable energy.

The move increases existing support for renewable methane projects, which produce or capture methane from landfill sites, sewage and slurry, or anaerobic digestor technologies, and aims to make it easier to connect the resulting biogas grid.

Under the new amendment, renewable gas producers will be able to add the methane to the gas grid and will receive government subsidies for that process, according to gas consultancy CNGS Services.

"At the moment the UK is the biggest producer of biogas in Europe," said CNG's managing director, John Baldwin. "By 2020, I hope that the UK government will have implemented a target, in the same way the Dutch and German governments have a target, so that 10 per cent of the gas that is burned is renewable."

According to Baldwin, it is important that the government gets behind renewable or biogas production because North Sea reserves of natural gas are decreasing and by 2020, the UK's use of indigenous suppliers could drop to about 30 per cent compared with 70 per cent imported gas. But with backing for renewable gas, the figures could change to 30 per cent use of indigenous fossil gas, 10 per cent from renewables and 60 per cent from imports, Baldwin claims.

Currently, generators of electricity from renewable sources receive a Renewable Obligation Certificate (ROC) for every megawatt produced. From next April, electricity created from natural methane will be credited with two ROCs for every megawatt – equivalent to about £100.

CNG and other members of the Renewable Energy Association hope that the amendments to the energy bill announced this week will also provide incentives – equivalent to two ROCs – rewarding electricity producers for the waste heat that is generated from burning renewable gas.

Renewable gas is only about 30 per cent efficient and a lot of heat is wasted, but by adding the gas to the grid, backers of the technology believe that the wasted energy can be more efficiently harnessed.

The increased support for renewable methane follows reports released this week that levels of natural methane in the atmosphere have increased dramatically over the past 12 months. According to scientists from MIT, the rise in 2007 was about 10 parts per billion over the course of a year.

The rise is being put down to a decline in the amounts of a compound called hydroxyl free radical, which naturally breaks up methane in the atmosphere. Methane is a greenhouse gas which is many times more effective than carbon at blocking in heat.

Commenting on the rise, CNG's Baldwin said that one way to combat the rise of natural methane is to make sure more waste is used to create renewable gas that can be harnessed and burned, rather than allowing it to generate natural methane.