Nature knows no waste. Falling leaves decompose, enriching the soil in which trees and other plants grow. Nutrients are recycled as the energy of the sun combines water and CO2 to create biomass. Volatile organic compounds from the canopy seed the rain that waters the forest. The natural world is full of cycles supporting the diversity of life. Conversely, industrial societies are full of processes that lead, quite literally, to dead ends.

Approximately 7 million tonnes of food waste are sent to landfill in the UK every year (this figure is on top of commercial/industrial waste and agricultural wastes). But there is no need for this to happen at all because anaerobic digestion (AD) processes, which mimic the services of the natural world – recycling waste into energy and fertilisers to help sustain life – are now widely available.

Energy security is becoming of increasing concern as coal-fired power stations are decommissioned, and yet, despite the fact that there are over 200 AD plants already operating in the UK, media attention is focused almost solely on wind, solar and marine energy, with little or no awareness of AD.

Unlike other technologies, as well as generating renewable energy and producing organic fertilisers for agriculture, AD solves a number of additional environmental challenges and problems, including the declining availability of suitable landfill space and the unhelpful generation of methane from organic waste that has been dumped in landfill – a pollutant that is 23 times more potent than CO2 as a greenhouse gas.

So, what exactly is AD? What contribution can it make to targets for renewables, and what is the future of the AD industry?

First of all, AD is a treatment process that breaks down organic material in the absence of oxygen. It has been used in the UK to process sewage sludge for over 100 years, but its potential for processing food and farm wastes is only now being recognised.

AD produces biogas, which can be used in three ways: to generate electricity; to be fed directly into the gas grid; or to be compressed for use as a transport fuel (as it is widely used in Sweden).

AD produces energy all day and all night, regardless of weather conditions, and, unlike electricity, the biogas it produces can be stored. AD overcomes the inherent problem of wind and solar being intermittent and thus requiring backup generating capacity from conventional power stations – a requirement that undermines the economic rationale of building the renewables capacity in the first place.

Apart from biogas, the only by-product of the AD process is a nutrient-rich organic fertiliser that can be applied to agricultural land to replace the more energy-intensive artificial fertilisers, currently responsible for over 1% of the UK’s total emissions of CO2. Depending on the feedstock and retention periods within the plant, digestate contains nitrogen and organic compounds including potash. AD therefore contributes to the sustainability of the economy as a whole, and agriculture in particular.

The UK government has now committed to the following targets in the field of energy, waste and climate change:

• The EU Renewables Directive states that 15% of UK consumer energy (not just electricity) must be derived from renewables by 2020.

• The EU Landfill Directive states that biodegradable waste must be reduced to 35% of its 1995 level by 2020.

• The EU Waste Framework Directive states that 50% of household waste in the UK must be recycled by 2020.

• The Climate Change Act states that greenhouse-gas emissions must be reduced by 80% from 1990 levels by 2050.

There are currently 220 AD plants in the UK generating 1.3TWh (terawatt hours) of electricity – enough to power 300,000 homes. This is already four times the power produced by the solar industry last year (2012) – but it is only a fraction of the potential of the AD industry in the UK. Germany, for example, has 7,500 AD plants generating 20TWh. The German model is largely based on small-scale farm-based plants using forage maize and other purpose-grown bioenergy crops as feedstock.

In 2010, the British government pledged to “introduce measures to promote a huge increase in energy from waste through anaerobic digestion”. However, even AD is not immune from overall budgetary constraints, and the government’s direct assistance to the industry has been limited to a £10 million loan fund administered by the Waste Reduction Action Plan (WRAP) – equivalent to the cost of building one 2MW (megawatt) plant processing 30,000 tonnes of waste and supplying electricity to 4,000 homes. That addresses less than 0.5% of the estimated 7 million tonnes of food waste sent to landfill in the UK every year.

Indirect support for the industry comes from premium prices that energy supply companies are forced to pay for all forms of renewable energy via Feed-in Tariffs (FITs) and Renewable Obligations Certificates (ROCs), and AD qualifies for the highest band of pricing, equivalent to offshore wind. However, incentives will largely remain on the shelf, unused, unless financing becomes available via the banking system – something that has hitherto been lacking. Hopefully, the government’s new Funding for Lending programme will encourage banks to more enthusiastically support AD and thus enable it to achieve its full potential.

The Landfill Tax (currently £64 per tonne and escalating at a rate of £8 per annum) is designed to make it prohibitively expensive to place waste, including organic material, in the ground – but only 13% of households in England benefit from separate food-waste collections, compared to 82% in Wales.

The only alternatives to landfill are incineration, composting and AD. Incineration generates electricity, but burning damp food waste is highly inefficient; it produces ash as a by-product without the nutrient-rich base of digestate; it also produces carcinogenic gases and so, not surprisingly, it encounters opposition in the planning process. Composting is a more practical alternative for some wastes, but no electricity is produced and odour can be a problem – especially close to centres of population.

If bank finance does become more readily available (through Funding for Lending), the UK could see a tenfold expansion of AD within the next 8 years, making a significant contribution to food security, energy security and environmental security. The need is undeniable; the technology is proven; the incentives are all in place. AD is a win-win-and-win-again solution whose time has now come.

Hylton Murray-Philipson is a director of Agrivert, a leading recycler of organic wastes, including AD.