AD plant operators challenge business rates hike

A huge hike in business rates for anaerobic digester plants in England and Wales is being challenged by a growing number of operators and farmers.

In the past 10 years business rates paid by some AD plant operators have seen a tenfold increase.

The Valuation Office Agency (VOA), which sets rateable values in England and Wales, last week published its draft 2023 rating list.

It sets out another hike of about 30% for many in the renewables sector with effect from April.

Chris Handel, a chartered surveyor and renewables business rates specialist, said the latest hike would hit profits and could deter would-be investors.

He suggested typical rates for an on-farm digester with a moderate output of about 500kW could be £45,000 a year from April – about four to five times higher than it was five years ago.

Large-scale plants could pay up to £200,000 a year as a result of the review, while the very largest would attract annual rates of £500,000-£750,000.

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Business rates are already one of the major costs faced by operators. As well as being a disincentive to new entrants, the rise in rates could also rule out vital maintenance and upgrades, with the worst-hit businesses potentially forced to quit, said Mr Handel.

This comes at a time when government policy is supposedly encouraging renewable energy and technology that cuts greenhouse gas emissions.

Legal challenge

AD operators are mounting a challenge, led by Mr Handel. To date 22 farmers and plant owners have joined forces over the past 18 months to press the VOA to change the way AD business rates are calculated.

The challenge is well advanced and covers both electrical and gas-to-grid plants. Mr Handel urged anyone concerned about the rates to consider joining the class action.

“The more people air their voices, the stronger the case becomes,” he said. The VOA’s approach to the rates valuations does not properly reflect the operational differences between AD plants and other renewable energy technologies, said Mr Handel.

Biodigesters require continual management input and trained staff to keep them running night and day, unlike solar and wind farms, which in comparison require minimal attention and labour input, he said.

Tenfold rate rise

One of the farmers taking part in the action is Jim Pace who has two AD plants at St Nicholas Court Farm, St Nicholas At Wade, in Kent. The farm has gone beyond carbon neutral and is targeting carbon negative operations, said Mr Pace.

The two maize-fed digesters provide gas to the grid at up to 450 cubic metres an hour and 720 cubic metres an hour.

The farm has also invested heavily in carbon dioxide recovery on one plant and supplies about 4% of the UK’s requirement. This is used to carbonate drinks or is mixed with other products to form a durable aggregate and lock up the carbon dioxide permanently, said Mr Pace.

Meanwhile, digestate from the plant is used to grow crops, further cutting carbon footprint.

“We have taken seriously the government’s drive to tackle emissions, but the recent rate hike will seriously affect profit levels,” Mr Pace said.

One of his plants had a rateable value at commissioning in 2015 of £45,000 a year. Next April’s value for that plant has been set at £480,000.

Combined, both plants will have a rateable value of about £810,000 a year. Of this, the business will pay just over 50p in the pound or about £410,000 a year.

Mr Pace said the rateable value had been calculated without recognising the huge risk and management input required to run plants efficiently.

His AD plants are operated 24 hours a day, seven days a week by an expert team of eight full-time workers, led by manager Iain Moss.

The plants need feeding throughout the night and all day to keep them running. Breakdowns are a constant risk and must be addressed quickly when they arise.

“We are calling on the VOA to understand the work required, along with contributions to the environment and the rural economy and look again at rateable values for UK AD plants,” said Mr Pace.

Get involved

AD operators interested in joining the class action can contact Handel Rating Consultancy by email at, or by calling 07985 813859.

Are you, like many other farms, missing out on tax claims for R&D?

If you’re a limited company, you could be eligible for tax credits if you’re carrying out R&D on your farm. For more information and to find out if you’re eligible visit our R&D tax credits page.

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