The NFU, REA, and other stakeholders had lobbied the Environment Agency for a year to change its position. Under the regulations previously manure and slurry treated in AD plants were considered ‘wastes’. Farmers were required to take out an environmental permit or waste management exemption if they wanted to spread the digestate on their land which meant unnecessary administrative and cost burdens.

Now the digestate will not be considered as ‘waste’ provided it is used as fertiliser on agricultural land in the way undigested manure and slurry would be.

NFU Vice President Paul Temple said the Agency’s decision had removed a strong disincentive to the use of AD digestate and the advancement of AD technology on-farm generally.

He said: "It is great news that the Environment Agency has finally decided to adopt a common sense approach here but the overall situation for on-farm AD is still far from perfect.

"Unfortunately the anaerobic digestion process is still considered to be a waste management process and therefore AD plants will still require an environmental permit or exemption to operate.

"We continue to argue that this is unnecessary in the case of facilities utilising only farm-based inputs such as manures and dedicated crop feedstocks.

"Nevertheless this decision by the Environment Agency removes a significant barrier to the development of small-scale on-farm AD. This should help stimulate greater use of digestates on farm land and hopefully encourage more farmer investment in AD technology.

"Many farmers value digestate material as a soil improver and useful fertiliser substitute at a time of high fertiliser prices and its use needs to be promoted rather than discouraged by unnecessary red tape.

"By providing income from sale of electricity and/or heat, AD plants may help with farm diversification as well as playing a useful role in improved manure management. The NFU has a vision for 1,000 on-farm AD plants by 2020 and we firmly believe AD can add value to the agricultural sector, while demonstrating how farmers can provide part of the solution to the problem of climate change."

David Collins, on behalf of the REA Biogas Group which represents much of the emerging UK industry, said: "We are extremely gratified that the Environment Agency have assisted us in changing this particular rule, which we feel will result in a big expansion of the uptake of AD on farms."