Biomethane transport fuels company CNG Services has said the renewable heat incentive would allow "green gas" to be used to fuel commercial vehicles.
The renewable energy industry has welcomed government plans to bring in feed-in tariffs for green power and heat - but has called for a clear timetable for their introduction.
Separate tariff schemes are being developed to promote small scale electricity generation and to incentivise the use of renewable fuels in producing heat (see this New Energy Focus story).
The renewable energy sector's trade association, the Renewable Energy Association, said today that the proposals being included within the Energy Bill are "vague" and that no timetable is given within the legislation.
The REA, which has been lobbying for some time to get a feed-in tariff to promote both small scale renewable electricity and heat, said there was enthusiasm among its members for the government's decision to adopt the measures.
Philip Wolfe, director general of the REA, said: "The REA has repeatedly called for the introduction of a tariff and we are delighted that government has recognised that this incentive will encourage new groups of players into the market. We also welcome the recognition of the urgent need to support renewable heat and biogas. Heat represents the biggest energy use in the UK, and had previously been ignored by policy-makers.
"However the amendments it has tabled are very vague and the lack of any firm timetable shows that there's still a long way to go," Mr Wolfe added.
The wind industry's trade association, the British Wind Energy Association, also welcomed the feed-in tariff amendment, but expressed concern regarding the 3MW cap included within the legislation.
This cap means that projects above a 3MW size would receive support through the Renewables Obligation, with smaller projects rewarded with the feed-in tariff. However, the government could set a lower cap through secondary legislation as it finalises the details of the feed-in tariffs.
Jennifer Webber, public affairs manager at BWEA, told New Energy Focus today: "We are delighted to see that the Secretary of State has tabled this amendment as we have been calling for it for some time. However we do feel that the threshold of 3MW is too high, and we are concerned that it could interfere with the function of the Renewables Obligation. We would like to see the threshold lowered to 250-300kW."
The biogas sector has welcomed the proposed renewable heat incentive, suggesting the move was "potentially significant".
Biogas companies believe the incentive will offer an alternative to the current Renewables Obligation, which pushes plants like anaerobic digesters to generate electricity by burning biomethane - wasting the heat produced in the power generation.