Ireland’s biomethane strategy to help decarbonise energy generation

The Irish government’s Department of Environment, Climate and Communications (DECC) published the National Biomethane Strategy (51 pages / 676 KB) – a series of measures designed to underpin its ambition of producing 5.76TWh of biomethane in Ireland by 2030, and production of up to 1TWh of biomethane by 2025.

Biogas is typically produced through the anaerobic digestion (AD) of biological feedstocks. This includes food waste, sewage sludge and agricultural feedstocks, for example, animal manure and grass silage. Where biogas is upgraded to methane with greater than 97% purity, it is termed biomethane and can replace fossil gas. Currently, the volume of biomethane injected into the national energy grid is small, equating to c.75GWh per year. This is the equivalent of 0.001% of Ireland’s current gas demand.

The development of the strategy focused on a framework of five interlinking pillars seen as critical to target delivery: sustainability; demand for biomethane; bioeconomy and the circular economy; the economics of biomethane; and any necessary enabling policy requirements.

The strategy identifies sectors where biomethane can bring the biggest decarbonisation benefits, including diversifying opportunities for livestock farmers, reducing emissions from animal waste, biobased fertiliser and replacing chemical fertiliser.

The National Biomethane Assessment Group set out three possible scenarios for an Irish biomethane industry. The first envisages widespread deployment of around 250 smaller, farm-scale plants with annual feedstock requirements of 25,000 tonnes (t). The second envisages implementation of current policies only – the development of 90 larger plants with feedstock requirements from 40,000 to 60,000t. The third is framed as economic deployment, which would consist of a mix of 140 small and large plants.

The third scenario is seen by the government as the most cost-effective but would have less involvement from the farming industry. The second scenario is unlikely to deliver the 2030 targets, and the first would involve the greatest farming involvement but would be most expensive despite being unlikely to deliver the 2030 targets.  

The recently published strategy focuses on a mix of scenario one, widespread deployment, and scenario three, economic deployment.

The strategy outlines a renewable heat obligation which will oblige suppliers of fossil fuel used for heat to ensure at proportion of the energy they supply is renewable, as well as capital grant support, but these have not been published.

The strategy acknowledges that AD plants are expensive projects and depend on different factors such as scale of the plant, feedstock supply, proximity of the plant to the gas grid, and financing. Additionally, there is a full relief from the carbon component of mineral oil tax for liquid or gaseous fuels that have been produced from biomass. This means that no carbon tax applies to biofuels, such as hydrogenated vegetable oil or biomethane, used in any road vehicle, private or commercial.

The carbon tax relief for biofuels is intended to promote a higher level of biofuel usage and supports the Irish government’s commitment to incentivising more environmentally friendly alternatives to fossil fuels.

DECC recognises that the industry has been troubled by lengthy timelines as well as inconsistent decisions by local authorities. It is envisaged that both (a) AD plants in operation upgrading biomethane production and (b) new plant builds with full planning and permitting permissions would each be eligible for monetary support.

In the consultation on the biomethane strategy, planning issues were going to be dealt with through the development of a standard code of practice for local authorities to use when assessing a planning application for an AD plant. However, this was omitted from the published strategy. Instead, plants will be required to obtain applicable consents, waste permits or industrial emissions licenses as issued by the local authority or the Environmental Protection Agency (EPA). They will need to be adequately resourced.

Under the current connections policy for biomethane, the customer contributes to the cost of connection in two ways. One, a standard contribution of 30% of the estimated costs for the connection assets, and two, an additional ‘economic test’ contribution to provide for any shortfall in the costs of the connection not recovered through attributable tariff payments.

There is currently a need for developers to have a financial bond in place for the other 70% of the connection cost. The strategy has stated that this process will be reviewed. Any reduction in the cost of connecting AD plants to the grid should result in a pass down decrease in the cost for the bond requirements and the final price of biomethane.