With a target to scale biomethane production by 2030, Ireland’s bioenergy moment is coming. But regulatory and investment barriers still need to be addressed before the sector can fulfil its potential.
On biomethane’s potential in Ireland, Prof Jerry Murphy, director of circular economy, energy and environmental engineering, University College Cork, says to look abroad. “Denmark, a country similar in size, population, and significant farm animals, is presently substituting close to 40 per cent of all natural gas with biomethane and is targeting 100 per cent replacement by 2035.”
The EU and Ireland have targets for 10 per cent substitution of natural gas with biomethane by 2030. One of the drivers for this was the war in Ukraine, which led to stress on the supply of natural gas, says Murphy. “Now with the war in Iran, natural gas supplies are again under stress with corresponding rising prices in natural gas for home heating in cities, in electricity – Ireland makes approximately 60 per cent of our electricity from natural gas – and fertiliser, which is also made from natural gas.
“Thus, we can consider biomethane as part of the circular economy, incorporating the proximity principle. Production of indigenous biomethane leads to a secure indigenous supply of natural gas, the cost of which is definite and not dependent on geopolitical considerations, and due to its byproducts, also reduces demand for synthetic fertilisers.”
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The Government’s ultimate policy ambition is to electrify as much as possible. However, we need to focus on transitional measures as well, particularly in hard-to-abate sectors, says Aisling O’Donoghue, partner, energy, infrastructure & natural resources with A&L Goodbody. “In the transport sector, the Renewable Transport Fuel Obligation (RTFO) is driving demand for biofuels.
“The RTFO requires transport fuel suppliers to ensure a proportion of the fuel placed on the market is produced from renewable sources. However, availability, price and certification of biofuels present practical challenges for increased uptake.”
Biomethane is not the only renewable fuel available to us. Biomethane is a natural gas replacement while hydrogenated vegetable oil (HVO) is a diesel replacement, says Murphy. The oil is produced by reacting preferably renewable hydrogen gas with preferably used cooking oils at high temperature and pressure in the presence of a catalyst.
“In the EU and the US, up to twice as much energy is taken from the gas grid as compared to the electricity grid. Much of our food and beverage industries use natural gas to evaporate water off milk powder or alcohols,” says Murphy.
“Oils cannot replace these functions in the short run without major expensive infrastructural changes. HVO is not a gas and cannot be injected into the gas grid for transport and distribution.”
Murphy says he knows the industry will embrace anaerobic digestion if there is a viable business plan. “In other countries, this business case has been created through supportive policy, either in the form of subsidies or mandating the gas or heat market.
“Subsidies can be a monetary support for each unit of gas produced, or a capital grant for long-term storage of slurry to cover the winter months, or a capital grant to help build the anaerobic digester. Mandating can ensure a minimum amount of biomethane sold per annum as a function of natural gas. The problem really is people. If people do not accept anaerobic digestion, then politicians will not support policy that supports such technologies.”
According to the Irish Fiscal Advisory Council, Ireland is heading towards a €21 billion fine in 2030 for not meeting our climate targets, says Murphy. “If we do not provide subsidies to renewable energy technologies in Ireland, we will pay the money in our EU burden-sharing commitments to other EU countries who have met their climate targets.”
Several policy and regulatory efforts are under way, says O’Donoghue. “Critically, to scale biomethane production in Ireland, we need viable and diversified routes to market for project developers. That means long-term offtake contracts with transport fuel suppliers, heat suppliers and industrial customers that help underpin capital investment.
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- As energy security concerns drive urgent demand for renewable gas, Ireland aims to scale biomethane by 2030; but policy, pricing and regulatory barriers must be resolved to unlock its potential, writes Edel Corrigan. Read more.
“The pending Renewable Heat Obligation, which will mandate that heat suppliers decarbonise their fuel sources, is an imperative for developers. Getting this scheme right will be an important investment signal for the market.”
The biomethane sector in Ireland is still in its infancy, offering significant opportunities for investors in renewable gas projects and getting exposure to the Irish market, says O’Donoghue. “A facilitative Renewable Heat Obligation and direct offtake of renewable gas from industrial companies are expected to drive sustained demand.
“We are moving in the right direction; however, our State bodies need a continued, laser focus on permitting, licensing and grid connection if we are to match the success of our European counterparts.”
