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IrBEA welcomes National Biomethane Strategy publication but further market certainty is required

IrBEA welcomes National Biomethane Strategy publication but further market certainty is required
A gas-to-grid injection test site in Ireland where bioCNG is injected into the natural gas grid.

The Irish Bioenergy Association (IrBEA) as the representative voice of the Irish bioenergy industry and biogas/biomethane sectors welcomes the publication of Ireland's National Biomethane Strategy. However, IrBEA strongly highlights that further market certainty is required from the Government to provide the necessary conditions to attract investment and ensure the long-term viability and financial sustainability of the biomethane aka renewable natural gas (RNG) sector.

On May 28, 2024, the Irish Minister for the Environment, Climate and Communications, Eamon Ryan, and the Minister for Agriculture, Food and the Marine, Charlie McConalogue announced the publication of Ireland’s National Biomethane Strategy.

According to a statement, the Irish Government is “committed to supporting the delivery of up to 5.7 TWh of indigenously produced biomethane by 2030.”

The National Biomethane Strategy sets out the necessary policy and regulatory measures, and provides a roadmap, to developing a biomethane industry of scale in Ireland. 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;
  • economics of biomethane; and
  • enabling policy requirements.

Each pillar has been aligned with twenty-five key strategic actions. Each action looks to address the challenges and support the opportunities anaerobic digestion and biomethane production has to offer.

Implementation of the Strategy and delivery of these actions will require concerted action across key Government Departments and agencies to ensure the necessary support and infrastructure are in place to support the biomethane industry.

A newly formed Interdepartmental Biomethane Implementation Group will oversee the implementation of the Strategy, measure its impact, and monitor target delivery. The Implementation Group will report directly to the Heat and Built Environment Taskforce.

An integral part of the Strategy is sustainable production. An early action for delivery will be the development of a Biomethane Sustainability Charter in consultation with policy, industry, and societal stakeholders.

The Charter will support an agri-led biomethane industry, whilst having regard to established goals for the protection and restoration of water, soil, biodiversity, and ecosystem services and protect against any unintended negative consequences.

Further market certainty is required

Responding to the publication, IrBEA says that it “welcomes biomethane strategy publication but further market certainty is required to attract investment.”

The publication of the biomethane strategy is another step forward in the development of the industry in Ireland. The initial feedback from members on the strategy is that further market certainty will be required to attract investment and to make projects fundable and viable. While capital grants and the renewable heat obligation (RHO) are outlined as mechanisms to stimulate a market for biomethane, further details and long-term certainty will be required on these measures to encourage investment, Seán Finan, IrBEA CEO said.

IrBEA members in their response to the initial consultation on the draft strategy indicated their concerns regarding capital grants driving up development costs and favoured an ongoing operational support mechanism.  It’s disappointing this has not been considered, explored, or referenced in the strategy. Ongoing operational support has been the funding mechanism of choice used in many developing and established European biomethane markets including Denmark which is broadly lauded as a best practice example. Given the cost of feedstock and ongoing feeding requirements of a biomethane system, the fundamental question of AD plant economic viability exists. A capital grant alone or with an obligation will not eliminate this viability challenge, Seán Finan said.

Lacks details on renewable heat obligation

The strategy commits to the introduction of a renewable heat obligation (RHO) in the heat sector in 2024 which will incentivize suppliers of fossil fuels used for heat, to ensure a proportion of the energy they supply is renewable.

Until the details of this obligation are finalised it is not possible to determine if it will constitute an adequate market stimulant.

We welcome the commitment to introduce the RHO. The RHO introduction has been talked about for years. Why the delay? Why are the main design components not included in the biomethane strategy to give the market confidence that it can deliver? The obligation threshold level, the percentage obligation by 2030, the types of renewable fuels allowed to fulfill the obligation, and the buyout rate are all critical components that require particular attention in the design for a successful obligation scheme to deliver. The industry awaits these details to give the certainty that it will deliver as envisaged, remarked Seán Finan.

Digestate presents a considerable opportunity

The biomethane strategy correctly identifies that one of the by-products of anaerobic digestion is digestate, which can serve as an alternative to chemical fertilizers, thus reducing the need for synthetic fertilizers in agriculture.

Digestate presents a considerable opportunity for Ireland. However, the strategy fails to acknowledge in either the text or actions to deliver, the regulatory challenge posed by the Nitrates Directive and the 170kg/N/Hectare limit in replacing inorganic chemical fertilizer with organic digestate despite this issue being flagged in our consultation response on behalf of members, commented Seán Finan.

Other IrBEA feedback on the biomethane strategy includes:

  • The strategy does not identify the strategic risks associated with imported fuels including biomethane (fuel or certificates) or Hydrotreated Vegetable Oil (HVO)  and its traceability, as a cheaper drop in fuel, on the development of the Irish biomethane industry.
  • Minister Ryan’s statement in his foreword suggests a considerable reduction in gas usage by the mid-2030s, “as we shift our economy away from gas in favour of electrification”. The substantial reduction in dependence is unrealistic given the dependence of the energy system on gas and the need to balance growing intermittent electricity generation by wind and solar with dispatchable generation. Domestic and industrial heating will, through inertia, not deliver the considerable gas dependence reduction suggested with current policy.
  • IrBEA welcomes the strategies recognition that different sizes and scales of AD plants will be required in Ireland to deliver the target including a mix of Scenario 1 ‘Widespread Deployment’ (farm scale) and Scenario 3 ‘Economic Deployment’ (large scale).
  • IrBEA welcomes the recognition of existing Anaerobic Digestion (AD) plants currently operating to produce biogas and that they will be eligible for capital support to upgrade their facilities to produce biomethane and other biobased products, along with new AD plants.
  • IrBEA welcomes the opportunity and potential for biogas that is transported directly to users and that the Biomethane Implementation Group, GNI, and SEAI will determine the best method for certifying this biomethane that is directly transported to end users from biomethane developments.
  • IrBEA states that the Biomethane Sustainability Charter must be developed by active and meaningful engagement through meetings and structured dialogue with the industry and not just an online consultation without engagement.
  • IrBEA is concerned that the industry or its representatives are not recognized as stakeholders in any of the measures for delivering the National Biomethane Strategy. How will the industry feed into the implementation group, the biomethane charter, or any of the other actions? How will the Biomethane Implementation Group interact with industry (plant operators and developers) and IrBEA as their representative body?

The strategy is another step toward the mobilization of the biomethane industry. We must move quickly towards implementation to deliver on the ambition and targets set out by the Government, concluded Seán Finan.

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