Scaling up production of the green gas biomethane is an obvious lever to deploy in decarbonising Ireland. Clean energy from farm and food wastes is a no-brainer but a new era of Irish biomethane is far from assured.
Early promise has given way to uncertainty, with a dark shadow cast over the renewable fuels marketplace because of cheap imported biofuels that can be fraudulently labelled and which put indigenous producers at a disadvantage.
Biomethane comes with multiple benefits: cutting carbon emissions, replacing natural gas (a fossil fuel), increasing energy security and replacing chemical fertilisers on land – to list but a few. It is generated from farm slurries, food wastes, sewage sludges and crop feedstocks including grass.
So, there was great fanfare following a national biomethane strategy announced last May. It was pitched at big operators (foreign investors and Irish co-ops that dominate the agri-food sector) as well as farmers, the smaller players.
The ambition was to build up to 200 anaerobic digester (AD) plants generating the biogas by 2030. Zero-carbon biomethane could rise to represent 14-20 per cent of total Irish gas demand by 2030 and 62 per cent by 2040. A €40 million biomethane capital grant scheme was rolled out.
Investment ambitions
Total investment in the pipeline is between €1 billion and €3 billion, according to Seán Finan, chief executive, Irish Bioenergy Association (IrBEA).
The Renewable Gas Forum Ireland (RGFI), that represents stakeholders from farmers to developers, acknowledges significant gearing up with plans for an initial 18 AD plants.
Greengate Biogas, planning to produce nearly 1.8 terawatt hours (TWh) of biomethane annually, has embarked on community consultation for its first plant in Powerstown, Co Carlow. It will process cattle and pig slurry, farmyard straw manure and poultry manure into biomethane, biogenic CO2 and fertiliser. The company says it will support local farmers to improve their manure management and create a circular economy by returning degassed agricultural residues to farmland – thereby contributing to a more sustainable Irish agriculture sector.
It plans to process up to 700,000 tonnes of agricultural residues a year to produce approximately 250 gigawatt hours (GWh) of biomethane and capture 30,000 tonnes of biogenic CO2. The biomethane will be injected into the gas network, providing sustainable energy equivalent to meet demand from about 22,700 households.
The European biomethane platform CycleØ Group has committed more than €100 million to developing plants in Limerick, Kildare, Cavan and Galway – each generating 40 GWh, collectively enough energy to heat over 12,000 homes a year.
At the smaller (20 GWh) end, projects such as that being pursued by engineering entrepreneur and beef farmer Brugha Duffy stand out. With business partner Donal Hartford and Carbon AMS, he is planning to build an AD near Duleek, Co Meath. The proposed facility aims to inject biomethane into the grid, to supply biogenic CO2 to consumers, and incorporate a digestate nutrient recovery system.
Meanwhile, Gas Networks Ireland is building a €32 million central grid injection facility in Mitchelstown, Co Cork, with capacity to inject up to 700 GWh of biomethane annually into the gas network, (12 per cent of the Government’s 2030 biomethane target), while cutting emissions by 130,000 tonnes annually.
The combination of big and small ADs is integral to achieving Ireland’s target of 5.7 TWh of indigenously produced methane by the end of the decade. “They not only contribute to energy diversification and rural development but also support the country’s climate action objectives,” says RGFI chief executive PJ McCarthy.
Fraudulent fuels
Two factors have undermined positive sentiment: the absence of a renewable heat obligation (RHO) – requiring biomethane use – to provide greater market certainty, and the dominance of hydrogenated vegetable oil (HVO) and palm oil mill effluent (POME) coming from Indonesia and Malaysia, as well as used cooking oil from China. These trump indigenous biomethane on price despite question marks over their sustainability.
These factors contributed to Green Generation in Co Kildare – a pioneer of biomethane production in Ireland using farm and food wastes – going into receivership recently, according to co-founder Billy Costello and Clonbio, its 50 per cent shareholder.
This outcome for a flagship enterprise, Finan adds, “is very regrettable and highlights the need to urgently address the fundamental issue of fraudulent activity in the non-EU bioliquid supply chain, with this biofuel severely impacting business here.”
Karol Kissane of financial advisory firm IFAC, a member of the Irish Farmers Association energy for farms project team, says that when the rubber hit the road after the strategy launch difficulties emerged. So much so, he cannot see 2030 targets being met, with funding doubts placing a question mark over having a genuine market in place by then.
Specifically, capital fund grants mean plants must be built by the end of 2025 and “do not really cut it” due to the level of risk with contracts. He favours a guaranteed rate, as is paid to wind farm developers through an auction process.
Farmers, companies and big investors are willing with many projects “shovel ready” but as long as a question mark over HVO persists, he fears the outlook may become negative.
Kissane highlights public tenders for HVO supplies issued by State companies such as the OPW, Waterways Ireland, Irish Rail, Bus Éireann and Cork County Council. “If sustainability is at issue, I would worry. There is also risk of lock-in.”
If biomethane is to have any chance, it has to be used in transport, he says.
Oil companies are required to incorporate a percentage of biofuels into their diesel and petrol. The inclusion rate is set by the Department of Transport and the National Oil Reserves Agency.
“Everything was operating relatively okay in 2022, and we were able to sell Irish biomethane to the oil companies to satisfy their obligations,” Costello explains – the price of biodiesel was higher and allowed biomethane to compete. “We sold all our biomethane at 14 cents per kilowatt hour that made the biomethane very viable without any Government support.”
In 2023, the Department decided in effect “to award extra bonus points for HVO”, in the form of tradeable certs. Due to the influx of HVO the price Green Generation received for certs declined. “This kills the biomethane operation in Ireland,” he says.
Costello, who has been involved in AD developments in Germany and the UK, says their difficulties were compounded by State agencies’ failure to buy renewable gas for their operations. This contrasts with Microsoft, he says, which has committed to using the biogas.
His business, employing more than 50 people, owes the Irish Strategic Investment Fund – the State investor – €12 million, secured against its assets. These include its main facility at Nurney and a biogas injection site nearby at Cush – there is speculation that Gas Networks Ireland is considering a bid for the latter.
Germany has stopped using biofuels from Asia while the European Commission has proposed suspending recognition of International Sustainability and Carbon Certification (ISCC) for biofuels from waste. An estimated 95 per cent of these biofuels sold in the Republic are ISCC-certified.
Unexplained surges in the production of fuel from mill effluent and waste cooking oil sparked concerns that suppliers in China and Southeast Asia were processing virgin palm oil for fuel. Palm oil production leads to wide-scale deforestation and consequently, the EU does not deem it a sustainable fuel.
IrBEA has repeatedly highlighted the issue of fraudulent activities in the non-EU biofuel supply chain and the detrimental impact this has on Irish biomethane producers, Finan says.
He highlights “a reluctance by Government and the broader fossil fuel industry to even admit that there is a problem and issue with fraudulent activities in the non-EU biofuel supply chain.”
The Government needs to immediately remove eligibility of fraudulent non-EU biofuels to fulfil compliancy in the EU’s renewable transport fuel obligation (RTFO) and also in the proposed RHO, he says.
He adds: “While we welcome that the Department of Transport has issued notification of commencement of a statutory consultation in relation to exclusion of palm oil mill effluent (POME) from the award of additional RTFO certificates, removing the additional half certificate as proposed only legitimises the fraud.”
Government action
Minister for Energy Darragh O’Brien has said he requested that his officials complete work on the RHO with a view to it going to Cabinet with funding proposals shortly, adding he was going to address the imported biofuels issue, including fraudulently labelled POME.
Costello says merely adjusting certs is not sufficient; they should be withdrawn completely. “Ireland should stop multiple counting of waste oil renewables from outside Europe ... and enforce the law.”
PJ McCarthy of RGFI says the Government must quickly deal with the imported biofuel issue, ensure the consumer is protected and avoid the risk of compliance costs such as fines.
In addition, it must expand funding mechanisms by providing some €1 billion in capital grants, subsidies and low-interest loans to achieve the 2030 biomethane target. This would provide “enduring policy support up to 2050”.
Complementing this, he says, should be streamlining and accelerating planning processes for AD plants, and ensuring “non-contestable gas grid connections for biomethane producers to secure fair market access and economic viability”.
These actions, he adds, would provide a robust indigenous industry while helping to maintain competitiveness and meet climate targets.
This would also facilitate establishing a network of biorefineries supporting sustainable agriculture, using a variety of crops – not merely grass monoculture – and wastes. This helps to address biodiversity, water quality, soil and nitrates issues, McCarthy says, while ensuring “the sector’s carbon footprint is comprehensively dealt with”.
