Out-Law Analysis 5 min. read

Biomethane strategy to help Ireland decarbonise and become less import-dependent

The development of a new biomethane strategy is an important step towards decarbonising Ireland’s energy production and strengthening its energy security.

Biomethane is biogas that has been upgraded and which is capable of injection and use in the national gas grid. Biogas refers to gas produced at source at an anaerobic digestion (AD) plant.

A consultation on a new draft biomethane strategy was opened by the Department of the Environment, Climate and Communications (DECC) on 30 January for a period of four weeks and closes on 27 February. It sets out a series of measures designed to underpin the Irish government’s ambition of supplying 5.7 TWh of biogenic methane by 2030 and aligns with actions provided for in its most recent climate action plan. The target represents 10% of Ireland’s expected natural gas production by 2030 and requires rapid development of a new AD plant network.

The consultation is positioned in the context of Ireland’s current dependency on the UK for gas imports – approximately 80% of the gas Ireland uses is imported via gas pipelines originating in Scotland. Biomethane is seen as a sustainable source of replacement indigenous gas and is a compelling solution based on reducing agricultural emissions and other grounds.

It is estimated that 65% of gas in the Irish system is used in power generation. Energy production going forward will require a blend of energy sources as some processes and industries are not capable of being electrified, including the high heat, drying and pharmaceutical industries. 

Moreover, the REPowerEU plan, published by the European Commission in May 2022, allocated €37 billion of investment to support development “to accommodate biomethane into the gas grid and create energy communities”.

Although the consultation paper sets out several strong themes and “statements of intent”, there is relatively limited detail on delivery of those themes. Biomethane production offers Ireland a scalable opportunity due to its reliable and sufficient feedstock supply (158-page / 2.2MB PDF),  and the development of a robust national biomethane strategy is the first step in developing an indigenous biomethane industry of scale.

Similar to the wind and solar industries, DECC encourages the engagement of the farming and agricultural community in the development of Ireland’s biomethane industry and states the national biomethane strategy will be “agri-led and farmer centric”. A significant portion of its consultation details the potential benefits of developing a biomethane industry in Ireland. Akin to wind turbines and solar panels, biomethane could offer additional income streams to the farming and agricultural industry. In addition, a successful biomethane strategy will also facilitate a reduction in slurry-related farm run off pollution.

In its consultation paper, DECC acknowledged that biomethane gas is more expensive to produce than natural gas; and that government support and subsidies will be needed to seed and develop the industry. While it highlights that the amount of support required would depend on the size and type of AD plant, it doesn’t detail what these supports will look like. Respondents to the consultation are asked to consider what type of support is needed – capital grants, feedstock support, or ongoing operational support.

The consultation sets out three possible scenarios for an Irish biomethane industry, without recommending one over the other at this stage. The first envisages widespread deployment – circa 250 smaller, farm-scale AD plants with annual feedstock requirements of 25,000t. The second envisages implementation of current policies only – development of 90 larger AD plants with feedstock requirements from 40,000 – 60,000t. The third is framed as economic deployment, which would consist of a mix of 140 small and large plants with feedstock requirements of 25,000t – 60,000t. The third scenario is seen by the government as the most cost-efficient but would have less involvement from the farming industry; the second scenario is unlikely to deliver the 2030 targets; and the first scenario 1 would involve the greatest farming involvement but would be the most expensive and would also be unlikely to reach 2030 targets.

With Ireland’s temperate climate, it is well positioned to produce high quantities of grass and forages. Accordingly, DECC identifies “green biorefining” as a key enabling technology for agri-led biomethane expansion and sustainable development. Green biorefineries process bio-materials, such as grass, silage and animal litter, and filter out certain valuable compounds from these bio-materials. Under the consultation, it is proposed that if biorefineries are co-located with AD plants, that the biorefineries could process the bio-materials first to extract the valuable compounds, and once this is complete the residual material and by-products could be used for certain AD processes. As Ireland is well positioned to develop such green biorefineries due to its high proportion of permanent grassland, the government aims to invest up to €30 million in biorefinery piloting facilities over the next two to three years.

DECC recognises that the industry has been troubled by lengthy timelines as well as inconsistent decisions of local authorities. Such planning issues are to be dealt with through the development of a standardised code of practice for local authorities to use when assessing a planning application for an AD plant. However, no timeline for publishing this code is included in the consultation. In an effort to reduce overall development times and delays, DECC proposes to set up an online portal processing exact requirements for a project, depending on scale, feedstock type and tonnages.

Under the proposal, AD plants will also be required to obtain applicable consents, waste permits or industrial emissions license as issued by the local authority or the Environmental Protection Agency (EPA). The consenting processes will inevitably carry time, capital, and resources costs. Similarly, the local authority and the EPA will also need to be adequately resourced.

To optimise gas grid connections, DECC proposes a review of the status of contestable works eligible to be carried out by developers. Contestable grid connections enable a developer to lead and carry out construction works, with Gas Networks Ireland (GNI) responsible for the final connection to the grid. DECC said that this approach would increase competition and lead to lower grid connection costs. Under GNI current connection policy, biomethane producers pay an initial 30% contribution of the estimated connection costs, with the remaining 70% supported by a financial bond as security to GNI.

Overall, publication of the draft biomethane strategy is a welcome move by the government as it sets out a high-level overview of the proposed roadmap for biomethane production in Ireland. However, further clarity is required on the form and type of government supports that will be offered – these are needed to underpin the delivery of the biomethane targets. Industry and other stakeholders should take the opportunity to engage with the consultation before it closes. and stakeholder feedback is welcomed.

Co-written by Shani Stallard and Isabel Humburg of Pinsent Masons. Pinsent Masons is holding an event at its Dublin office on Wednesday 13 March 2024 at which expert industry speakers and Pinsent Masons lawyers will discuss the role for biogas in greening Irish power baseload and providing energy security. Registration is open – the event is free to attend.

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