At the time of this article’s publication, the general election is just a day away. By the time you read this, we may already know the shape of the next Government. Last week, I explored the steps needed to realise the opportunities in renewable electricity on farms.
This week, I turn my attention to Ireland’s emerging biomethane sector.
Among renewable energy technologies, none is as closely intertwined with agriculture as anaerobic digestion (AD). In many parts of Europe, it is considered an extension of the agricultural sector.
The Republic of Ireland was unique, in that we essentially didn’t have an AD sector, but rather a few one-off plants from a legacy electricity scheme. In other words, we had an absolute blank canvas to build a new industry, one with farmers centrally involved.
While some may argue that that is what has been achieved over the term of the last Government, others disagree and ask if it’s too late to change the direction of this sector. This article will focus on the key challenges facing the next Government as the AD industry struggles to get off the ground.
The challenge
For many years, there remained ambiguity over which Government department owned AD. This changed last year after the launch of the National Biomethane Strategy, a joint effort across multiple departments, led by both the Department of Agriculture and the Department of the Environment, Climate and Communications. The strategy was intended to be the roadmap to how the Government was going to facilitate the construction of up to 200 new, large-scale ‘agri-centric’ AD plants, meeting its 2030 target.
Ireland’s chosen structure
The ministers were clear that they wanted the AD industry to be agri-centric, with farmers owning, suppling and operating the new network of plants.
An average-sized AD plant for Ireland would produce around 40 gigawatt-hours (GWh) of biomethane gas annually, enough to heat around 6,000 homes.
A plant of this size would require about 2,000 acres of grass silage and up to 30,000 tonnes of slurry per year. Some plants may incorporate waste and other organic sources into their feedstock mix, however. The plant would cost around €15m to build. A target to develop 200 of these across the country was hugely ambitious, and the strong statement of intent caught the eyes of many international developers and funds.
Unique
The Government chose a unique method of supporting the industry, however. Rather than copy what most other European countries did and introduce a long-term support scheme, it instead opted to introduce capital grants in an attempt to reduce the cost of building AD plants and ultimately the price developers need for biomethane.
Biomethane is around three to four times more expensive than wholesale natural gas.
They will then introduce a new renewable heat obligation (RHO), forcing suppliers of natural gas to buy and blend biomethane into their fuel mix or face fines. This means the cost of the expensive natural gas would be spread across the entire customer base of that supplier, stimulating the market for biomethane. A bold plan, one that hasn’t been tried anywhere else in the world to get a new AD industry off the ground.
Estimates by industry bodies suggested that achieving the 2030 target will require over €1bn in State support. However, the Government committed €40m, covering only 20% of the costs for a small number of projects that have already secured planning permission.
Farmers will have access to plenty of digestate in the near future.
The RHO, first proposed in 2021, has faced multiple delays and is now not expected to go live until 2025. No details of the obligation have been announced but will likely come too late for many of the 18 projects which secured capital grant aid. It is likely that many won’t go ahead without the RHO in place as, currently, no market structure exists.
Business model
On the face of it, we now have a clearer idea of how this industry will work.
A small amount of capital grant aid towards the build cost of large-scale AD plants and a legal mandate to force users of natural gas to buy expensive biomethane will soon kick in, creating a long-term market.
But even with this clarity, developing a plant in Ireland will be difficult and will require heavy amounts of capital. This explains, in part, why Ireland has seen an influx of developers backed by international investment funds entering the sector, progressing with planning applications for large-scale plants.
Where do farmers fit in?
So where do farmers fit in this agri-centric business model? Most farmers will only be feedstock suppliers and digestate users, with the prospect of owning and operating an AD plant effectively off the table. Despite comments by Minister Ryan, building AD plants in Ireland is far beyond the reach of the vast majority of farmers. Some argue that this is a consequence of an industry designed for farmers not to be in the driving seat.
Too late for a U-turn?
Considering the glacial pace at which it took our Government to progress this far – and the fact that 2030 is rapidly approaching – a major U-turn now, while necessary, would almost certainly result in no new AD plants being commissioned until the end of the decade.
Don’t get me wrong, there is nothing inherently wrong with international investment. In fact, without it, Ireland wouldn’t stand a chance of meeting any of its 2030 renewable energy targets. However, it comes with a downside: the profits generated are often sent overseas.
As we are spending – and will continue to spend – billions on renewable energy to power our homes, businesses and farms, why can’t we steer policy so that farmers can be in the driving seat?
The answer is yes we can with a bespoke, farmer-level AD scheme that operates separately from the large-scale projects being developed across the country. The biomethane strategy includes a commitment to exploring such options, but more than exploration is needed.
Farmers currently have no idea how much they will be paid for grass silage or forage.
Concrete mechanisms must be developed to allow farmers to build small, on-farm biomethane AD plants. These plants could serve as tools for managing nutrients while also diversifying farm incomes.
The simplest approach would be to introduce a support scheme and grant aid specifically designed for farmer-led projects, with higher funding thresholds for smaller plants – say, those producing below 20 GWh.
Farmers should also have the flexibility to choose between biomethane production or electricity generation. In some cases, small-scale biogas electricity plants, like those developed in the IrBEA demonstration project, work exceptionally well on the right farm.
Nitrates
One of the biggest challenges facing the AD sector is that dairy farmers operating under derogation can export their slurry to a plant but are not permitted to take back digestate.
While efforts are under way in Europe to address this issue, it is crucial for our next Minister for Agriculture to advocate for this. They should champion this cause with the same determination they apply to defending the retention of the derogation.
Animal by-product rules
The requirement to pasteurise digestate urgently needs to be reconsidered, as it increases the running cost of plants significantly, ultimately making the produced gas more expensive. In cases where a plant processes slurry sourced from other farms, many EU countries do not mandate pasteurisation. However, in Ireland, it remains a strict requirement.
If waste is included in the feedstock mix, the necessity of pasteurisation is understandable and justified. However, under the Government’s proposed model of using only grass and slurry, pasteurisation should not be mandatory.
The National Biomethane Strategy commits to developing guidelines to support local authorities when assessing AD and biorefinery planning applications by the fourth quarter of 2024. It remains unclear if guidelines will be delivered in time.
However, drawing from experience in other sectors, a circular issued by the Department of Housing to local authorities and An Bord Pleanála outlining what AD technology entails and provide factual information on potential impacts such as noise, odour, transport, etc, could be useful.
The author Stephen Robb is currently involved in a family/community proposal for an anaerobic digestion facility in Co Donegal.
The structure of Ireland’s AD industry is becoming clear and agriculture will play a crucial role.Farmers will be central to supplying feedstock and using digestate, but won’t be able to develop their own projects.The new Government needs to examine supports for small-scale plants for farmers.
At the time of this article’s publication, the general election is just a day away. By the time you read this, we may already know the shape of the next Government. Last week, I explored the steps needed to realise the opportunities in renewable electricity on farms.
This week, I turn my attention to Ireland’s emerging biomethane sector.
Among renewable energy technologies, none is as closely intertwined with agriculture as anaerobic digestion (AD). In many parts of Europe, it is considered an extension of the agricultural sector.
The Republic of Ireland was unique, in that we essentially didn’t have an AD sector, but rather a few one-off plants from a legacy electricity scheme. In other words, we had an absolute blank canvas to build a new industry, one with farmers centrally involved.
While some may argue that that is what has been achieved over the term of the last Government, others disagree and ask if it’s too late to change the direction of this sector. This article will focus on the key challenges facing the next Government as the AD industry struggles to get off the ground.
The challenge
For many years, there remained ambiguity over which Government department owned AD. This changed last year after the launch of the National Biomethane Strategy, a joint effort across multiple departments, led by both the Department of Agriculture and the Department of the Environment, Climate and Communications. The strategy was intended to be the roadmap to how the Government was going to facilitate the construction of up to 200 new, large-scale ‘agri-centric’ AD plants, meeting its 2030 target.
Ireland’s chosen structure
The ministers were clear that they wanted the AD industry to be agri-centric, with farmers owning, suppling and operating the new network of plants.
An average-sized AD plant for Ireland would produce around 40 gigawatt-hours (GWh) of biomethane gas annually, enough to heat around 6,000 homes.
A plant of this size would require about 2,000 acres of grass silage and up to 30,000 tonnes of slurry per year. Some plants may incorporate waste and other organic sources into their feedstock mix, however. The plant would cost around €15m to build. A target to develop 200 of these across the country was hugely ambitious, and the strong statement of intent caught the eyes of many international developers and funds.
Unique
The Government chose a unique method of supporting the industry, however. Rather than copy what most other European countries did and introduce a long-term support scheme, it instead opted to introduce capital grants in an attempt to reduce the cost of building AD plants and ultimately the price developers need for biomethane.
Biomethane is around three to four times more expensive than wholesale natural gas.
They will then introduce a new renewable heat obligation (RHO), forcing suppliers of natural gas to buy and blend biomethane into their fuel mix or face fines. This means the cost of the expensive natural gas would be spread across the entire customer base of that supplier, stimulating the market for biomethane. A bold plan, one that hasn’t been tried anywhere else in the world to get a new AD industry off the ground.
Estimates by industry bodies suggested that achieving the 2030 target will require over €1bn in State support. However, the Government committed €40m, covering only 20% of the costs for a small number of projects that have already secured planning permission.
Farmers will have access to plenty of digestate in the near future.
The RHO, first proposed in 2021, has faced multiple delays and is now not expected to go live until 2025. No details of the obligation have been announced but will likely come too late for many of the 18 projects which secured capital grant aid. It is likely that many won’t go ahead without the RHO in place as, currently, no market structure exists.
Business model
On the face of it, we now have a clearer idea of how this industry will work.
A small amount of capital grant aid towards the build cost of large-scale AD plants and a legal mandate to force users of natural gas to buy expensive biomethane will soon kick in, creating a long-term market.
But even with this clarity, developing a plant in Ireland will be difficult and will require heavy amounts of capital. This explains, in part, why Ireland has seen an influx of developers backed by international investment funds entering the sector, progressing with planning applications for large-scale plants.
Where do farmers fit in?
So where do farmers fit in this agri-centric business model? Most farmers will only be feedstock suppliers and digestate users, with the prospect of owning and operating an AD plant effectively off the table. Despite comments by Minister Ryan, building AD plants in Ireland is far beyond the reach of the vast majority of farmers. Some argue that this is a consequence of an industry designed for farmers not to be in the driving seat.
Too late for a U-turn?
Considering the glacial pace at which it took our Government to progress this far – and the fact that 2030 is rapidly approaching – a major U-turn now, while necessary, would almost certainly result in no new AD plants being commissioned until the end of the decade.
Don’t get me wrong, there is nothing inherently wrong with international investment. In fact, without it, Ireland wouldn’t stand a chance of meeting any of its 2030 renewable energy targets. However, it comes with a downside: the profits generated are often sent overseas.
As we are spending – and will continue to spend – billions on renewable energy to power our homes, businesses and farms, why can’t we steer policy so that farmers can be in the driving seat?
The answer is yes we can with a bespoke, farmer-level AD scheme that operates separately from the large-scale projects being developed across the country. The biomethane strategy includes a commitment to exploring such options, but more than exploration is needed.
Farmers currently have no idea how much they will be paid for grass silage or forage.
Concrete mechanisms must be developed to allow farmers to build small, on-farm biomethane AD plants. These plants could serve as tools for managing nutrients while also diversifying farm incomes.
The simplest approach would be to introduce a support scheme and grant aid specifically designed for farmer-led projects, with higher funding thresholds for smaller plants – say, those producing below 20 GWh.
Farmers should also have the flexibility to choose between biomethane production or electricity generation. In some cases, small-scale biogas electricity plants, like those developed in the IrBEA demonstration project, work exceptionally well on the right farm.
Nitrates
One of the biggest challenges facing the AD sector is that dairy farmers operating under derogation can export their slurry to a plant but are not permitted to take back digestate.
While efforts are under way in Europe to address this issue, it is crucial for our next Minister for Agriculture to advocate for this. They should champion this cause with the same determination they apply to defending the retention of the derogation.
Animal by-product rules
The requirement to pasteurise digestate urgently needs to be reconsidered, as it increases the running cost of plants significantly, ultimately making the produced gas more expensive. In cases where a plant processes slurry sourced from other farms, many EU countries do not mandate pasteurisation. However, in Ireland, it remains a strict requirement.
If waste is included in the feedstock mix, the necessity of pasteurisation is understandable and justified. However, under the Government’s proposed model of using only grass and slurry, pasteurisation should not be mandatory.
The National Biomethane Strategy commits to developing guidelines to support local authorities when assessing AD and biorefinery planning applications by the fourth quarter of 2024. It remains unclear if guidelines will be delivered in time.
However, drawing from experience in other sectors, a circular issued by the Department of Housing to local authorities and An Bord Pleanála outlining what AD technology entails and provide factual information on potential impacts such as noise, odour, transport, etc, could be useful.
The author Stephen Robb is currently involved in a family/community proposal for an anaerobic digestion facility in Co Donegal.
The structure of Ireland’s AD industry is becoming clear and agriculture will play a crucial role.Farmers will be central to supplying feedstock and using digestate, but won’t be able to develop their own projects.The new Government needs to examine supports for small-scale plants for farmers. 
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