The Government has vowed to introduce a new €200m biomethane capital grant scheme later this year and remains committed to developing an indigenous anaerobic digestion (AD) sector, despite suffering a significant setback with its flagship support scheme.

The renewable heat obligation (RHO) was set to be the main support mechanism for AD plants in Ireland.

The obligation scheme would require Irish suppliers of fossil fuels used for heating to incorporate renewables into their fuel supply. In the case of natural gas suppliers, the only viable alternative is biomethane. The Government intended that biomethane produced in Ireland would count as 1.5 units towards a supplier’s obligation under a multiplier mechanism.

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However, the detailed opinion submitted by the European Commission last month found that the multiplier mechanism would be incompatible with EU internal market rules, as it favoured Irish biomethane over imports.

Commitment

In a statement to the Irish Farmers Journal, a spokesperson from the Department of Climate, Energy and the Environment said the Government remains fully committed to supporting the development of an indigenous biomethane sector.

“Introduction of the RHO is a priority for the Department. Drafting of the necessary legislation to underpin the scheme is underway with the intention to submit to Government for approval to publish as part of the summer legislative session,” it said.

It also said that funding of up to €200m, secured through the National Development Plan and Infrastructure, Nature and Climate Fund, will be made available to support the development of anaerobic digestion plants in Ireland.

Timeline

Developing the legislation for the RHO has been paused for six months while the Department seeks a solution to the multiplier issue. Some members of the industry have called for the RHO to be introduced without the multiplier, as developers consider pulling out of the Irish market.

The Department said that it is aiming for the grant scheme to open for applications from the third quarter of 2026. The scheme will have a number of funding rounds out to 2030. The Department is in the initial stages of developing the scheme and details of its design, including the level of grant support, will be made available in due course.