Green Generation, the first company to inject biomethane renewable gas into the national grid, has gone into receivership.

The Kildare-based company, founded by Billy Costello, pioneered Ireland’s first renewable gas grid injection point.

It produced biomethane from food waste at its anaerobic digestion (AD) plant in Nurney, Kildare.

The company sold biomethane to the transport industry to help meet its renewable blending obligation under the Renewable Transport Fuel Obligation (RTFO).

However, the company has faced significant pressure due to the increasing volume of hydrotreated vegetable oil (HVO) imports.

HVO is a fuel derived from used cooking oil and acts as a direct replacement for diesel. However, concerns have been raised that much of the imported HVO is actually produced from virgin palm oil and fraudulently labelled as coming from used cooking oil.

This influx of HVO into the market at significantly lower and more competitive prices than biomethane meant that Green Generation could no longer sustain its business model.

Price collapse

Speaking to the Irish Farmers Journal, Billy Costello explained that imported HVO receives the same number of certificates as indigenous biomethane gas—2.5 certs. These certificates are then bought by companies to meet their transport obligation. In 2022, these certs were worth 14c/kWh, plus the price of natural gas for his biomethane. Today, the certs are valued at just 5.5c/kWh.

The government is set to open a public consultation on reducing the number of certs HVO can receive from 2.5 to 2, likely in an effort to level the playing field for indigenous producers. However, for this to be effective and allow the AD sector to develop, HVO should not receive any certs at all, Costello argued.

He also questioned Minister Darragh O’Brien’s recent announcement to invest in an LNG terminal, stating that he should instead be prioritising the development of AD plants in Ireland.

Billy, who was in the process of expanding the plant in Kildare when receivers were appointed, has also developed AD plants in the UK and Germany. He hopes this situation will serve as a wake-up call to the government, remarking that the current strategy will not lead to the development of any new AD plants in Ireland.

Green Generation produced biomethane gas from food waste.

Industry turmoil

The news of Ireland’s biomethane pioneer entering receivership will be a blow to the Government’s plans to build up to 200 new AD plants by 2030.

Currently, there isn’t a business model in place for the sector, largely due to the lack of market demand. The Government plans to introduce a new obligation for the heat sector in the hope of creating a market for biomethane gas.

However, just as happened with Green Generation’s role in supplying the transport obligation, HVO and cheaper imported biomethane will also be allowed to meet this obligation.

The collapse of Green Generation is likely to result in hesitation from other Irish developers looking to build AD plants.

Last year, Irish biofuels company ClonBio Group, which owns a 50% stake in Green Generation, announced a pause on any future investments in Ireland. The company, founded by entrepreneur Mark Turley, operates multiple renewable energy businesses across Europe.

Market price

Speaking to the Irish Farmers Journal, Clonbio’s James Cogan explained that the market price for biomethane gas has fallen, while regulatory pressures have worsened.

He said that with both obligations either in place or set to be introduced, they had expected policy to encourage the development of genuine Irish renewable projects.

However, he claimed that Ireland’s policy is instead facilitating fraudulent imports of HVO and the same will likely happen with the renewable heat obligation.

Cogan stated that fraudulent HVO entering the Irish market is not being taken seriously, and this remains a significant concern for the Irish AD sector.

Future of biomethane in Ireland

The receivership process could result in the sale of Green Generation’s assets, including its AD plant and Ireland’s only private grid entry point for biomethane.

Currently, only Green Generation and Donegal-based Glenmore Generation are injecting biomethane into the national grid.

Without Green Generation, despite government targets to replace 10% of Ireland’s natural gas use with biomethane, it is possible that there could be no significant volume of biomethane gas in Ireland’s grid for some time