Developing a biomethane project in Ireland; key challenges
Andrea Munoz-Garcia
Managing Consultant
Alder BioInsights attended The Irish Bioenergy Association (IrBEA) 25th National Bioenergy conference on biomethane and biofuel, which took place recently at the Killashee Hotel, Naas, Co Kildare.
The Irish biomethane context
The Irish AD and biomethane sector is at a pivotal moment right now, transitioning from ambition to actual delivery, with the first biomethane plant(s) recently being directly connected to the Irish gas network.
Over the past few years, the Irish Government has been laying the groundwork for the delivery of its ambitious target, to be producing 5.7 TWh of biomethane by 2030. This underpinning work included the publication of the Biomethane Strategy in 2024 and the announcements of the Renewable Heat Obligation (RHO),as well as Capital Grants for new developments in the years that followed. The Biomethane Strategy was received with enthusiasm by stakeholder, as it was seen as a step in the right direction for the sector. Although the RHO was also welcomed, some stakeholders were more doubtful about it, as a tariff-based mechanism would have been preferred by many. Tariff-based mechanisms have significantly contributed to the development of the AD industry in other European countries, like the UK, and are aimed at increasing supply; obligation schemes, on the other hand, tend to be considered more suitable at a later stage of sector maturity, being more focused on stimulating demand. Moreover, the implementation of the RHO has faced delays due to the rejection by the European Commission of the use of multipliers to encourage the use of domestic biomethane, which has also caused further doubts among stakeholders. Nevertheless, during the conference, Department of Climate, Energy & Environment (DCEE) stated that the RHO is going through the quality assurance process, and implementation of the RHO can be expected in early 2027.
Another exciting announcement was made at the conference, this one in relation to capital grants for biomethane projects. The second round of Grants opened to Expression of Interest from developers on the 8th of October, with the aim to identify projects, feedstock types, maturity, location, etc. This new round of funding, for which eligibility criteria is being finalised, will make available €200 million. This followed a first round of capital grant support that made available €40 million, allocated to eighteen projects.
Moving towards delivery
Seven of those projects, which received funding in round one, are now under construction or have recently finished construction. And with many more projects in the pipeline, as showcased by developers at the conference, the transition of the sector towards delivery is clear.
This transition towards delivery was the focus of the IrBEA conference, which, throughout the day, covered most of the key elements involved in the successful delivery of a biomethane project in Ireland, including planning and permitting, public engagement, grid connections, and gas offtake.
What challenges are developers experiencing?
The event also gave the floor to developers who shared updates on their current projects and offered insight on the challenges and issues experienced through their journey of developing a biomethane site in Ireland.
- Delays in the implementation of the RHO were flagged by several developers as a key issue that has had a direct effect on offtake agreements and investment decisions. Some stakeholders also pointed out the fact that the trajectory beyond the second obligation period has not been stated yet, creating uncertainty around offtake.
- The timeframe for obtaining planning and permitting was also raised by several developers as a key issue for project development in Ireland. Several stakeholders flagged that the process to obtain planning and permitting could take several years, with stakeholders stating that the planning and permitting process was “lengthy, risky and expensive”. It was also raised that although RED III introduces permit acceleration measures and maximum decision timelines for renewable energy projects, Ireland’s pathway through planning, environmental licensing and appeals remains complex and insufficiently standardised.
Some developers shared their thoughts and experiences on the key elements for a shorter and successful planning and certification journey. From a planning point of view, these included early engagement with the relevant agencies, learning from existing sites and bringing key aspects into the design, and conducting market research to select best technologies and providers. In regard to obtaining certification for the biomethane, the importance of transparency along the supply chain to obtain ISCC certification was marked as vital.
- The process of getting connected to the grid was also raised as an issue in some cases, due to being a lengthy process holding up commissioning of the site. Similarly, connections to utilities also caused delays for some projects.
- Digestate is the by-product of AD and it cannot be overlooked during the development process. The need for more clarity on digestate ‘end-of-waste’ status was flagged by several projects. In particular, the need for standardised end-of-waste criteria across the nations, as well as nation-wide quality standards and quality assurance protocols.
Alder’s experience
Alder has been monitoring the Irish biomethane AD and biomethane sector for the last few years. We have developed a database of Irish AD sites, twinning our AD database for UK sites, and we annually publish the Ireland’s AD Deployment Report. This report provides a comprehensive breakdown of sector development in the Republic of Ireland, providing detailed information on feedstock, installed capacity and output type (combined heat & power or biomethane-to-grid) for every project.
Alder BioInsights has been supporting developers in the UK for many years and has helped them overcome some of the challenges currently being faced by developers in Ireland. As an example, Alder has helped clients to demonstrate the carbon intensity of their biogas and biomethane, required to demonstrate compliance with support mechanisms or explore market options. Alder has recently launched its new Biomethane GHG Calculator which is ISCC compliant and provides a practical and transparent way for biomethane producers to calculate, understand and report greenhouse gas emissions across multiple schemes.
Alder has also guided clients’ entry into the UK anaerobic digestion market, by providing insight on policies, regulations, and major drivers for biomethane development, as well as quantification of current and future size of the UK biomethane market, the biomethane trading system, comparison of capital and operational costs, and revenue streams related to different types of systems and markets respectively. The work has also included mapping out existing biomethane trade flows by identifying key players in the supply chain (e.g. producers, suppliers, and users) and evaluating different investment options and business models using SWOT analysis and other methods.
Conclusion
The IrBEA conference was hosted at an important moment for the sector, with the RHO very close to being implemented, the announcement of the ‘opening’ of the second round of capital grants, and the recent connection of the first plant to the grid. The Irish biomethane sector is moving forward, becoming more tangible, with first plants being finalised and connected to the grid. The road to this point has not been easy, with policy delays leading to uncertainty, and some issues continue to affect developers and will need to be overcome.
Alder is optimistic about the future given past analysis on feedstock availability, development potential, economics, environmental benefits and the relative scale of the opportunity. Alder remains ready to support clients with interests in the Irish AD and biomethane markets, sharing over 20 years of experience as strategic business consultants with a strong track record in the UK and an established physical presence in the Republic of Ireland.
