Anaerobic digestion (AD) plants which avail of grant aid under the Department of Agriculture’s new capital grant scheme will be allowed to export up to 80% of the biomethane gas they produce to other countries.

The new €40m Biomethane Capital Grant Scheme, which closes for applications next week, will provide up to 20% or €5m in grants towards the construction cost of building a new AD plant or upgrading an existing biogas plant.

The grant scheme is designed to encourage a wave of AD development, in a bid to reach our 2030 Climate Action Plan target of 5.7 terra watt hours (TWh) of indigenous biomethane production.

Export

However, under the terms of the grant scheme, up to 80% of the biomethane gas from a grant-aided AD plant can be exported from the country to another market.

The terms state that the amount of biomethane that must be used in the Republic of Ireland is proportionate to the grant aid level. Therefore, if an applicant receives 20% grant aid, 20% of the biomethane must be used in the Republic of Ireland, while the remaining 80% can be exported.

Other markets

There is currently no readily available long-term biomethane market in Ireland. However, there are two markets currently seeking biomethane that are of particular interest to Irish AD plants - Britain and Northern Ireland.

In Britain, the Renewable Transport Fuel Obligation - an obligation on suppliers of fossil petrol and diesel to supply a certain percentage of renewable fuel to the UK market - provides a ready-made market for biomethane.

Producers can receive green certificates on top of the price of natural gas. Producers are rewarded with more certificates if they use more waste as feedstock.

In Northern Ireland, there remains megawatts of spare capacity in combined heat and power generators that can claim renewable obligation certificates under the Northern Ireland Renewables Obligation.

This scheme facilitated the development of AD plants in Northern Ireland, but there remains significant extra capacity in generators, with some remaining idle due to lack of gas.

The biomethane gas would have to be physically delivered to these generators, but a premium would be received for up to 13 years.

However, under EU rules, green certificates that accompany the gas from grant-aided AD plants cannot be traded.

As only 20% of the AD plant is grant-aided, it remains unclear whether the other 80% of certificates can travel with the gas to other European markets or if this applies to the UK.