Earlier this month, CycleØ, a new pan-European biomethane developer, announced its intention to invest €100m in Ireland. Its plan, subject to securing planning permission and permits, is to build and operate four large-scale, modern anaerobic digestion (AD) plants across the country.

This is a significant investment and a strong vote of confidence in the Irish biomethane sector, which has so far struggled to get off the ground. But who are CycleØ, and what does the announcement mean for Irish farmers? To find out more, we caught up with Cork native James Manley, the Irish country manager for the company.

Who are CycleØ?

Headquartered in London, CycleØ was founded in 2022 by Ara Partners, a multi-billion euro private equity firm, following its acquisition of FNXlng, a Spanish company that already operates several biomethane facilities across Europe. Last year, CycleØ opened a new branch in Ireland.

CycleØ actively develops and operates biomethane projects across Europe, with projects planned or operating in Spain, Italy, and Ireland. The company aims to develop, build, own and operate at least 50 plants across Europe by 2028.

Irish plants

Since his appointment, James has been responsible for developing their portfolio in Ireland.

This work has led to the commitment of €100m in equity financing to build four new agri-based AD plants in Kildare, Cavan, Galway and Limerick.

Each plant will produce around 40 gigawatt-hours of biomethane gas per year, enough to heat over 3,000 homes annually in Ireland. This is becoming the standard size of AD plants under development in Ireland. Three of the projects will be directly connected to the gas grid, while one will use specialised trailers to transport the gas to a grid injection point. The four sites in question have been purchased by CycleØ, subject to planning approval.

Feedstock

The plants will be predominantly supplied with agricultural wastes and byproducts, with each plant requiring 80,000 tonnes per year. Slurries, such as cow and pig slurry, farmyard manure and chicken manure, will be central feedstocks, while agri-food waste, such as dairy sludge, belly grass and distillery waste, will also be used. An EPA waste licence will be required at each site.

James explains that 15–20% of the feedstock will also be supplied by crops, such as grass silage or wholecrop.

Contracts for farmers

James explained that developing these projects will provide farmers with new long-term additional revenue and deliver decarbonisation solutions for them.

For example, contracts of up to 15 years will be available for farmers to supply slurry, manure and agri-waste. The company states that this will offer “peace of mind to farmers concerned about the nitrate derogation limiting their ability to manage manure within existing land resources”. However, whether they are paid for the slurry/manure depends on the value of the gas received under the impending renewable heat obligation. If economically viable, they will be paid; if not, they won’t, James said.

Contracts will also be available for farmers to grow crops, such as grass silage or wholecrop, for the plants, which they will be paid for. Approximately 100 farmers will be needed to supply each plant within a 25km radius.

Digestate

There will be on-site clamps to store some of the crops. The plant design will likely include two primary, two secondary and two digestate storage tanks, though this is subject to change. The aim is to have ample storage space for digestate, relieving pressure on farms.

The digestate will be separated as standard, and a decision is being considered on whether to further process it using an ammonia stripping system, depending on the feedstock.

Suppliers and other farmers will take back the digestate to use as fertiliser. James said that, at present, there is no set plan to sell the digestate back to the farmers. “While we would like to see an income stream arising from digestate, ultimately, it will still be seen as a cost to the company, similar to other plans in development,” he said.

Ownership

CycleØ intends to fund, build, operate and own the AD plants outright. While there is currently no plan for farmers to hold a share in the plants, James said he is open to discussing the possibility.

He added that they are actively seeking additional sites for more AD plants, either to purchase or lease for upwards of 20 years.

The sites must be close to the grid, have good road access and be near the feedstock supply.

Markets

Like most AD plants in development in Ireland, they intend to supply biomethane gas to natural gas users on the grid. However, he said the implementation of the renewable heat obligation (RHO), designed to create a new market for biomethane, will be critical for these projects to proceed.

“It will provide a market price, which many energy users are reluctant to lock into until the RHO is announced,” he said.

While a capital grant is welcomed, a feed-in tariff support mechanism, as seen in other European countries, would be more favourable, James said.

Community

When operational, James explained, each plant will create four to five full-time jobs, with an additional 15-20 indirect jobs. However, as their presence grows, more roles will emerge in the company, such as feedstock managers, agronomists, engineers and others, he said. Regarding community engagement, Laurence Molke, CEO of CycleØ, said, “We’ll be organising a series of local, face-to-face meetings and working with leading Irish farming [organisations] and local media to share more information about our plans and how farmers will benefit from working with us”.

James explained that residents within a 3km radius of the plants will be invited to open days to learn about the projects. Other than employment and environmental improvements, little detail was given on what other community benefits are planned for these plants.

For farmers who are critical of the announcement, James urged them to come and speak with him about AD and their projects to learn the actual facts and dispel myths.

The first AD projects are scheduled to be submitted for planning by the end of the year, with the remaining ones planned for early 2025.

In short