The Irish biomethane sector was dealt a blow last week when the country’s largest producer of renewable gas announced it was pausing further investments in Ireland.

ClonBio Group, a key investor in Kildare-based Green Generation, which operates the first anaerobic digestion (AD) plant to inject biomethane into Ireland’s national grid, published its annual accounts last week, showing a €14.1m loss last year.

In the report, founder and CEO of ClonBio Group Mark Turley said: “Our GreenGas joint venture, along with other biomethane producers in Ireland, has had a very challenging 2024 in a dysfunctional market.

“Several quite significant capital investment projects in GreenGas have been under way. Further investments beyond these have been paused until we have greater clarity on a number of public policy and market-related issues.”

ClonBio Group operate a range of energy, feed and food ingredient companies across the world. The group’s overall revenue declined to €559m from €630.3m last year, compared with a profit after tax of almost €105m in 2022.

Biomethane challenges

The announcement is a setback for the Government’s efforts to establish a biomethane industry in Ireland. At present, only two AD plants are injecting biomethane gas into the national grid via Green Generation’s injection point in Cush.

Despite the publication of the National Biomethane Strategy earlier this year, biomethane production and injection volumes are projected to fall in 2024 compared with 2023.

While the Government, industry bodies and utility providers anticipate a rapid increase in biomethane production in Ireland, the reality on the ground now tells a different story.

In addition to ClonBio pausing further investments, several other AD plants have been earmarked for sale in 2024.

Dysfunctional market

In the report, Turley said that the ongoing situation, where there are very large volume imports of cheap mislabelled biofuels from Asia containing raw materials that are actively contributing to deforestation and climate damage, is deeply concerning.

Significant volumes of hydrotreated vegetable oil (HVO) are now being imported into Ireland and are out-competing other renewable sources such as biomethane. Investigations are ongoing in Europe into the alleged allegations of HVO fraud.

However, he said that ClonBio has been encouraged to see some nascent activity by the authorities in Ireland, the EU and the US in accepting their responsibility to investigate this serious issue.

"ClonBio encourages a major step up in the authorities' work in this area and will provide any necessary support and co-operation to the authorities to deal with the matter," he said.

Obligation

The Government is counting on the introduction of the Renewable Heat Obligation (RHO) next year to create a market for biomethane gas, enabling the AD sector to expand.

However, continued delays, a proposed low obligation rate and competition from imported HVO have raised significant doubts about whether the Government’s strategy will work.

For more on the latest developments on the RHO, click here.