Earlier this month, the Department of Agriculture and SEAI opened applications for a new Biomethane Capital Grant Scheme.
The €40m scheme will provide a 20% grant of the total capital investment costs of a new anaerobic digestion (AD) plant or for upgrade works to an existing biogas plant.
The grant aid is capped at €5m per plant. Of the 46 expressions of interests received, about 17 of them in theory are eligible for the grant.
However, as the terms and details of the scheme were revealed, it appears that many of even the most advanced projects won’t be able to meet the tight completion deadline.
The Department states that this capital call is for ‘ready-to-go’ projects. These are the early adopters of biomethane, who are ready to construct AD plants, or upgrade existing biogas plants to biomethane producing plants.
Plants which avail of the funding must have fully completed construction and be capable of producing biomethane by 31 December 2025, in around 14 months. Late claims will not be accepted and will be automatically withdrawn, and applicants may be penalised.
The applicant must have full planning permission for the plant by 13 September 2024, and this must not expire until at least six months after the closing date for applications.
While around 17 plants may be eligible, from conversations with industry, it seems that even the most advanced plants will struggle to be built by December next year.
The application process is relatively onerous, and without substantial work already completed on a project, it will be hard to pull it together before the deadline of 30 August. Here are the key details the Department is looking for in the application process.
What are they looking for?
The Department is trying to identify which projects will stand a chance of meeting the 2025 deadline. As well as basic information about the project, such as its size, expected completion date and current licensing stage, they want to see proof that suppliers for all the necessary technology have been identified and to confirm whether any equipment has already been ordered.
Financial resources and value for money are also major factors in this application. In addition to a breakdown of build costs, applicants must provide proof that they have the financial resources to complete construction.
Feedstock
A detailed breakdown of feedstocks, including grass silage, crops, food waste, cattle and pig slurry, farmyard manure, chicken litter, straw and similar materials must also be supplied.
The Department wants to know if contracts have been signed with feedstock suppliers and the distance of these suppliers from the plant.
They will require proof of these agreements. It also requests a description of how the digestate will be stored and its intended end use.
If applicants plan to further process the digestate, detailed information about those plans are needed.
The application process begins to seriously narrow down the serious projects at this stage.
Applicants must provide details on the end use of the biomethane and whether a buyer has been identified. They are required to outline the route to market, whether it be direct gas-to-grid or truck and trailer, and whether they have engaged with Gas Networks Ireland on this matter.
The application also asks about the country in which the biomethane will be used.
The tight timeframe will exclude many projects.
Despite grant aid being provided for the construction of the AD plant to help meet Ireland’s biomethane targets, the amount of biomethane that has to 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.
As well as encouraging the first wave of AD development, the scheme also aims to provide diversification opportunities for agriculture. As part of the application process, applicants must describe the impact the AD plant will have on local agriculture and how it will promote on-farm diversification activities.
The application places a strong emphasis on the sustainability of the project. It requires the applicant to describe the climate-proofing measures that will be implemented, as well as a range of monitoring plans to prevent pollution, water quality damage and harm to biodiversity to name a few.
Methane leakages have long been a bugbear for certain Government parties, so the applicant must detail how they will prevent such leaks.
Comment
Funding model is flawed
The December 2025 deadline for fully completing the AD plant presents an extremely tight timeframe.
Any project that hasn’t already begun construction is likely to struggle to meet it.
Moreover, the level of grant aid being offered is disappointingly low, failing to make a significant difference to the viability of these projects.
For years, a grant aid figure of 40% has been suggested as a more effective level of support. So why set the aid so low that it barely helps an industry the Government supposedly wants to nurture?
Risks
This support model is flawed. It fails to mitigate any of the risks that most support schemes are designed to address.
A well-designed scheme should provide certainty and make projects bankable.
Unfortunately, this scheme does neither.
It seems inevitable that the scheme will need to be revised, either by extending the deadline for project completion and securing planning permission or by increasing the level of funding per plant.
If the terms and conditions remain this stringent, it’s conceivable that more than half of the allocated funding could go unclaimed. What happens then?
Will we return the unallocated funds meant to kickstart a new industry to Europe and wait until 2026 for another round? That simply would not be good enough.
AD plants that avail of funding must be fully built by 31 December 2025.This deadline will be too tight for many projects.Planning permission, finance, a gas buyer and feedstock commitments are key elements of the application process.
Earlier this month, the Department of Agriculture and SEAI opened applications for a new Biomethane Capital Grant Scheme.
The €40m scheme will provide a 20% grant of the total capital investment costs of a new anaerobic digestion (AD) plant or for upgrade works to an existing biogas plant.
The grant aid is capped at €5m per plant. Of the 46 expressions of interests received, about 17 of them in theory are eligible for the grant.
However, as the terms and details of the scheme were revealed, it appears that many of even the most advanced projects won’t be able to meet the tight completion deadline.
The Department states that this capital call is for ‘ready-to-go’ projects. These are the early adopters of biomethane, who are ready to construct AD plants, or upgrade existing biogas plants to biomethane producing plants.
Plants which avail of the funding must have fully completed construction and be capable of producing biomethane by 31 December 2025, in around 14 months. Late claims will not be accepted and will be automatically withdrawn, and applicants may be penalised.
The applicant must have full planning permission for the plant by 13 September 2024, and this must not expire until at least six months after the closing date for applications.
While around 17 plants may be eligible, from conversations with industry, it seems that even the most advanced plants will struggle to be built by December next year.
The application process is relatively onerous, and without substantial work already completed on a project, it will be hard to pull it together before the deadline of 30 August. Here are the key details the Department is looking for in the application process.
What are they looking for?
The Department is trying to identify which projects will stand a chance of meeting the 2025 deadline. As well as basic information about the project, such as its size, expected completion date and current licensing stage, they want to see proof that suppliers for all the necessary technology have been identified and to confirm whether any equipment has already been ordered.
Financial resources and value for money are also major factors in this application. In addition to a breakdown of build costs, applicants must provide proof that they have the financial resources to complete construction.
Feedstock
A detailed breakdown of feedstocks, including grass silage, crops, food waste, cattle and pig slurry, farmyard manure, chicken litter, straw and similar materials must also be supplied.
The Department wants to know if contracts have been signed with feedstock suppliers and the distance of these suppliers from the plant.
They will require proof of these agreements. It also requests a description of how the digestate will be stored and its intended end use.
If applicants plan to further process the digestate, detailed information about those plans are needed.
The application process begins to seriously narrow down the serious projects at this stage.
Applicants must provide details on the end use of the biomethane and whether a buyer has been identified. They are required to outline the route to market, whether it be direct gas-to-grid or truck and trailer, and whether they have engaged with Gas Networks Ireland on this matter.
The application also asks about the country in which the biomethane will be used.
The tight timeframe will exclude many projects.
Despite grant aid being provided for the construction of the AD plant to help meet Ireland’s biomethane targets, the amount of biomethane that has to 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.
As well as encouraging the first wave of AD development, the scheme also aims to provide diversification opportunities for agriculture. As part of the application process, applicants must describe the impact the AD plant will have on local agriculture and how it will promote on-farm diversification activities.
The application places a strong emphasis on the sustainability of the project. It requires the applicant to describe the climate-proofing measures that will be implemented, as well as a range of monitoring plans to prevent pollution, water quality damage and harm to biodiversity to name a few.
Methane leakages have long been a bugbear for certain Government parties, so the applicant must detail how they will prevent such leaks.
Comment
Funding model is flawed
The December 2025 deadline for fully completing the AD plant presents an extremely tight timeframe.
Any project that hasn’t already begun construction is likely to struggle to meet it.
Moreover, the level of grant aid being offered is disappointingly low, failing to make a significant difference to the viability of these projects.
For years, a grant aid figure of 40% has been suggested as a more effective level of support. So why set the aid so low that it barely helps an industry the Government supposedly wants to nurture?
Risks
This support model is flawed. It fails to mitigate any of the risks that most support schemes are designed to address.
A well-designed scheme should provide certainty and make projects bankable.
Unfortunately, this scheme does neither.
It seems inevitable that the scheme will need to be revised, either by extending the deadline for project completion and securing planning permission or by increasing the level of funding per plant.
If the terms and conditions remain this stringent, it’s conceivable that more than half of the allocated funding could go unclaimed. What happens then?
Will we return the unallocated funds meant to kickstart a new industry to Europe and wait until 2026 for another round? That simply would not be good enough.
AD plants that avail of funding must be fully built by 31 December 2025.This deadline will be too tight for many projects.Planning permission, finance, a gas buyer and feedstock commitments are key elements of the application process. 
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