Over the past number of weeks, we brought you updates from Project Clover, a new food and agri industry-led collaboration designed to reduce carbon emissions and improve the sustainability of Irish agriculture and food manufacturing.

Central to this project, which is still only at the feasibility stage, is the use of biomethane produced from on-farm anaerobic digestion (AD) plants to decarbonise processes which require high levels of heat, ie drying.

The digestate produced at the AD plants will then be used to reduce chemical fertiliser use and contribute to enhancing, and eventually monetising, soil carbon sequestration on Irish farms.

After each article readers ask, why now? This is not the first time we have seen a credible pathway to developing an anaerobic digestion industry in Ireland.

The difference now, however, is that policy will soon make it mandatory to include a renewable source into a heating fuel mix. When this is combined with incremental increases in carbon tax, the economics of biomethane are set to become more favourable as the decade progresses.

Article 23

One specific EU policy measure which will underpin the economics of Project Clover is Article 23 of the Renewable Energy Directive II.

Article 23 is a mandatory renewable heat obligation scheme. It obliges users to have at least 1.3% renewable heat in their heat mix by 2026 at the latest. This increases by 1% every year thereafter to meet the renewable heat targets set by the Irish Government.

The latest date for implementation is 2026. However, Project Clover’s industry participants are asking Government to implement Article 23 at the earlier date of 2023, to help stimulate the market.

While the electrification of heat may satisfy some of this demand from low industrial and residential heat users, biomethane represents the lowest-cost option for large industrial heat users to meet this renewable obligation. Article 23 is the game changer for biomethane.

Other policy drivers

However, Article 23 is just one of the policy drivers behind Project Clover. Developing a large-scale farm-based anaerobic digestion industry also meets many of the objectives set out in the EU’s Farm to Fork strategy.

These include improving the environmental impact of food production, supporting the EU carbon farming initiative, promoting a circular bio-based economy, helping to reduce artificial fertiliser and pesticide use and encouraging balanced regional development.

Irish governmental policy is also favourable towards developing biomethane and this has been indicated in various reports. Under the draft National Energy and Climate Plan, the Government pledged to rapidly evaluate the potential role of sustainable bioenergy, which includes biomethane.

The Climate Change Advisory Council recently advised that “consideration and planning are urgently required for the development of zero-carbon fuels including biomethane and green hydrogen”.

Finally, the Ag-Climatise policy identified biomethane as a measure to reduce greenhouse gas emissions by 2030 and enhance the sustainable use of land, while decarbonising agriculture and develop new systems to contribute to producing sustainable and decarbonised energy.

Cost of biomethane

The Project Clover feasibility study is seeking to determine the business case for developing a national, farm-scale, AD industry which will enable participating members to be both environmentally and economically competitive. Members of the project include many of the country’s dairy processors, all of which have a large, industrial requirement for heat.

In October 2019, KPMG completed the “Integrated Business Case for Biomethane in Ireland” report and presented it to Government.

The report contained a full cost-benefit analysis in compliance with the public spending code.

The report outlined that the cost of producing biomethane amounted to 8.9c/kWh, ie this was the price required by producers.

The wholesale price of natural gas is circa 2.9c/kWh. The challenge is how to bridge the funding gap of 6c/kWh.

Combination of measures

The project is not looking for an energy-based price support scheme, but rather proposes to address the gap through a combination of measures.

These include the early implementation of Article 23, capital grant funding from national and EU funding sources and projected increase in price of carbon.

The team behind Project Clover says that under its current proposals, its members would create enough demand for 2.5TW of biomethane by 2030.

This equates to the output from 125 farm-based AD plants and would satisfy 17% of industrial and commercial gas demand by 2030.