Response to EU Decision: Irish Government must continue to progress RHO while designing revised support mechanisms

On 29 March,  the European Commission delivered its Detailed Opinion on the proposed support mechanism for biomethane (The Multiplier)  within Ireland’s Renewable Heat Obligation (RHO). The Opinion means  Ireland is required to revise its scheme to ensure compliance with EU State aid rules.  This is a cause of concern to members and we believe it is important to provide clarity at this time.

Our view is clear: while the RHO remains the Government’s central delivery mechanism,  we recognise now that alternative support mechanisms will now be required to provide the commercial certainty needed to underpin investment and support the development of an indigenous biomethane industry.

Our Two-Phased Approach

We believe Ireland should now adopt a two-phased approach:

• Continue to progress the RHO without the multiplier, maintaining momentum and providing a clear market signal
• Simultaneously design a revised, EU-compliant framework that includes alternative support mechanisms for indigenous production and to ensure projects are commercially viable

Statement from Nick Bennett, Interim CEO

“Most importantly, given the time invested to date, we believe Ireland must now move quickly to implement the Renewable Heat Obligation following the Commission’s opinion, without the multiplier, while maintaining momentum towards developing an indigenous biomethane sector.

As we move from policy development into implementation, a growing number of projects are now in development, with some plants already being commissioned in anticipation of the RHO. This makes the need for clear and effective delivery mechanisms all the more urgent.

Our members need certainty that the RHO will be implemented, alongside timely redesign to address the gap between market prices and project costs.   It will also be important that Ireland fully explores the available government support options to ensure that any revised approach remains capable of supporting indigenous biomethane production in a manner consistent with EU requirements.”

Policy Context and Next Steps

We recognise that the Commission’s opinion reflects the requirement that national support mechanisms operate fully within EU internal market rules. While this necessitates a revision of one element of the proposed scheme, it does not change the underlying strategic case for biomethane in Ireland, nor the importance of the RHO as a key delivery mechanism.

Our focus now is on ensuring that a framework is put in place that is both EU-compliant and commercially workable, including the development of alternative supports that can provide the certainty required for investment and project delivery.

RGFI will engage as a matter of urgency with Government and key stakeholders — including through the Biomethane Implementation Committee — and directly with the Department of Climate, Energy and the Environment (DCEE) and the Department of Agriculture, Food and the Marine (DAFM), to support the timely development of a revised and effective framework.

Why Biomethane Matters

In the context of ongoing global energy volatility, we see the development of indigenous energy sources as increasingly important.

Biomethane has a critical role to play in Ireland’s energy system, including:

• Decarbonising industrial heat
• Supporting circular agricultural practices
• Strengthening energy security through indigenous supply

Engagement with the European Commission

The European Commission has indicated that it is willing to engage on alternative approaches. This provides a constructive basis for progressing a revised model.

We look forward to continuing to work with Government and stakeholders to support the development of a robust, practical and EU-compliant framework to deliver Ireland’s biomethane ambitions

Ends