Irish Creamery Milk Suppliers’ Association (ICMSA) president, Denis Drennan said that under the National Biomethane Strategy published earlier this week, gas will have to be underwritten at point of sale.
Drennan said that the proposals under the strategy published earlier this week were “undermined” by the government’s “failure to grasp and state publicly” that the state will have to underwrite the selling price of biomethane gas to the grid or biomethane-generated electricity to the grid.
He said that without “vital underwriting”, the financial model to build anaerobic digestion plants is “unworkable”.
Drennan added that there is “significant potential” in the sector towards meeting Ireland’s climate targets and providing diversification as an option for farmers.
“The starting point for this idea has to be the delivery of biomethane at a price that makes it a viable alternative to fossil fuel.
“That’s just the commercial reality and ignoring that really undermines the whole point,” Drennan said.
The current aim is for the strategy to be supported by an initial biomethane capital grant of €40 million, to encourage early adopters in the industry.
Biomethane strategy
Additional funding is to be provided later as the strategy is implemented over the coming years.
The strategy states that the development of a biomethane sector will provide a number of benefits for the agri-sector in Ireland, such as reducing emissions from the sector.
Drennan said that the potential for the sector “will not be reached” without a guaranteed price for biomethane over fossil fuel gas.
“Biomethane plants involve a significant capital investment that requires a guaranteed price over a specified period of at least 15 years,” he said.
“There will also be significant changes required in terms of the planning process and the criteria and timeframe around grid connection.
“In ICMSA’s opinion, it’s as well to face up to these questions at the start of the rolling-out of any strategy,” Drennan said.