Irish Energy Policy

Programme for Government

In order to deliver Ireland’s expanded and deepened climate ambition, as part of the Green New Deal within the Ireland’s Programme for Government, far-reaching policy changes will be developed across every sector, including introducing a transformational programme of research and development, to ensure that Ireland is at the cutting edge of scientific and technological innovation in meeting our climate targets, including in green hydrogen.

The Government has set out that it will take the necessary action to deliver at least 70% renewable electricity by 2030 (since updated to 80%). To achieve this, Ireland will also invest in research and development in green hydrogen (generated using excess renewable energy) as a fuel for power generation, manufacturing, energy storage and transport.

Also, a long-term plan will be developed setting out how, as a country, we will take advantage of the massive potential of offshore energy on the Atlantic Coast. This plan will focus on utilising our existing energy and maritime infrastructure, and will seek to create the right investment environment, support ocean energy research and developing innovative transmission and storage technologies, including green hydrogen.

Ireland's Climate Action Plan

In November 2020, the Irish Government, in response to the National Competitiveness Council’s Recommendation 3.4 ‘Decarbonise the gas network’, stated 'The Programme for Government commits to achieving net zero emissions by 2050. It is expected that, in order to meet this commitment, all energy networks and carriers, including the gas network, will be carbon neutral by 2050. Decarbonising the gas network will include a reduction in the demand for gas and the replacement of the natural gas carried in the network with renewable gas. Renewable gases will include biomethane and green hydrogen (i.e. hydrogen produced from renewable sources)'.

Actions to deliver on this ambition are contained within the Interim Climate Actions 2021 (Action 54) and the Climate Action Plan (CAP) 2021 – Annex of Actions (Action 169). CAP 2021 provided a detailed plan for taking decisive action to achieve a 51% reduction in overall greenhouse gas emissions by 2030 and had an initial target of 1.6TWh/yr of biomethane on the network by 2030. This ambition has since been significantly increased to up to 5.7 TWh of biomethane production in Ireland by 2030, as per Ireland’s sectoral emissions ceilings, agreed July 2022, and reaffirmed in Climate Action 2023. This would replace about 10% of current natural gas use in Ireland.

Climate Action Plan 2024, published December 2023, builds on previous Climate Action Plans and is the framework through which the government intends to meet the legally-binding, economy-wide carbon budgets and sectoral emissions ceilings. Key actions to be delivered as per CAP 2024 include a detailed implementation plan and appropriate governance arrangements for the National Hydrogen Strategy, and a Biomethane Coordination Group is to be established to oversee delivery of 5.7TWh target and National Biomethane Strategy implementation activities – both to be in place by end of 2024. In addition, there is an action to introduce a Renewable Heat Obligation Scheme by 2024 to incentivise the production of indigenously produced biomethane in Ireland.

National Hydrogen Strategy

The National Hydrogen Strategy sets out the strategic vision on the role that hydrogen will play in Ireland's energy system, looking to its long-term role as a key component of a zero-carbon economy, and the short-term actions that need to be delivered over the coming years to enable the development of the hydrogen sector in Ireland.

The Strategy has been developed for three primary reasons:

1. Decarbonising our economy, providing a solution to hard to decarbonise sectors where electrification is not feasible, or cost effective.

2. Enhancing our energy security, through the development of an indigenous zero carbon renewable fuel which can act as an alternative to the 77% of our energy system which today relies on fossil fuel imports.

3. Developing industrial opportunities, through the potential development of export markets for renewable hydrogen and other areas such as Sustainable Aviation Fuels.

The Strategy assesses both the long-term and short-term actions to enable hydrogen to develop across the entire value chain, covering six core areas:

1. Hydrogen Production: Ireland will prioritise the scale up and production of renewable hydrogen. Prior to 2030, hydrogen will be produced from grid connected electrolysis from surplus renewables. 2GW target of offshore wind, for the production of renewable hydrogen, to be in development by 2030. In the long-term Ireland can develop a decarbonised industrial opportunity and become a net exporter of renewable hydrogen.

2. End Uses of Renewable Hydrogen: The deployment of renewable hydrogen in Ireland will focus on hard-to-abate sectors where energy efficiency and direct electrification are not feasible or cost-effective solutions. Initial focus on heavy duty transport, closely followed by industry and flexible power generation, including long-duration energy storage. Blending in the gas network could play an enabling role (supply of last resort) and could offer an early commercial market for renewable hydrogen producers.

3. Transportation, Storage, and Infrastructure: Initial hydrogen applications likely to use compressed tankering solutions. Subsequent infrastructure expected across several regional clusters where production, high priority demand and large-scale storage are co-located. The expansion and linking of these clusters into a national hydrogen network will be key to creating a liquid mature hydrogen market. Where feasible, repurposing existing natural gas pipeline infrastructure to hydrogen is favourable. The cost of repurposing existing pipelines is 10-35% compared to the cost of building new hydrogen pipelines.

Hydrogen storage will play a key role in Ireland's future energy system; balancing fluctuations in supply form variable renewables and seasonality changes in end user demand, and providing energy security in case of unforeseen supply disruption and helping to reduce any related price volatility.

4. Safety and Regulation: Hydrogen safety is essential and early focus is needed to develop a safety roadmap to deliver the necessary safety frameworks and regulatory regimes across the entire hydrogen value chain. Standards and regulatory regimes developed in Ireland must also be done in a manner which is in line with European policy, legislation and considerate of other international partners as much as possible.

5. Research, Cooperation and Scaling Up: Targeted, short-term research needs have been identified throughout the National Hydrogen Strategy which will be essential to ensuring future informed policy making. Ireland will enable the development of a small number of hydrogen demonstration projects during the 2020s, and in parallel work to deliver the requisite safety and regulatory regimes.

6. Delivery and implementation: A strategic hydrogen development timeline roadmap sets out the vision for how hydrogen economy is expected to develop and scale up over the coming decades, across the entire value chain. Along with the list of actions published as part of the National Hydrogen Strategy, it will help to provide clarity on the sequencing of future actions needed and guide the work over the coming months and years.

Renewable Heat Obligation

The Renewable Heat Obligation (RHO), if introduced, would require the suppliers of energy used in the heat sector in Ireland to ensure a certain proportion of energy supplied is renewable. An obligation in the heat sector will incentivise the use of renewable heat while spreading the obligation across all non-renewable fuel types. This model of targets and market support is the basis of the successful growth of renewable electricity in Ireland and of renewable gas throughout Europe, and if enacted will drive the growth of biomethane production in Ireland.

Ireland’s Climate Action Plan (CAP) recognises that a renewable source of liquid and gaseous fuels will need to be established in Ireland for heating purposes, especially to decarbonise high temperature heat where electricity may not provide a practical solution.

Overall, Gas Networks Ireland believes measures to encourage the deployment of renewable gas solutions such as a Renewable Heat Obligation are appropriate to increase the share of renewable energy in the heating sector.

Renewable Transport Fuel Policy 2023-2025

This policy concerns the supply of renewable transport fuels (RTF) and the proposed actions over the next two years concerning The Renewable Transport Fuel Obligation (RTFO) to achieving greater renewable energy in transport in line with European requirements and national climate action objectives.

One of the main measures that Ireland introduced in order to help meet EU targets for renewable energy in the transport sector is The Renewable Transport Fuel Obligation (which was previously the Biofuels Obligation Scheme (BOS)). It sets out an obligation that suppliers of road transport fuels must include a certain percentage of renewable fuels (including biofuels) across their general fuel mix. To date, biofuel has been the primary mechanism used to increase the share of renewable energy in the transport sector and reducing greenhouse gas emissions.

Following a commitment in November 2021 by Minister for Transport, Eamon Ryan TD, to include incentives to develop the supply of renewable fuels including advanced biofuels and alternative transport fuel, such as biomethane and green hydrogen, biomethane used to fuel CNG and LNG vehicles is now recognised by the Renewable Transport Fuel Obligation, and it is proposed to include green hydrogen in this obligation once the revised EU Renewable Energy Directive comes into force.

Using biomethane will be particularly beneficially as biomethane can flow into the transport sector via Compressed Natural Gas filling stations connected to the existing gas network, leading to a more efficient energy transition in the transport sector by using existing infrastructure.

Energy Security in Ireland to 2030

The ‘Energy Security in Ireland to 2030’ report outlines a new strategy to ensure energy security in Ireland for this decade, while ensuring a sustainable transition to a carbon neutral energy system by 2050. The comprehensive report, which has 28 actions in total, is a roadmap to ensuring a sustainable, affordable and secure energy landscape that balances energy risk and resilience against our binding European and domestic energy and climate commitments. The report was published as part of an Energy Security Package, containing a range of supplementary analyses, consultations, and reviews, which have informed the recommendations and actions related to energy security.

A number of the actions in the report set out that renewable gas, the existing gas network and renewable compatible gas storage will play a crucial role in Ireland’s energy security in addition to achieving our climate targets.

Establishing large scale renewable gas compatible storage offers permanent and sustainable security of supply to Ireland’s energy system. Action 14 sets out that studies will be finalised to inform the development of long-term gas storage solutions which can store renewable gas, in particular hydrogen.

Indigenous renewable gases such as biomethane and green hydrogen will play a larger role and a critical component in Ireland’s future decarbonised energy system. The National Biomethane Strategy due for publication this year, will identify all necessary actions to deliver the national target of up to 5.7TWh by 2030. The National Hydrogen Strategy, published in July 2023, will support delivering the full potential of this resource in Ireland.

As Ireland reduces its gas demand and increases renewable gas production, the role that the existing natural gas network plays will need to evolve. Action 16 will ensure a fit-for-purpose gas network that supports Ireland’s energy and climate ambition. It will consider how such infrastructure can be used to transport zero carbon generation in the future and determine the long-term infrastructure investments needed to support this.

Carbon budgets

Ireland’s carbon budget programme, comprising three 5-year budgets (2021-2025; 2026-2030; and 2031-2035), came into effect on 6 April 2022. A carbon budget represents the total amount of emissions, measured in tonnes of CO2 equivalent, that may be emitted by a country or region during a specific time period. The carbon budget for the period 2021-2025 aims to reduce emissions by 4.8% on average annually for five years, while the second budget from 2026-2030 will look to up that annual reduction to 8.3%. The budgets are further broken down into sectoral emissions ceilings, which determine how each sector of the economy contributes to the achievement of the carbon budgets.

Sectoral Emissions Ceiling

The sectoral emissions ceilings have been set for the electricity, transport, buildings, industry and agriculture sectors, with reductions in emissions ranging from 25% to 75% per sector by 2030, relative to 2018 emission levels. In addition, the agreement reached on sectoral emissions ceilings also commits additional resources for solar (more than doubling the target to 5,500 MW), off-shore wind (moving from a target of 5,000 MW to 7,000 MW), green hydrogen (an additional 2,000 MW), agri-forestry and anaerobic digestion (up to 5.7 TWh of biomethane) – to further accelerate the reduction of overall economy-wide emissions.

Commission for Regulation of Utilities (CRU)

The CRU published its Information Paper in September 2021, stating that 'The CRU is providing clarity that additional gas-fired generation is vital for the successful delivery of Ireland’s 2030 renewable electricity and climate targets. In addition, policies to decarbonise the natural gas network through the injection of biomethane, or in the future green hydrogen, will play a key role in delivering our net-zero legal obligations'.

The CRU’s Decision on Gas Networks Ireland Price Control 5 (PC5) highlights that “this decision comes at an important time for the evolution of the gas network, where Ireland is seeking to decarbonise its energy needs in a secure and sustainable way. This is being supported by government policies, such as renewable gas targets, a hydrogen strategy as well as an energy security package. Energy policy and markets will continue to develop at pace to decarbonise and ensure continued security of supply. GNI has an important role in adapting to these developments and PC5 provides funds to ensure that GNI can do just that….”