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.  This would replace about 10% of current natural gas use in Ireland.

Climate Action Plan 2023, published December 2022, followed by its Annex of Actions in March 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. CAP 23 sets out ambitions for the production of up to 1 TWh of biomethane by 2025 with the construction of up to 20 AD plants of scale and up to 5.7 TWh of biomethane by 2030 with up to 200 AD plants. Key actions to be delivered as per CAP 2023 include a National Biomethane Strategy and a Policy/Regulatory Roadmap for Green Hydrogen Use – both to be delivered in 2023. 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.

Sustainability of Biomethane Production in Ireland report

The ‘Sustainability of Biomethane Production in Ireland’ report commissioned by Gas Networks Ireland and undertaken by Devenish Nutrition and KPMG Sustainable Futures in 2021, concluded that agriculturally produced biomethane can be delivered sustainably and at scale to help reduce on-farm emissions and decarbonise Ireland’s energy system. The report found that there is sufficient capacity from improved efficiency across land already in agricultural production to produce up to 9.5TWh of biomethane, meaning higher levels of ambition are feasible.

With the appropriate policy frameworks in place there is significant appetite from producers to develop a market of scale for biomethane production, and from business, fleet and industry to purchase biomethane. A number of Irish businesses have already purchased biomethane certificates to power their operations sustainably.

Read the report

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.

Biofuels Obligation Scheme

One of the main measures that Ireland introduced in order to help meet EU targets for renewable energy in the transport sector was the Biofuels Obligation Scheme (BOS). It sets out an obligation that suppliers of road transport fuels must include a certain percentage of environmentally sustainable 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.

November 2021, Minister for Transport, Eamon Ryan TD, announced the publication of the Renewable Fuels for Transport Policy Statement. The policy statement “establishes an ambitious pathway for transport fuels to achieve our target of a 51% reduction in emissions by 2030. Further commitments include incentives to develop the supply of renewable fuels including advanced biofuels and alternative transport fuels such as green hydrogen and biomethane, while ensuring the maintenance of the highest standards of sustainability of biofuel supply from source”.

In addition, this policy complements supports for the heavy duty vehicle sectors which will continue in 2022 under the Alternatively Fuelled Heavy Duty Vehicles Grant and the Accelerated Capital Allowance scheme, now also applying to hydrogen propelled vehicles.

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 decarbonisation of transport by using existing infrastructure.

National Energy Security Framework

The Framework provides a single overarching an initial response to address Ireland’s energy security needs in the context of the war in Ukraine. It coordinates work connected to energy security across the electricity, gas and oil sectors and sets out a ‘whole-of-Government’ response to the challenges posed to energy security and energy affordability. The development of the Framework has also taken account of the need to decarbonise our society and economy.

The replacement of fossil fuels with renewable energy is a key method of reducing Ireland’s reliance on imported fossil fuel, as such, the introduction of supports for biomethane will be appraised and a hydrogen strategy for Ireland will be prioritised.

The introduction of supports for biomethane will be appraised as a replacement for natural gas in the context of the changed outlook for natural gas supply and prices. Supports for biomass/biogas in the heat sector will also be reviewed under the Support Scheme for Renewable Heat.

Also, over €8.4 million in funding from the Climate Action Fund will be released for the Green Renewable Agricultural Zero Emissions Gas project, led by Gas Networks Ireland. This project will deliver the first large-scale central grid injection facility in the State and will collect renewable gas from anaerobic digestion plants in the catchment area, transport it by road to the facility, and inject it into Ireland’s gas network.

In 2020, the EU developed a hydrogen strategy, recognising the potential of the fuel source as playing a part in the Union’s target of achieving a climate-neutral society by 2050. The development of an integrated hydrogen strategy for Ireland is to be prioritised, in line with the Climate Action Plan, including the possibility of setting clear national targets for hydrogen.

The work underway for the security of supply review of Ireland’s electricity and natural gas systems will be done in parallel with the development of the hydrogen strategy to ensure the long-term security needs take account of future hydrogen technologies.

Gas and electricity emergency training exercises and the role for energy sector stakeholders, including Gas Networks Ireland, EirGrid, ESB Networks, and the Commission for Regulations of Utilities (CRU) are outlined here.

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)

In an Information Paper published in September 2021, the CRU stated 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 renewable natural gas, or in the future green hydrogen, will play a key role in delivering our net-zero legal obligations'.

The CRU’s Price Control 5 (PC5) Regulatory Framework Consultation Paper also highlights key opportunities and challenges for renewable gases during the PC5 period, including:
‘efficiently and safely facilitating the decarbonisation of the gas network and the economy generally’.

'GNI’s actions to connect biomethane plants during PC5 will need to make substantial progress towards Ireland’s 1.6 TWh biomethane target for 2030. That target is modest compared to the 58.7 TWh of gas used in 2020, but it is a big step up from current levels. GNI has set the groundwork for that transition during PC4 with the completion of the first biomethane injection site in 2020, the injection site in Cush, Co. Kildare.

The CRU expects GNI to play an important role in helping deliver on any national and European policy targets for hydrogen injection into the gas network, as they are set. GNI’s network could transport hydrogen in a blend with natural gas and biomethane. It is possible that, further ahead, parts of GNI’s network may be converted for dedicated hydrogen use. The CRU will continue to support GNI’s hydrogen readiness work during PC5.'