RE: Renewable Gas Forum Ireland Opening Statement & Executive Summary

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1 Joint Committee on Communications, Climate Action & Environment The House of the Oireachtas Service Kildare Street Dublin 2 20 th February 2018 RE: Renewable Gas Forum Ireland Opening Statement & Executive Summary Introduction The Renewable Gas Forum Ireland (RGFI) is an industry forum that represents the interests of the biogas industry in the whole island of Ireland. The RGFI represents the full supply chain of the biogas industry from the biogas producers, technology providers, academia, innovation and research centre to the end gas consumer seeking a carbon neutral solution. The RGFI is consumer lead and an advocacy for all gas consumers, seeking engagement with government departments on a consultative, proactive and solution based approach to providing carbon neutral pathways to decarbonising gas as a primary energy. Strategic Objectives The core objectives of RGFI is to bring together industry in the form of producers, consumers and supply chain participants to work together to inform, evaluate and promote policies that support the development of the renewable gas industry in Ireland. Consumer Demand & Climate Change obligations: Approximately 60% of total Heat energy consumption in Ireland is provided by gas (natural gas and LPG), and for ETS/Large Manufacturing companies, this is in excess of 80%. The ETS manufacturing and processing companies operate in Ireland, in two categories a) FDI s and b) Agri-food & Beverages sector. The proposed policy in the Energy White Paper to exclude the ETS manufacturing sector from accessing the Renewable Heat Incentive (RHI) will significantly impact Ireland s competitiveness in attracting and retaining FDI industries and jobs, and severely impact the Agri-Food sectors drive to de-carbonise (Origin Green) and compete internationally. Sustainable energy is now a mandatory criteria for FDI future investment to address Carbon Neutral Policy i.e. securing new jobs and retention of existing employment. Most EU member states have chosen to give priority to large ETS manufacturing in access to subsidised sustainable renewable energy, primarily renewable gas, as industry needs gas. Ireland has a legally binding target to achieve 16% of gross final energy demand from renewable sources by 2020 under the EU Renewable Energy Directive (2009/28/EC).

2 Irish government introduced a 12% target for renewable heat by Only 6% achieved to date. Ireland may need >12% renewable heat to meet the overall 16% renewable energy target due to shortfall in renewable transport energy from biofuels. Currently 99% of biodiesel receives a double credit (for using waste fats and oils) towards meeting the 10% renewable transport target. However the double credit doesn t apply to the overall renewable energy target of 16%. Renewable Gas: Biomethane (Renewable Natural Gas) is one of the most cost effective, versatile and indigenous renewable energy sources available in Ireland that can utilise the existing National Natural Gas Network without any need for infrastructure investment. Biomethane production provides a double benefit of contributing significant Green House Gas (GHG) savings from avoided GHG emissions in Agriculture and Waste processing. Bio-LPG is one of the most cost effective and versatile renewable energy sources available in Ireland for existing LPG and off the gas grid customers. Biomethane and Bio-LPG offer the same secure supply, high efficiency, on-demand heat or combined heat & power (CHP) for the customer, and require no investment, risk or change to the customer s equipment or facilities. There are significant indigenous resources such as biowaste, agricultural manures and additional grass silage in excess of livestock requirements which can be used to produce large quantities of biogas, while diversifying farming incomes, supporting rural economies and employment. Highlighted in the European Commission Report on When biogas is purified to 98% methane (referred to as biomethane) it can be used in the same manner as natural gas and can be injected into the gas grid to provide green gas for energy consumers. Biomethane injection to the natural gas grid has been supported in many EU countries and has proven to be an effective and economic renewable energy technology. Overview / Background The Department of Communication, Climate Change and Environment (DCCAE) have held consultations on Renewable Heat Support Scheme for Ireland in recent times on 9 different technologies. A separate economic assessment on the benefits of biogas and Biomethane was commissioned and managed by SEAI on behalf of DCCAE. The RGFI have been very proactive in participating in the various consultations and submitting inputs from the biogas industry in a positive and solution focused manner.

3 Recently, the DCCAE announced the RHI for Ireland, Renewable Heat Support Scheme (RHSS) which is proposing to provide financial supports to solid biomass for renewable heat. Public announcements by Minister Naughten and DCCAE officials have clarified that solid biomass used to generate renewable heat will receive state aid subject to EU approval. The volume of solid biomass required to satisfy the renewable heat target means that in excess of 80% of the solid biomass will be imported from Georgia, USA. We believe that renewable energy policy should be supporting the core economic activities and drivers, such as the pillar industries in Ireland of manufacturing and processing sectors in the agrifood, beverages, biopharma and bio medical devices. Other important industrial and commercial sectors such as IT, ICT and data centres are actively seeking secure supply of renewable natural gas Biomethane. With current policy it is only the services sector interests that is being support, which is not fundamental or core to our economy. Potential for Biomethane in Ireland The RGFI believes that there are more sustainable and competitive means of achieving the renewable heat targets, by utilising the resources within the agri food sector as outlined in the EU commission report that shows Ireland could be a net exporter of biomethane by maximising the use of own resources. European Commission Report: Optimal use of biogas from waste streams, an assessment of the potential of biogas from digestion in the EU beyond ond_2020_final_report.pdf The wider economic and environmental benefits of utilising agri residues, excess crops, rotation and catch crops along with cattle slurry and manures would be significant in reducing the GHG emissions from agriculture, creating a circular economy and a valuable indigenous biogas industry, leading to security of supply. Renewable gas, Biomethane supply can be utilised in various sectors to decarbonise energy in heat/thermal, renewable electricity generation in CCGT, transport public, private sector and HGV haulage. The provision of renewable gas injection into the grid can utilise existing infrastructure, existing high efficient technology, all at low cost to the citizens, industry and commercial gas consumers. The existing high efficient use of gas can achieve efficiencies of up to 90% in using HE CHP s in industrial and commercial sector, with condenser gas boilers achieving 90% plus efficiency in the domestic sector. Business and domestic consumers make decisions on their energy sources for the long term. By excluding renewable gas, i.e. Biomethane and BioLPG in the proposed the first phase of the proposed RHI (RHSS) essentially locking out energy users into investment decisions that will fundamentally alter the market in Ireland and will place the roll out of Biomethane and BioLPG technology in jeopardy.

4 The DCCAE has made the decision to end the grant for high efficiency gas boilers, we feel this is discriminatory and demonstrates the prejudice towards the gas industry, blatantly ignoring the savings that can be made by citizens switching from coal or oil boilers to LPG and Natural gas, in time using renewable gas of Biomethane or BioLPG. Furthermore it has implications on the gas supplier s ability to encourage citizens to switch from coal or oil to BioLPG or Biomethane in the short or long term. The RGFI Position paper outlines the ambition to have 11.5TWh of renewable natural gas in the gas network by 2030.as referenced previously a European report on renewable gas growth projections across Europe, highlighted Ireland as having the highest potential per capita, estimating that 13TWh by 2030 is achievable. Carbon Tax to support Renewable Gas (RNG) The Irish gas consumer pays 126 million in carbon tax on gas consumption per annum, it is appropriate and legitimate that DCCAE allocate the carbon taxes collected from gas consumers to support the renewable gas. The RGFI is formally requesting the DG Competition in supporting our position in calling for the Carbon Tax paid by gas consumers on their use of gas, to be utilised as a fund to financially support the decarbonisation of gas through supporting the development of renewable gas production. We believe this is concept is in practice in some EU member state such as France. Currently the Industrial and Commercial gas consumers are paying in the region of 126 million in Carbon Tax for using natural gas. The RGFI as an industry forum representing the interests and an advocacy for Industrial, Commercial and Domestic gas consumers, is seeking the DCCAE to set out fair and equal treatment for the gas consumers by securing the Carbon Tax paid by gas consumers and ring fence these funds for the provision of financial supports towards development of renewable gas projects. This would provide gas consumers with an alternative and secure indigenous supply of renewable gas (Biomethane). We believe that it is in the interest of all gas consumers to utilise the Carbon Tax fund for the support of renewable gas projects. Currently we have demand from gas consumers for renewable gas to decarbonise their existing energy technologies, and Ireland has significant ability to produce an indigenous renewable gas Biomethane from resources as highlighted in the European Commission Report. Deliverables from an Indigenous Renewable Gas The economic benefits of supplying Biomethane for heat/thermal use in industry, commercial and domestic markets, power generation using CCGT, transport use in public transport, HGV haulage, can be ensure the following; Sustainability,

5 Competitiveness Displacing fossil fuel. An indigenous renewable gas industry will create additional employment, Safe guard inward investment, Future proof the manufacturing and processing sectors in industry. The environmental benefits of producing Biomethane for use in heat/thermal in industry, commercial and domestic markets, power generation using CCGT, transport use in public transport and HGV haulage can improve the following; Clean Air strategy Reduced health costs Improved soil quality using digestate Displacement of artificial fertilisers Improved water quality. No PM 2.5 or PM 10 Regulated Environment The gas industry in Ireland is highly regulated under the Gas Act 1976, the renewable gas production of Biomethane will come under this regulation. The renewable gases including but not limited to Biomethane and BioLPG will be regulated under the Gas Act 1076, where there are existing rigorous guidelines on safety and environment, policy and net balancing requirements, with no opportunities of gaming the support scheme. Under the Gas Act 1976, the biogas/biomethane producers will be regulated, with licencing and permits issued. The gas production is a highly regulated industry, with existing standards that meet EU Standards and have to operate under the Gas Act 1976 (amended 2014). Current standards recognise and reflect the European Commission and the Joint Research Council recommendations, Urban Clean Air and Clean Energy Winter Package. The EPA have emissions values set for Biomethane. We believe that the DCCAE are putting perceived barriers in place and are unintentionally blocking the progression of the renewable gas industry due to lack of knowledge. In recent correspondences with DCCAE the responses received by RGFI from DCCAE highlights several critical miss representations of gas technologies, standards and industry applications, which by its nature indicates the lack of engagement with the National gas industry experts and is relying on consultants that have very limited knowledge or expertise of the gas and renewable gas industry. Inclusion of EUETS

6 The RGFI favours the inclusion of the ETS sector in the proposed Renewable Heat Incentive (RHI) or its renaming to Renewable Heat Support Scheme (RHSS) for a number of reasons. 1. The main focus of the RHI or RHSS should be to meet Ireland s RES-H obligations and the RGFI is concerned that narrowing the RHSS to exclude the ETS sector would jeopardise Ireland s chances of meeting its mandatory targets. 25% of the total national emissions are associated with the ETS sector, and the non-ets industrial sector accounts for only 3% of total national emissions. 2. Other EU countries have not excluded EUETS users puts large Irish industrial companies (large employers, exporters and contributors to the Irish economy) at a competitive disadvantage. Energy Efficiency The option to select Renewable Gas is not on the default settings for Building Energy Rating (BER) Certification for the domestic sector. All other technologies are listed in the default settings. This further demonstrates the purposeful exclusion of renewable gas as a recognised and viable alternative decarbonised energy. For industrial and agricultural heat users the ISO50001 is the preferred benchmark as it is a certification scheme, accredited and recognised as a credible international standard. Minimum Technology Requirements Gas high efficient CHP and gas condensing boilers accreditation (already used as a mechanism for excluding carbon tax for gas used in CHP) there is 90% efficiency in gas boilers. The emissions standards are in place. The supply of and use of renewable gas provides for flexibility. The renewable gases will be required to adhere to and operate to the current technology standards, regulations and standards for safety and environment. Auditing credentials of biogas/thermal that no other technology can offer savings to taxpayers in not removing the existing, capable and efficient technology. Replacement of Counterfactual Technologies Currently, SEAI and DCCAE have a 200 million budget allocation to replace counterfactual technologies that still have useful lifetime remaining, incentivising the replacement of oil and gas boilers that are more efficient than the alternative renewable technology, such as heat pumps that cost 4 times more to operate. This SEAI initiative, fully supported and funded by DCCAE, leads to high upfront costs, complex expensive administration costs, excessive costs and a burden on the Irish citizen that will not deliver the desired results.

7 Compare the above expensive, burdensome initiative versus the inclusion of the EUETS sector for cost efficient administration and impact on mitigating fines on missing the RES-H, 2020 Targets. It will cost approximately 40,000 per house for the retro fitting of Heat pump technology. Guarantee of Origin (GOO) The Green Gas Certification Scheme (GGCS) for Ireland will verify and validate the production of renewable gas Biomethane, with the associated greenhouse gas emissions savings, using calculations and methodology adhering to the GHG protocol, WRi guidelines to mandatory GHG reporting and Carbon Disclosure Project (CDP) in Ireland. It is our intention that the GGCS for Ireland will be recognised and accredited by international carbon accounting and reporting agencies, providing confidence and reassurance to the end renewable gas consumers. The full life cycle of the production of renewable gas will be taken into account in the GGCS calculations and methodology, which is being benchmarked against other GOO in EU member states in ensure compatibility and compliance with best international guidelines and GHG Protocol. Renewable Energy Directive II The RGFI have been proactive in putting in submissions to the RED II (recast) and observing the relevant details and criteria in the design and structure of the GGCS for Ireland. We are confident that the renewable gas industry in Ireland can achieve the sustainability criteria as proposed in the draft RED II document. However the RGFI do not want a default position taken when it comes to reporting the actual benefits in GHG emissions savings of using renewable gas Biomethane or BioPLG in displacing fossil fuels in the areas of heat/thermal, renewable electricity generation in CCGT, or use in transport. The gas industry is highly regulated, meaning access to fully accountable figures with the support of accurate and reliable data identifying the areas of end use consumption, therefore accurately and reliably allocating the relevant GHG emissions savings, fossil fuels displacement to the relevant sector, i.e. heat/thermal, renewable electricity generation or transport use. All other renewable technologies to demonstrate compliance with the environmental sustainability criteria from source, and not port of arrival in the EU member state. The RGFI wants a fair and equal treatment on the full life cycle assessment of the each technology covered by the proposed RHSS for Ireland. Conclusion The Renewable Gas Forum Ireland believes that with the right policy and supports for renewable gas of Biomethane for grid injection from DCCAE, as energy and environment are co-located within the

8 same department, where significant progress can be achieved in displacement of fossil fuels by using renewable natural gas Biomethane in the heat/thermal sector, power generation using CCGT and in public transport. We believe that Irish Government have not considered the wider economic and environmental benefits of utilising the existing resources and waste streams as outlined in the European Commission Report on Optimal use of biogas from waste streams, An assessment of the potential of biogas from digestion in the EU beyond 2020 for production of renewable gas, i.e. Biomethane. The decarbonisation of gas supplied for use in the heat/thermal, power generation and transport sectors would lead to significant benefits to clean air, improved soil nutrition, improved water quality, reduced health costs, indigenous renewable gas industry, revenues from an indigenous biogas industry, security of supply, decarbonisation of agriculture produce, future proofing farming, Carbon neutral manufacturing and processing, leading to better sustainability and competitiveness. To this end the Renewable Gas Forum Ireland request is to engage with the Irish Government Departments in a consultative, professional manner, solution based approach to delivering the best value for money to the Irish citizen, who will benefit from the economic and environmental deliverables of a robust fully functioning and supported indigenous renewable gas industry. Yours Sincerely, PJ McCarthy. Chair Renewable Gas Forum Ireland pj@renewablegasforum.com

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