Agriculture remains Ireland’s largest source of emissions, representing over a third (34.3%) of total national Green House Gas (GHG) emissions in 2022. KPMG’s Russell Smyth explores how the sector can help mitigate the impact.

While emissions fell slightly in 2022 (1.2%) this is on the back of a significant increase since 2012 of 14%. The Climate Change Advisory Council (CCAC) indicates that 44% of agriculture’s sectoral emission ceiling for 2021-25 has already been expended in the first two years of the carbon budget period, while the EPA expect the agriculture sector to exceed its first carbon budget (2021 – 2025) by up to 6 million tonnes of CO2eq.

Innovation required

The challenge in decarbonising the agriculture sector is mainly down to the fact that 74% of the emissions in the sector are associated with livestock (enteric fermentation 63% and manure management 11%), which are very hard to mitigate.   

Agriculture, unlike almost every other sector, can’t be fully decarbonised using existing proven technologies, leaving the sector without a credible decarbonisation pathway. KPMG analysis shows that proven technologies exist to achieve only around a 20% emission reduction level at present, and that beyond this, technological innovation or destocking are the only options.

With destocking seen as a publicly and politically unattractive option (KPMG analysis shows that the required livestock reductions to meet a 50% emission reduction would cost the Irish economy over €8.9 billion in lost economic output by 2030), technological innovation will need to deliver much of any emission reduction.

"Agriculture can’t be fully decarbonised using existing proven technologies."

Anaerobic digestion

One such innovation, which is outlined in the Climate Action Plan 2024 and Ireland’s Sectoral Emission Ceilings, is anaerobic digestion (“AD”)

The AD process produces renewable gas (“biogas”) from feedstocks such as manure, food waste and grass silage through the decomposition of the organic material by micro-organisms in large oxygen-free tanks. Biogas can be used locally for heat purposes or for combined heat and power production, or can be upgraded to produce biomethane, which is chemically identical to natural gas.

Biomethane is fully compatible with the Irish national gas network and existing appliances, technologies, and vehicles, and can seamlessly replace fossil gas to reduce emissions in industrial heating, transport, and power generation, whilst assisting the agriculture sector in developing profitable diversification options for farmers and reducing emissions in the agriculture sector. 

Biomethane strategies

Ireland has set a target of producing 5.7 TWh of biomethane by 2030 which will require 120,000 ha (less than 5% of available agriculture land) and winter slurry from approx. 1.3 million cows. The role of farmers, and the rural economy, will be critical to the development of biomethane in Ireland.

Biomethane is already firmly established and available on the European market, with c. 37 TWh produced in 2022. Biomethane has the potential to progressively (albeit not fully) replace fossil gas supplies both at a European and national level.

Ireland lags behind our European counterparts in terms of biomethane production, with only two plants in the Republic of Ireland currently producing biomethane. Currently production meets less than 0.1% of our overall gas demand.

However, the Government is keen to increase the number of plants producing biomethane in Ireland from two up to 150-200 by 2030 to meet c. 10% of our current fossil gas demand.

Ireland’s National Biomethane Strategy was launched in May 2024 and has set a pathway to replace up to 10 percent of the country’s fossil gas needs with biomethane by 2030. It is Ireland’s first major policy statement on biomethane and is a significant milestone in developing an indigenous sector. Its primary goal is to deliver the ambitious target of up to 5.7 TWh of indigenously produced biomethane by 2030, set out in the Government’s Climate Action Plan.

"The development timeline for an AD project is hampered by long waiting times."

No time to lose

If Ireland is to achieve its 5.7 TWh target of biomethane production by 2030 several barriers to development of AD facilities need to be removed. Firstly, the development timeline for an AD project is hampered by long waiting times to secure the licencing and permits required to operate. These can take up to 2 years to secure and relevant bodies such as the EPA need to be provided with the resources required to process a large volume of applications by 2030.

Secondly, developers of AD projects require certainty on gas grid connection costs including financial bond requirements and timelines for delivery. Based on estimates from other European Countries, costs of gas grid connections in Ireland are 3 – 4 times higher, which leads to higher costs per unit of biomethane in Ireland.

Finally, the biomethane sector needs certainty. Ireland has been discussing and assessing potential supports for biomethane for close to a decade now. Policy needs to detail the next steps for potential developers and farmers so the sector can develop in confidence.  

Get in touch

If you have any queries about decarbonisation in the Agribusiness sector, please contact Russell Smyth of our Sustainable Futures practice. We'd be delighted to hear from you.

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