6 days ago
Government approves Renewable Heat Obligation Bill to curtail reliance on fossil fuels
Suppliers of fossil fuels used for heat, notably in industry, will soon be obliged to demonstrate a proportion of energy they supply is from a
renewable source,
following Government approval of a
renewable heat obligation (RHO) scheme
.
Legislation is due to come into force next year and apply until 2045. The RHO is designed to increase Ireland's renewable share in heating and cooling under the EU renewable energy directive.
'This will support emissions reductions in our heat sector and contribute significantly towards meeting our national climate and energy targets,' said Minister for Climate and Energy
Darragh O'Brien
on Friday.
'As Ireland imports most of its fossil fuels, the heating sector is a significant contributor to Ireland's high energy import dependency. The RHO will help to reduce our reliance on imported fossil fuels and strengthen our energy security,' he added – the heat sector including residential homes generates more emissions than the electricity sector.
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In a move to support an indigenous sector for biomethane, it will be the key renewable under the scheme – and be generated from agricultural and food wastes as well as biocrops.
'Biomethane will provide a significant contribution as we look to diversify Ireland's gas supply,' Mr O'Brien said.
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Production activity will largely occur in rural areas, with the potential to develop a sector of significant scale to benefit the rural economy in Ireland, he added.
The Bill requires support for indigenously produced biomethane, 'encouraging obligated parties to procure supplies from domestic producers'. The Department of Climate, Energy and the Environment will engage with the EU Commission to ensure compliance with EU Single Market rules.
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In drafting the legislation, the Minister has set out necessary functions and provisions of the recently appointed scheme administrator – the National Oil Reserves Agency.
The Bill provides detail on opening obligation rates of 1.5 per cent in year one, and 3 per cent in year two. While no final target level has been set, obligation rates are expected to increase ambitiously following a full scheme performance and market review in year three.
Mr O'Brien said stakeholder input had helped ensure 'we provide the required level of support to our newly emerging renewable fuel markets and appropriately manage the resulting impact on end-consumers'.
Ireland's renewable heat penetration at 7.9 per cent is the lowest in the EU, lagging behind the EU average of 25 per cent and comparing unfavourably with member states such as Denmark with more than 50 per cent.
Residential heat demand in Ireland remains highly dependent on fossil fuels. In 2023, 90 per cent of residential heat came from fossil fuels, exposing Irish households to the twin risks of security of supply and cost inflation while also contributing to greenhouse gas emissions.
Transitioning Irish homes and businesses from natural gas and oil to renewable energy sources, particularly domestically produced fuels, is being pursued by the Government to address issues across security of supply; affordability and renewables penetration.
