Ireland’s Renewable Heat Obligation, launching in 2026, will require fossil fuel suppliers to source a portion of their heat energy from renewable sources. Aimed at reducing emissions and boosting energy security, the scheme also supports domestic biomethane production and rural development as part of Ireland’s broader climate and energy goals.
The Irish Government has approved the introduction of the Renewable Heat Obligation (RHO) scheme, a major policy initiative aimed at reducing emissions from the heating sector and enhancing Ireland’s energy security. The RHO is set to come into effect in 2026 and will run until 2045.
The Renewable Heat Obligation will require suppliers of fossil fuels used for heating to ensure that a proportion of the energy they supply comes from renewable sources. This proportion will start at 1.5% in the first year of the scheme and 3% in the second year, with higher targets expected after a full review in year three.
The scheme is designed to decarbonise Ireland’s heating sector, which remains heavily reliant on imported fossil fuels, and to support the development of indigenous renewable fuels like biomethane.
Support Climate Targets: By incentivising renewable heating, the RHO will play a critical role in achieving Ireland’s national climate and energy goals.
Reduce Fossil Fuel Dependence: With over 70% of Ireland’s energy currently imported, the RHO aims to reduce this dependency and enhance energy security.
Grow the Biomethane Sector: A secondary but significant goal of the RHO is to help deliver the Government’s target of 5.7 TWh of biomethane production per year by 2030—equivalent to 10% of current national gas demand.
The Government has approved the drafting of the Renewable Heat Obligation Bill 2025, which will provide the legal foundation for the scheme. The National Oil Reserves Agency (NORA) has been appointed as the scheme administrator and will be responsible for implementation.
To support the inclusion of domestically produced biomethane, the bill includes a specific measure that encourages obligated fuel suppliers to source biomethane from Irish producers. This measure will require formal notification to the EU to ensure compliance with Single Market rules.
Biomethane production is expected to take place largely in rural areas, creating economic opportunities and supporting rural communities. The production process also offers agricultural benefits, such as reducing carbon emissions from farms and providing alternatives to chemical fertilisers through digestate, a by-product of biomethane production.
The RHO is a key demand-side policy under Ireland’s broader National Biomethane Strategy, which also includes two capital grant programmes to help stimulate biomethane production.
Minister for Climate, Energy and the Environment, Darragh O’Brien, welcomed the support shown for the scheme and insights from the stakeholders, stating that:
‘Approval of the general scheme by Government will now aid investment in our domestic renewable fuel industry, leading to indirect job creation, particularly across the rural economy in Ireland, helping to stimulate and sustain rural communities.’
He also emphasised the importance of ongoing EU engagement to ensure the scheme aligns with European trade principles.
At present, only two biomethane facilities are operational in Ireland, contributing approximately 75 GWh per year—just 0.001% of current gas demand in Ireland. The ambitious target of 5.7 TWh by 2030 will require significant policy support and infrastructure development.
Moreover, the introduction of the Renewable Heat Obligation represents a significant step in Ireland’s transition to a more sustainable and secure energy future. Through legislative backing, administrative oversight, and support for biomethane production, the RHO is poised to deliver economic and environmental benefits—particularly for rural Ireland.
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