Minister O'Brien secures Government approval for the Renewable Heat Obligation Bill 2025
- Published on: 18 July 2025
- Last updated on: 18 July 2025
Government reaffirms its commitment to support the indigenous biomethane sector
Minister for Climate, Energy and the Environment Darragh O'Brien has secured Government support for the introduction of the Renewable Heat Obligation Scheme (RHO), and approval to commence drafting of the Renewable Heat Obligation Bill 2025. The Bill will provide a legislative basis for administration of the scheme next year (2026).
Set to be in place until 2045, the RHO will obligate suppliers of fossil fuels used for heat to demonstrate a proportion of the energy they supply is from a renewable source. This will support emissions reductions in our heat sector and contribute significantly towards meeting our national climate and energy targets.
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.
Supporting our indigenous biomethane sector
In addition to approving priority drafting of the Bill, the Government also reaffirmed its commitment to supporting the indigenous biomethane sector. Identified as a key renewable fuel under the scheme, biomethane will provide a significant contribution as we look to diversify Ireland’s gas supply. Biomethane 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.
The Bill includes a specific measure to provide support to indigenously produced biomethane, encouraging obligated parties to procure supplies from domestic producers. This measure will be subject to formal notification at EU level and require justification for its inclusion. In tandem with the drafting process, the Department of Climate, Energy and the Environment will engage with the EU Commission to ensure compliance with EU Single Market rules.
Informed by extensive analysis and stakeholder engagement, the RHO Heads of Bill sets out the necessary functions and provisions of the recently appointed scheme administrator – the National Oil Reserves Agency (NORA). The Bill provides detail on opening obligation rates of 1.5% in year one, and 3% 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.
Minister O'Brien said:
“I welcome the support shown for the introduction of the RHO, and input received from key stakeholders as part of the design process across the last number of years. Insights shared have provided valuable information – ensuring we provide the required level of support to our newly emerging renewable fuel markets and appropriately manage the resulting impact on end-consumers.
As we begin the drafting process over the course of the next few months, my officials intend to maintain ongoing engagement at EU level – to ensure the scheme is fully aligned with EU trade principles.
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.”
ENDS