Assessing the cost of biofuel production with increasing penetration of the transport fuel market: A case study of gaseous biomethane in Ireland

Biomethane is an indigenously produced gaseous sustainable transport fuel that uses organic feedstock. Allowing for a realistic collection of organic residues and grass silage from 2.5% of pasture land would allow Ireland to generate 17% renewable energy supply in transport (RES-T) and surpass its 10% target for renewable transport energy by 2020. This would significantly lessen Ireland's dependence on imported fossil fuels, allow compliance with the EU Landfill Directive, and reduce pollution of waterways. Biomethane generated from the organic fraction of municipal solid waste (OFMSW) is the cheapest biomethane (€0.36/L diesel equivalent including for value added tax (VAT) of 21%) This is the least expensive fuel because of the associated gate fee of €70/t. If no gate fee were available the cost would be €1.35/L diesel equivalent including VAT: this underlines the importance of gate fee to what is primarily a waste treatment system. Biomethane from slaughter house waste (SHW) is estimated at €0.65/L diesel equivalent while biomethane produced from grass and slurry is more costly to produce (€1.40/L diesel equivalent). This is still in the cost range of petroleum derived transport fuels at the service station (diesel and petrol prices ranging from €1.38 to 1.45/L in February 2011). OFMSW and SHW can between them provide 1.4% RES-T at a minimum cost of €0.52 /L. To achieve 10% RES-T biomethane will cost a minimum of €1.28/L diesel equivalent. Gaseous fuel can be more competitive by considering a blend of biomethane and natural gas (BioCNG) (e.g. 20% biomethane with 80% natural gas). If natural gas at approximately €0.7/L diesel equivalent is considered, BioCNG will cost €0.82/L at the 10% RES-T target.