Data-driven insights to fuel Ireland’s low-carbon heat transition
Client Challenge
Decarbonisation of heat is important to meet Ireland’s commitment to achieving European Renewable Energy targets and Net Zero emissions by 2050. It's also important for diversifying Ireland’s reliance on fossil fuels for heating and potentially realising wider economic, environmental and societal benefits.
Heat accounts for approximately 40% of Ireland’s total energy use and the heat sector is also responsible for around 20% of Ireland’s energy-related CO₂ emissions, with a significant portion still coming from fossil fuels.
To advance their net-zero transition, the Department of Climate, Energy and Environment (DCEE) and the Sustainable Energy Authority of Ireland (SEAI) wanted support to design the Renewable Heat Obligation (RHO) in Ireland. This obligation would require traditional (fossil fuel) suppliers to support and/or deliver renewable heat alternatives alongside their products.
While similar renewable fuel obligations are established in the transport sector, applying them to the heat sector is new and complex. The Government needed a understanding of the potential targets, energy flows, supply chain dynamics, split of indigenous and imported fuels, scalability, timescales, and cost implications of various policy options.
Ricardo’s Solution
Ricardo provided analysis to support the development of Ireland’s Renewable Heat Obligation.
Our work included:
- Fuel eligibility assessment: We evaluated a range of renewable fuels including biogases, bioliquids, and biomass solids for their suitability to be included under the obligation.
- Stakeholder engagement: We conducted interviews and workshops with key stakeholders, primarily fuel suppliers, to understand current supply chain capabilities and challenges. This included both indigenous and imported fuels, with a focus on scalability and viability.
- Economic modelling: We developed future cost scenarios for bioenergy to inform economic modelling of the RHO.
- Policy development and modelling: We modelled fuel flows and costs associated with different levels of renewable heat obligation and extent of certificate trading between fuel types.
Client benefit
Our evidence-based approach provided DECC and SEAI with the insights needed to design a robust and scalable policy framework.
Ricardo’s analysis informed the Irish Government’s decision to proceed with the Renewable Heat Obligation. Minister for Climate, Energy and the Environment, Darragh O'Brien, secured government approval to introduce the RHO. The government has begun drafting the Renewable Heat Obligation Bill 2025, which will establish the legal framework for implementing the scheme in 2026.
This marks another step forward in Ireland’s transition to a low-carbon energy system, with Ricardo’s work playing a role in shaping national policy.