Dr. Fiona Thorne:

To address the first set of questions in terms of the concerns and risks, in the opening statement we were at pains to say from a Teagasc perspective that when we are developing an AD industry, we need to be cognisant of sustainability. When we think of the era we are moving into, when an AD industry is going to be developing, it will be in the context of RED II and RED III, and that will take care of the environmental sustainability credentials that we are all governed by within this AD industry. We also need to be cognisant of the economic and social considerations. If we do not take that three-legged stool approach to the AD industry, we will have issues reaching 5.7 TWh.

When I talk about economic sustainability from the Teagasc perspective, I am really talking about the economic sustainability of the farming sector and the business models that will need to be in place. We need to think about competition with existing systems of agriculture and the price of feedstocks that will be required to make that economically sustainable. Learnings that we have from the FLEET project, which is funded by the SEAI, show us there has been a substantial increase in the cost of the grass-based feedstock for the AD industry over the last 18 months in particular, with the increase in fertiliser costs evident at farm level. If we are talking about developing an agri-centric AD industry, the economic sustainability of the farming systems that are in place needs to be observed.

From the FLEET project we have also seen that competition with the existing systems that are in operation at farm level will have a big impact on the economic sustainability and viability of the supply of feedstocks to the AD plants. If we look at the dairy system in particular and the economic returns, the price of feedstocks that are talked about within the industry are not compatible with the level of income we are seeing. To move on from the dairy side to look at the tillage system, it really depends on the price that is on offer, but the increase in the cost of producing silage over the last 12 to 18 months is having an impact there. It is really the beef and the sheep systems, based on economic sustainability on its own, that show there are opportunities within those systems. However, we need to be cognisant of the increase in fertiliser costs and the impact that will have on economic sustainability going forward.