Fuelling Change: The distributional and climate impacts of farmers supplying biomethane feedstocks in Ireland

Farmers in the EU are the leading suppliers of feedstocks for biomethane production, a renewable energy source that can replace fossil gas in hard-to-abate sectors. However, the distributional impacts on farmers have not previously been explored. Understanding these helps ensure the EU’s biomethane targets are met in a just way. In our case study of dairy and cattle farms in the Republic of Ireland, we investigated the distributional impacts of farms supplying grass silage and livestock slurry for biomethane production. Using microdata from the Irish National Farm Survey, we built a microsimulation model to estimate the impacts of different farms providing the biomethane feedstocks required to meet Ireland’s national biomethane target. Our results show that low-income (largely cattle) farms stand to benefit economically from supplying biomethane feedstocks, decreasing inequality among farmers by 3.4%. However, since the farms switching away from livestock were low-intensity farms, this scenario also led to an intensification of overall livestock farming. In contrast, if the highest emitting farms switched to supplying biomethane feedstocks, they experienced a sizable drop in income, and a 2.0% increase in inequality. At the same time, this scenario saw the highest decrease in emissions at the lowest marginal abatement cost. Nevertheless, the marginal abatement cost remained above €400, higher than the estimated 2030 carbon shadow price for Ireland. These results demonstrate that agricultural biomethane feedstock cultivation can contribute to a just energy transition. However, it is a high-cost abatement option, and there is likely a trade-off between reducing inequality and other benefits.