Paul Deane: How agriculture could fuel Ireland's journey towards energy independence

There's no fast track to sustainability — but we can take steps now to quit being a mere bystander in global energy markets

Irish motorists may rail against homegrown levies such as the carbon tax — but the price of our petrol and diesel is largely determined by net energy producers, principally OPEC+. Picture: Jane Barlow/PA

If you are planning on driving to your staycation this month you will be disappointed to hear that the price of a litre of diesel has hit a six-year high. 

Pump prices are a helpful barometer of the state of the world around us, often reflecting political events that happen far from our shores, with the most recent increase driven by a surge in international oil prices. 

In Ireland, the Government has strong ambitions for climate action and eliminating fossil fuels from our economy, but moving away from oil is likely to be our greatest challenge.

We travel a massive amount each year in Ireland — over 35bn km in fact — and diesel is the dominant road fuel accounting for 80% of sales.

Carbon tax is only a small part of energy price

CLIMATE & SUSTAINABILITY HUB

The price we see at the pumps typically tracks international oil movements lagged by several weeks. But the price of a barrel of oil is only one side of the story as taxes — particularly excise tax which is a fixed amount — account for approximately 60% of final prices. 

The Government raises over €1.5bn on excise duty on petrol and diesel and it is an important source of revenue. The carbon tax which increased in May to €33.50 is often a political lightning rod, but its impact is smaller than international prices and adds approximately €100 to a typical annual travel budget.

OPEC has far more influence on our prices

Saudi energy minister Abdulaziz bin Salman Al-Saud has far more influence on our oil prices than our own transport minister. Our response to rising oil prices should be to support policies that would speed up Ireland's move to being a renewable energy producer. Picture: Fayez Nureldine/AFP/Getty

It may be tempting to blame Transport Minister and Green Party leader Eamon Ryan and green policies for the increase in pump prices but this is not the case. Mr Ryan has little influence on what we pay for petrol and diesel in Ireland. Like most other countries, we pay the international price set by global producers.

One of the most influential producers is Saudi Arabia and people such as Prince Abdulaziz bin Salman, its minister for energy, has a marked influence on what we will pay for travel for our holiday trips this summer.

He is arguably the most powerful person in the world of petroleum and holds sway over a vast amount of oil.

As one of the largest and most cost-effective oil producers in the world, Saudi Arabia's strategy has been to adjust national oil production to influence global prices. It is a strategy that works — and Ireland, as a country that uses so much energy and produces so little, will remain as a bystander to this global exchange.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, agreed a deal two weeks ago to increase oil supply from August, and this should hopefully reduce prices later in the month.

Ireland must play to its strengths

While Mr Ryan has little influence on the price we pay, he can influence the options we have.

The Government plan for climate action has positive measures on electric cars, cycling, public transport, and remote working.

Ireland already has some of the most generous supports in the world for electric vehicle purchase. In total, the average electric vehicle buyer receives a direct subsidy from the state of over €10,000.

Even with all these measures though, moving away from oil in transport will take time and there is a need to be realistic. 

Even under optimistic scenarios, Ireland will be using oil for the next two decades and so diluting the carbon content of fossil fuels with renewable fuels makes sense.

Our abundant sources of renewable energy

Here Ireland can play to it strengths as a country that has large potential to produce renewable gas from grass and agricultural wastes, a fuel which can be used to power trucks and long-distance travel, an area where electricity will find it difficult to reach.

We have an active ecosystem that is ideal for growing grass and an agricultural system that produces ample cattle slurry providing a strong starting platform for an indigenous renewable gas industry in Ireland.

It would offer benefits for Irish farmers and its production and distribution can help to diversify Irish agriculture, especially in less advantaged areas.

We must enforce sustainability criteria

Such a move requires two important elements including political and policy support which currently is not adequate. It costs twice as much to produce renewable gas than natural gas, although this is quickly changing.

It would also require a strong commitment to enforce existing sustainability criteria ensuring environmental integrity is maintained across the fuel cycle.

Like moving away from oil, we also must be realistic about the potential for producing renewable gas and transport fuels. It is not a silver bullet or the full solution to our reliance on oil, but it can play a role in moving us towards our energy and climate goals.

Producing our own fuels for trucks and buses from cow slurry and wastes doesn’t have the same glamorous appeal as electric cars, but if done correctly can be just as important in our journey away from fossil fuels.

• Paul Deane is a senior research fellow in the MaREI Centre, University College Cork