Renewable Heat Obligation

Heat-related greenhouse emissions arise directly from the combustion of fossil fuels in our homes, businesses and in the industry sector and account for approximately 40% of our total energy-related emissions.

In 2024, over 90% of Ireland’s heat demand was met using fossil fuels, with a renewable energy share for heat at just 7.9%, which is among the lowest share of renewable heat in the EU.

Despite the efforts of many households and businesses to add insulation, install more efficient technologies, and use less fossil fuels, Ireland continues to have an excessive dependence on fossil fuels for heating. As Ireland imports most of its fossil fuels, our heating sector is also a significant contributor to Ireland’s high energy import dependency.

Ireland is committed to reaching a legally binding target of climate neutrality by no later than 2050, and a cut of 51% in greenhouse gas emissions by 2030. Under the Renewable Energy Directive III, Ireland also has ambitious renewable energy targets for heating, and achievement of these targets will be extremely challenging.

To support the decarbonisation of Ireland’s heat sector, Government has agreed to the introduction of a Renewable Heat Obligation (RHO). Once introduced, the RHO will obligate suppliers of fossil fuels used for heating to ensure a proportion of the energy they supply is from a renewable source.

The primary objective of the RHO is to be a key element in Ireland achieving its RES-H targets by driving an increased use of renewable energy in the heating sector and to support a reduction in emissions in line with Ireland’s climate ambitions. Additional objectives include stimulating the production of indigenous renewable fuels, to help diversify our energy sources and strengthen our energy security of supply.

Stakeholder engagement has been fundamental feature of the design and development process of the RHO.

In October 2021, the first RHO public consultation was launched seeking views from interested parties on potential introductory obligation rates, fuel availability, final target rates and duration of the obligation. In August 2023, a second public consultation was launched which focused on a final scheme structure, fuels eligible for certification, and scheme governance arrangements.

To ensure the development of the scheme was underpinned by a robust evidence base, extensive sector engagement was also carried out throughout the design process, including dedicated workshops tailored to the gaseous, liquid and solid fuel markets. Participants included heating fuel suppliers, renewable fuel developers, relevant government departments and key industry groups.

A summary of the topics discussed, and copies of each workshop's slides can be found below.

When designing the scheme, feedback received as part of each consultation process and stakeholder engagement activity was used to inform two phases of technical, economic and social impact analysis on the RHO structure.

In phase one of analysis, a breakdown of national heating energy sources and associated fuel supply chains was reviewed to examine appropriate obligation approaches, measures for compliance, and a suitable target rate and ramp-up trajectory.

Full details and findings from this initial phase of analysis is available in the RHO Phase 1 report completed in 2024.

In phase two of analysis, the likely cost of meeting the obligation, availability of renewable fuels and potential sector competition was examined.

Full details and findings from this final phase of analysis is available in the RHO Phase 2 report completed in 2025.

Results from each phase of analysis informed the Renewable Heat Obligation Bill 2025 which was approved by government on 15 July 2025.

Identified in the National Biomethane Strategy as a key mechanism to create a demand side incentive, the RHO will also support the development of an indigenous biomethane sector.

The RHO General Scheme includes a multiplier for each unit of indigenously produced biomethane surrendered under the scheme. Multipliers are mechanisms for increasing the credit earned for certain types of fuels within an obligation scheme. An additional multiplier would mean that for every unit of domestically produced biomethane an obligated party places on the market, they would be awarded an extra 0.5 RHO certificate.

To ensure no discriminatory practices, or fragmentation of the EU single market, the use of this multiplier requires formal notification to the European Commission

In December 2025, Ireland made formal notification of the proposed use of this multiplier to the EU through the online Technical Regulations Information System (TRIS). Following a three month ‘stand still’ period, this process will conclude on the 30 March 2026.

Introduction of the RHO is a key priority for the Department of Climate, Energy and the Environment. Priority drafting commenced soon after government approval of the Renewable Heat Obligation Bill 2025 is now underway. Once drafting is finalised, the scheme will then be submitted to Government seeking approval to publish and begin the enactment process, ensuring legislation is in place to underpin administration of the scheme.

The National Oil Reserves Agency (NORA), appointed as RHO scheme administrator, is now developing detailed scheme terms and conditions and undertaking on-going engagement with obligated parties and key stakeholders.

Further detail in relation to scheme development, including RHO information and briefing sessions, is available on the NORA website at: RHO Resources | NORA