A third version of the EU Renewable Energy Directive has now been adopted (RED III). The aim of the directive is to gradually bring the European Union towards its climate objectives. The directive stipulates that at least 42.5% of the energy used in the EU must come from renewable sources, with 45% as a target in 2030. Specifically for transport, Member States are given the choice to focus on CO2 emission reductions or on the use of renewable energy. This rewards the achievement of CO2 emission reductions in fuel chains based on cost-effectiveness. This is welcome as a principle, but unfortunately does not mean that the system will function properly in practice.
Fossil fuels
The proposed CO2 emission reduction system poses challenges with regard to feasibility and enforceability. The control mechanism can also lead to the use of a relatively limited volume of renewable fuels with a low CO2 intensity, and that relatively many fossil fuels remain in the mix. This may result in a discrepancy between the emission reduction achieved and the nationally attributable CO2 emissions (caused by fossil fuels).
Detriment
Certain categories of fuels or raw materials are also limited with limits or additionally stimulated with sub-objectives. This undermines the principle of cost-effective CO2 emission reduction. This also applies to the use of multiplication factors. As more of these types of interventions are carried out, the added value of CO2 emission reduction decreases.
Continuity
The current system – which is based on energy management and multiplication factors for certain fuels and raw materials – has been tested for years. Much can be said about this system from the point of view of (un)predictability, but this is mainly related to policy choices in the further development of the system (such as the booking authority for aviation and maritime shipping). Continuing management based on energy content, whether or not in addition to a system based on CO2 emission reduction, would contribute to the continuity and predictability of the system and reduce the risk of a decrease in the physical use of renewable fuels.
Clarity
Clarity is needed with regard to the creation of ERE types per sector: it must be possible to account for all sustainable biofuels for each sector. Based on the bill, different EREs can be created for all possible combinations of transport sector (land, inland shipping, maritime shipping, aviation) and type of fuel/raw material (for example conventional, advanced, RFNBO or other). The Transport Energy Decree then determines which types of EUA are actually created. It is very important for companies to know which fuels produce EREs in which sectors.
Achieving the climate goals requires achieving a significant CO2 emission reduction in transport. Unfortunately, the proposed system to achieve this has a number of risks that must be addressed.
Frank Bergmans, policy officer for sustainable development MVO
