EU energy ministers reach agreement on RED II revision

EU energy ministers today reached a common position on revision of the bloc's 2018 Renewable Energy Directive (RED) II, a forthcoming recast know as RED III, including on a target for renewables' share in transport and for flexibility in ambitions for advanced biofuels and renewable fuels of non-biological origin (RFNBOs) such as hydrogen.

Meeting today in Luxembourg, ministers said there should be a 29pc share of renewables in transport, and a 40pc overall renewables target share for 2030.

To become EU law, ministers need to agree a final legal text with the European Parliament, which has made moves towards increasing the overall target share of renewables to 45pc in line with the European Commission.

Parliament's energy committee will vote on a draft text in July and the whole parliament will decide in September.

Among discrepancies between the ministers and the commission are the former's desire to cut, to 35pc, the target share for RFNBOs in terms of industrial consumption for final energy and non-energy purposes of hydrogen. The commission has proposed 50pc, which EU states are open to by 2035. The ministers want to ensure national support for RFNBOs and hydrogen in industry does not result in net pollution increases arising from increased demand for power generated by "the most polluting fossil fuels, such as coal, diesel, lignite, oil, peat and oil shale". Gas-generated hydrogen is not mentioned as a source of pollution.

The text includes provision for countries to agree, via specific co-operation agreements, on accounting for hydrogen and other RFNBOs consumed in one state to count towards the share of gross final consumption of energy from renewables in the EU country where they were produced. The normal rule would be when calculating the renewables share, RFNBOs are counted in the sector where they are consumed (electricity, heating and cooling, or transport). The renewable electricity to produce these fuels would not be included, to avoid double-counting.

Renewable fuels including biofuels and hydrogen used for maritime bunkering should be included in the specific transport sector's target, to boost renewable fuel uptake in the hard-to-decarbonise sector.

Ministers also want an option where countries would have to oblige fuel suppliers to ensure transport fuels obtain a certain greenhouse gas (GHG) intensity cut, compared with a baseline, or reach a share of at least 29pc renewables in transport by 2030. The commission last year proposed increasing the EU's 14pc target share for renewables in the transport sector by 2030 to around 26pc, based on a 13pc reduction in the sector's GHG intensity.

For advanced biofuels and biogas, ministers want their share in transport to reach at least 0.2pc in 2022, as the commission has proposed, and to increase to 1pc in 2025 and 4.4pc (instead of the commission's 2.2pc) in 2030. For RFNBOs, including hydrogen, the ministers' 2030 target share for the transport sector is 5.2pc instead of the commission's 2.6pc, but this is no longer binding on member states.

Ministers want a continued provision where countries can increase the limit of so-called part B annex IX feedstocks, notably animal fats and used cooking oil, above the existing 1.7pc cap. As currently, countries would have to justify this and subject any decision to commission approval. These feedstocks and advanced biofuels, including RFNBOs in transport, would be considered to be twice their energy content.

Ministers want to count renewable electricity four times its energy content when supplied to road vehicles and 1.5 times when supplied to rail transport. Advanced biofuels, biogas and RFNBOs including hydrogen supplied to aviation and maritime sectors would be considered to be 1.2 times their energy content.

The ministers did not diverge from the commission on everything. They confirmed general support for mainstreaming renewable energy in industry with a non-binding average minimum annual increase of at least 1.1 percentage points to 2030. For heating and cooling, ministers want minimum annual average binding increases of 0.8 percentage points between 2021 and 2025 rising to 1.1 percentage points to 2030.

Ministers maintained a proposal that would allow suppliers of renewable electricity to electric vehicles, through public recharging stations, to receive credits and sell those to fuel suppliers to meet renewables obligations.

Countries would still have a provision where the national renewable transport target could be reduced if they decide to cap food and crop-based biofuels at a limit lower than the EU's 7pc maximum, ministers said, and their text maintains the commission's proposed increase of the maximum bio-based components in diesel fuel, up to 10pc from 7pc of fatty acid methyl esters (Fame).

Member states will have to implement the revised RED III by 31 December, 2024.

By Dafydd ab Iago