European Parliament adopts RED III: a 42.5% renewables target, new rules for biomass and transport fuels

On 12 September 2023, at its plenary session, the European Parliament adopted the revision of the Renewable Energy Directive (RED III), in line with the compromise agreed with the Council on 30 March. The binding target for the renewables share in gross final energy consumption in 2030 is 42.5%, and the additional 2.5 percentage points are indicative, which allows it to reach 45%. The vote closes the stage in Parliament; now the text must still be approved by the Council. For biogas and biomethane, the provisions on biomass, transport fuels and certification are the most important.

What is changing

The directive changes many areas at once. For the renewable gases sector, the following are important:

• Transport: countries choose a target of 29% renewables in transport or a 14.5% reduction in emission intensity; together, advanced fuels and RFNBO are to reach at least 5.5% in 2030,
• Industry: 42% of hydrogen is to come from RFNBO by 2030 and 60% by 2035,
• Biomass: tightened sustainability and emission-saving criteria, additional restrictions on forest biomass and requirements concerning support,
• Fuel tracking: the Union Database will cover not only liquid biofuels but also gaseous fuels, which will make it easier to check the origin of biomethane,
• Procedures: shorter permitting deadlines and recognition of renewable energy projects as being in the overriding public interest.

For the industry, the list of feedstocks from which advanced fuels can be produced (Annex IX) is important, because it decides which biogas installations will count towards the transport targets.

Significance for the industry in Poland

In Poland, transposition of the directive will be an opportunity to put in order the rules on biomethane, guarantees of origin and transport fuels. The domestic industry should make sure that national rules maintain the preferences for waste feedstocks and residues, while not closing the road to agricultural biogas plants that meet the sustainability criteria. This year the legislator has already adopted the first rules on biomethane (the Act on Renewable Energy Sources of August), but RED III will bring further requirements.

Farmers and investors should pay attention to the requirements for documenting the origin of feedstocks and the emissions balance. Biomethane sold to transport or industry will have to have this documentation in full.

What to pay attention to

Companies planning to sell biomethane to transport should follow the development of the national fuel database and the way it is integrated with the Union database. Certification in schemes recognised by the Commission, for example ISCC, will also be useful, as it makes it easier to demonstrate compliance with the criteria.

What next

The Council is to approve the directive in October. The document will then be signed and published in the Official Journal of the EU, and Member States will have about 18 months to implement it.