With the publication of the Fit for 55 Package in July 2021, the revision of the Renewable Energy Directive aims at ambitiously driving the decarbonisation of the energy system, including transport. FuelsEurope welcomes the transport target expressed in terms of GHG reduction, as it is more effective in stimulating the deployment of alternative fuels. This revision creates the best opportunity to make it the primary regulatory instrument to drive the effective and efficient decarbonisation of road transport fuels.
We welcome the Renewable Energy Directive III as the policy instrument to promote renewable energy in the electricity, heating & cooling, and transport sector. We believe transport can play an important role in achieving the EU-wide renewable energy target by the use of renewable transport fuels
Incentives for developing technologies and sustainable feedstock flexibility
Effective regulatory mechanisms should be put in place to allow the development of multiple solutions for the progressive decarbonisation of transport through the adoption of renewable and RED-consistent technologies (e.g. sustainable biofuels, e-fuels/synthetic fuels, renewable and low-carbon hydrogen, renewable electricity, recycled carbon fuels, etc). This requires that during the time needed to develop scale-economy and reduce costs, less technologically mature and relatively expensive solutions can compete with those already established.
Ensuring an inclusive economic development of regions with access to a different source of potential sustainable feedstocks, based on criteria established in the framework of the RED, is also deemed essential. It will not only be key to meeting the ambitious decarbonisation goals in transport but will also boost regional development, and job creation and enhance the security of supply across all of Europe.
Support for investments
Regulatory certainty and predictability are essential conditions for investors to engage in high-risk projects: during the time needed to develop a scale economy and reduce costs, less technologically mature and relatively expensive solutions must be able to compete with those already established. Where mandates are used, particular care is required in setting targets that should be realistically achievable. While mandates can create a market for alternative fuels, including low-carbon fuels, and provide a supportive policy framework, they do not necessarily provide on their own an investable framework. Legislation should leave sufficient flexibility to achieve the overall objective in the most effective way.
Interaction with other policy instruments
Dedicated measures in marine and aviation legislations are being put in place through the ReFuelEU Aviation and FuelEU Maritime regulations currently being discussed in the context of the Fit For 55 package. Beyond the current RED II, which recognises renewable fuels used in aviation and shipping to contribute to the transport target, the RED III revision is expanding the scope of the directive toward “all transport modes”. In this context, FuelsEurope believes that RED III and its related Delegated Acts should act as an umbrella for consistency across different pieces of legislation. Overlapping policy instruments should be avoided and therefore FuelsEurope calls for the discontinuation of the FDQ/7A which should be replaced entirely by the revised Renewable Energy Directive.
Read our Fit for 55 recommendations here.