Explanatory Memorandum to COM(2021)557 - Amendment of Directive 2018/2001, Regulation 2018/1999 Directive 98/70/EC as regards the promotion of energy from renewable sources - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2021)557 - Amendment of Directive 2018/2001, Regulation 2018/1999 Directive 98/70/EC as regards the promotion of energy from renewable ... |
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| source | COM(2021)557  |
| date | 15-07-2021 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
The European Green Deal (EGD) establishes the objective of becoming climate neutral in 2050 in a manner that contributes to the European economy, growth and jobs. This objective requires a greenhouse as emissions reduction of 55% by 2030 as confirmed by the European Council in December 2020. This in turn requires significantly higher shares of renewable energy sources in an integrated energy system. The current EU target of at least 32% renewable energy by 2030, set in the Renewable Energy Directive (REDII), is not sufficient and needs to be increased to 38-40%, according to the Climate Target Plan (CTP). At the same time, new accompanying measures in different sectors in line with the Energy System Integration, the Hydrogen, the Offshore Renewable Energy and the Biodiversity Strategies are required to achieve this increased target.
The overall objectives of the revision of REDII are to achieve an increase in the use of energy from renewable sources by 2030, to foster better energy system integration and to contribute to climate and environmental objectives including the protection of biodiversity, thereby addressing the intergenerational concerns associated with global warming and biodiversity loss. This revision of REDII is essential to achieve the increased climate target as well as to protect our environment and health, reduce our energy dependency, and contribute to the EU’s technological and industrial leadership along with the creation of jobs and economic growth.
• Consistency with existing policy provisions in the policy area
REDII is the main EU instrument dealing with the promotion of energy from renewable sources. The review of REDII does not stand alone. It is part of a broader exercise that affects other energy and climate legislation and policy initiatives, as announced in the EGD roadmap, and in the Commission work programme for 2021 under the title “Fit for 55 package”. The proposal for the revision of REDII is consistent with:
i. The EU Emission Trading Scheme, as carbon pricing works best hand in hand with regulatory measures.
ii. The Energy Efficiency Directive, which contributes to the efficient use of renewable energy in end-use sectors.
iii. The Energy Performance of Buildings Directive, which ensures appropriate energy performance requirements related to renewable energy.
iv. The Ecodesign Directive, incentivising consumers to move away from fossil fuel appliances.
v. The Land Use, Land Use Change and Forestry Regulation, which provides incentives for economic operators to deploy emission-absorbing projects that can be a source of biomass.
vi. The Energy Taxation Directive, which ensures that prices promote sustainable practices and incentivises production and use.
vii. The Effort Sharing legislation, which establishes binding greenhouse gas (GHG) emission reductions for sectors covered by REDII such as transport, buildings, agriculture and waste.
viii. The Fuel Quality Directive, which supports the use of renewable and low-carbon fuels in transport.
ix. The Alternative Fuel Infrastructure Directive, which supports the deployment of alternative fuels infrastructure, including recharging points for electric vehicles and refuelling points for natural gas and hydrogen.
x. The proposal for a Regulation of the European Parliament and of the Council on guidelines for trans-European energy infrastructure and repealing Regulation (EU) No 347/2013 1 .
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The proposal is based primarily on Article 194(2) of the Treaty on the Functioning of the European Union 2 (TFEU), which provides the legal basis for proposing measures to develop new and renewable forms of energy, one of the goals of the Union’s energy policy, set out in Article 194(1)(c) TFEU. REDII, which will be amended by this proposal, was also adopted under Article 194(2) TFEU in 2018. Article 114 TFEU, the internal market legal base, is added in order to amend Directive 98/70/EC on fuel quality, which is based on that Article.
• Subsidiarity (for non-exclusive competence)
A cost-efficient accelerated development of sustainable renewable energy within a more integrated energy system cannot be sufficiently achieved by Member States alone. An EU approach is needed to provide the right incentives to Member States with different levels of ambition to accelerate, in a coordinated way, the energy transition from the traditional fossil fuel based energy system towards a more integrated and more energy-efficient energy system based on renewables-based generation. Taking into account the different energy policies and priorities among Member States, action at EU level is more likely to achieve the required increased deployment of renewables than national or local action alone.
EU action on renewable energy brings added value because it is more efficient and effective than individual Member States’ actions, avoiding a fragmented approach by addressing the transition of the European energy system in a coordinated way. It ensures net reduction of greenhouse gas emissions and pollution, protects biodiversity, harnesses the benefits of the internal market, fully exploits the advantages of economies of scale and technological cooperation in Europe, and it gives investors certainty in an EU-wide regulatory framework. The achievement of an increased share of renewable energy in final EU energy consumption depends on national contributions from each Member State. These will be more ambitious and cost-effective if driven by an agreed common legal and policy framework.
• Proportionality
The preferred package of policy options is considered proportionate and builds to the extent possible on current policy design. Several options set a target or a benchmark to be achieved, but leave the means to achieve those targets up to the Member States. The balance between obligations and the flexibility left to the Member States on how to achieve the objectives is considered appropriate given the imperative of achieving climate neutrality (see sections 3.3 and 7.5 of the Impact Assessment accompanying this proposal, SWD (2021) XXX).
• Choice of the instrument
This proposal is for an amending Directive. Given its relatively recent adoption, this review of REDII is limited to what is considered necessary to contribute in a cost-effective way to the Union’s 2030 climate ambition, and is not a full revision of the Directive, so a recast is not considered appropriate.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Stakeholder consultations
The Inception Impact Assessment (Roadmap) was published for feedback from 3 August to 21 September 2020 and 374 replies were received, from stakeholders from 21 Member States and 7 non-EU countries. Most responses came from companies or business associations, followed by NGOs, anonymous and citizens. In addition, the Commission launched an online public consultation (OPC) on 17 November 2020 for 12 weeks, in line with the Commission Better Regulation rules. It contains multiple choice and open questions covering a wide range of issues on the revision of REDII. 39,046 replies were received in total. Stakeholder views were also gathered in two workshops, the first one was held on 11 December 2020 (close to 400 participants) and the second one was on 22 March 2021 (close to 1000 participants).
The majority (80%) of replies to the OPC showed a preference for an increased RES target in line with the CTP (43%) or higher (37%). 61% favoured a binding target both at EU and national level. Transport and heating and cooling were the two most popular sectors where additional efforts were considered necessary, with a majority supporting increased targets for both sectors at least at the level of the CTP. A coordinated response of more than 38,000 participants requested removing biomass from the list of renewable resources and limiting the use for bioenergy to locally available waste and residues, whereas representatives from trade unions, business and a majority of public authorities preferred not changing the current sustainability criteria for biomass.
The views of the stakeholders as expressed in the OPC and during the workshops were taken into account when elaborating the various policy options on the respective policy areas in the impact assessment.
• Collection and use of expertise
A study from external contractors Trinomics provided technical support for renewables policy development and implementation. The impact assessment carried out for the CTP and the Commission’s assessment of the Member States’ Natonal Energy and Climate Plans (NECPs) and the 2020 Renewable Energy Progress Report also formed part of the evidence base.
In addition the following studies also fed into the impact assessment:
·Technical support for renewables policy development and implementation: enhanced efficiency through sector integration
·Renewable Cooling under the Revised Renewable Energy Directive
·Renewable Space Heating under the Revised Renewable Energy Directive
·Policy support for heating and cooling decarbonisation
·Regulatory and market conditions of District Heating and Cooling
·Potentials and levels for the electrification of space heating in buildings
·Renewable Heating and Cooling Pathways, Measures and Milestones for the implementation of the recast Renewable Energy Directive and full decarbonisation by 2050
·Technical assistance to assess the potential of renewable liquid and gaseous transport fuels of non-biological origin (RFNBOs) as well as recycled carbon fuels (RCFs), to establish a methodology to determine the share of renewable energy from RFNBOs as well as to develop a framework on additionality in the transport sector
·Simplification of Permission and Administrative Procedures for RES Installations
·Establishing technical requirements & facilitating the standardisation process for guarantees of origin on the basis of Directive(EU) 2018/2001
·Technical assistance for assessing options to establish an EU-wide green label with a view to promote the use of renewable energy coming from new installations
·Assessment of the potential for new feedstocks for the production of advanced biofuels (ENER C1 2019-412)
·Support for the implementation of the provisions on ILUC set out in the Renewable Energy Directive (ENER/C2/2018-462)
·The use of woody biomass for energy production in the EU (JRC report, 01/2021)
·Scoping study setting technical requirements and options for a Union Database for tracing liquid and gaseous transport fuels
Impact assessment
The Impact Assessment (IA) accompanying the Proposal was elaborated based on modelling, stakeholder input and input from the Interservice Group. The report was submitted to the Regulatory Scrutiny Board on the 10 of March 2021. On 19 April 2021, the Regulatory Scrutiny Board delivered its first opinion on the Impact Assessment, and following the re-submission of the IA, the second was delivered on 19 May.
Against this background, the impact assessment analysed the various options through which a revision of the REDII could effectively and efficiently contribute to the delivery of the updated target as part of a wider “Fit for 55” policy package.
Regarding the overall renewable energy target level, option 0 (no change) would provide no means of ensuring that the EU-wide renewable energy target is deployed to reach at least 38-40% share in final energy consumption. Option 2 (a higher target than 40%) would potentially lead to overshooting the climate target and to a lack of coherence with other EU legislative instruments. Hence, option 1 (a minimum target in the range of 38-40%) has no drawbacks and is the thus the preferred and effective option. Regarding the nature of the target, although option 1 (national binding targets) would imply the most effective achievement of an increased RES share, this would create subsidiarity issues. The current Energy Union Governance process is an important foundation for achieving the renewables target. The first iteration of the review process of the national plans, completed in 2020, proved to be effective in that the national contributions were collectively sufficiently ambitious to reach the binding Union 2030 RES target. Under the Governance Regulation the Member States must submit their draft updates to their NECPs by June 2023, and can already show how they are planning to reach the higher target 2030 target. Given the effective nature and architecture of the current system, option 0 (maintaining the EU binding target and national voluntary contributions) is the preferred option.
Regarding heating & cooling, option 1 (non-regulatory measures) will not trigger Member States to increase efforts in the RES heating and cooling sector to at least 1.1% annual average percentage point (pp). Translating the EU RES heating and cooling figure from the CTP into a binding uniform increased annual average share across Member States equally as per option 3b is not considered proportionate, although it is the most effective. The level of renewables needed in 2030 could also be set as a target as proposed in option 3c but that would depart from the current model and could disrupt the already on-going implementation efforts, although it would have the added benefit of setting the end-goal in 2030 clearly. Option 3a combined with sector and EU RES buildings and industry benchmarks of appropriate design (option 3d) would be effective in providing the right mix of drivers for integrating further these sectors into the energy system. This option 3a would set a minimum flat rate of RES growth by making the current indicative annual increase target of 1.1 p.p. as the minimum required effort and complement it with Member State specific “top-ups” redistributing the additional efforts to the desired level of renewables in 2030 among Member States based on GDP and cost. The additional Member States specific increase rates could provide a means of assessing the relative level of ambition of each Member States in the heating and cooling sector but also as a potential gap filler measure to close the gap, if other sectors than heating and cooling would fail to deliver the 38-40% overall RES target. The option of a benchmark for the use of renewable energy in the building sector is also considered here.
The extended list of measures as per option 2a allows flexibility at national level and ensures proportionality and gives the Member States a toolbox to choose from. The design respects national and local diversities in conditions and starting points, and provide a clear framework for actors at all levels (national, regional, local) and of all types (from utilities and companies to municipalities to citizen consumers/prosumers).
Regarding district heating & cooling, option 3c (increasing the indicative 1% annual increase percentage-point target to CTP levels of 2.1% without changing its nature) would steer district heating developments towards integrating more renewable energy in coherence with the CTP and carbon-neutrality goals, while respecting the wide variety of situations in Member States. Option 3b (indicative EU renewable target for renewables’ share in district heating & cooling could give similar benefits as option 3c but departs from the current provisions and could be disruptive for already ongoing implementation. Option 3d (increasing the 1% percentagepoint increase target and making it binding) would be the most effective target design, but is too stringent and leaves less room for Member States. Option 3a (no changes) would make it possible for district heating to indefinitely continue with the fossil fuels and thus is not coherent with the review’s objectives. Option 2 (list of measures) can be self-standing or complementary, as it gives a clearer enabling framework to transform district heating and cooling, make it into an enabler of renewable energy supply in buildings and to become a key heat decarbonisation instrument, while enhancing energy sector integration in national and EU energy systems. Combining option 2 on measures with the target design in option 3c is the preferred option to ensure that district heating and cooling aligns with the EGD and becomes an enabler to deliver on the CTP and energy system integration goals. Together with the options on overall heating and cooling and buildings, this option would also set an enabling framework to develop and expand modern renewable based smart district heating and cooling systems.
Regarding mainstreaming renewable electricity, option 1.1 (availability of near-real-time information on the renewable share of electricity supplied by the grid) would provide effective market incentivising signals that relate directly to renewable penetration and carbon reduction, without any administrative burden and in coherence with existing legislation. Option 1.2 (information on the RES-share and GHG emission profile would have some positive effects on consumer information, however it would otherwise bring limited added value. Options 2.1-2.3 cover different aspects of optimising the intelligent charging infrastructure, with varying levels of positive contribution to overall implementation costs and benefits to the economy. In order to provide flexibility to Member States, implementation based on national assessment was in each case selected as the preferred solution revolving around smart charging functionality, including bidirectional charging and deployment of additional smart charging points (2.1B, 2.2B and 2.3). Options 3.1-3.3 address various obstacles in the aggregation and mobility service provision market which hinder competition. Option 3.1 (ensuring that the treatment of electricity storage systems or devices by network and market operators is not discriminatory or disproportionate irrespective of their size (small-scale vs large-scale) or whether they are stationary or mobile, so that they are able to competitively offer flexibility and balancing services) is a no-regrets option. Option 3.2 (independent aggregators and mobility service providers to have access to basic battery information, such as state-of-health and state-of-charge) is necessary in setting a level playing field and its early implementation would bring positive long term effects in the availability, quality and cost of services provided to domestic battery owners and electric vehicle (EV) users. Option 3.3 (ensure open access to all publicly accessible charging infrastructure) is expected to become increasingly beneficial with the proliferation of EVs.
Of the options considered regarding the increase of renewable energy in the transport sector, a combination of option 1B (in addition to the increase of the target and the sub-target for advanced biofuels a dedicated sub-target for renewable fuels of non-biological origin is introduced) with options 2A (energy-based obligation fuel suppliers), 2C (the choice between the approaches described under 2A and 2B (emissions-based obligation fuel suppliers) is left to the Member States or 2D (emissions-based obligation fuel suppliers but operators are required to achieve minimum shares for advanced biofuels and renewable fuels of non-biological origin) would perform the best overall. While all options apart from option 1 deliver on the needed level of ambition, there are substantial differences. The energy-based options may have the advantage to promote the development and production of innovative renewable and recycled carbon fuels as they provide the most predictable and stable policy framework for investments into such technologies. The GHG-intensity based options can stimulate supply chain improvements and technology efficiency in renewable and low carbon fuels, where costs of production are higher and would have the advantage of ensuring consistency with the approach chosen under the Fuel Quality Directive. This, however, would require applying changes to the methodology applied to determine the GHG emission intensity.
Promoting the use of renewable fuels of non-biological origin is fully in line with the Energy System Integration Strategy and the Hydrogen Strategy as well as the CTP especially if considering the post-2030 perspective. This is in particular valid for option 1 (extension of the scope of accounting of RFNBOs beyond transport and improvement of the consistency of accounting of RFNBOs) and option 3 (creation of specific sub-targets for RFNBOs in hard-to-decarbonise sectors). Specific but realistic sub-targets for RFNBOs for the transport and industry sectors in 2030 would be a first step for their larger scale development after 2030.
Regarding the certification of renewable and low carbon fuels, option 1a (adjustment of the scope and content of the current certification system to include all fuels covered by REDII including recycled carbon fuels) and option 2A (further development of the existing system of guarantees of origin as an alternative certification system) were assessed. Option 1a was considered to have good potential to strengthen the existing system, with the certification of low-carbon fuels to be addressed in a separate legislative proposal such as the Hydrogen and Decarbonised Gas Market Package. IT development choices will be subject to pre-approval by the European Commission Information Technology and Cybersecurity Board.
Regarding the options to ensure bioenergy sustainability, option 1 (non-regulatory measures) would facilitate the implementation of the REDII sustainability criteria, but would not include additional safeguards to address the identified risks. Option 2 (targeted strengthening of the current EU bioenergy sustainability criteria) would provide the most direct safeguard against the risks of production of forest biomass in high biodiversity areas. It would also introduce additional safeguards promoting optimal lifecycle GHG emissions saving and avoiding new inefficient biomass use in the power sector. Option 3 (regulation of small installations) would further add to the effectiveness of option 2 by regulating a larger amount of biomass use for energy in the EU. It would also help improve public monitoring of biomass production and use. Building on the preferred options 2, 3 and 4.2 (requiring Member States to design their support schemes for biomass fuels in a way to minimise market distortions in the raw materials market, with the aim to minimise the use of high quality roundwood), would contribute to minimising the use of whole trees for energy production as set out in the EU Biodiversity Strategy.
In addition to the core objectives of the revision of REDII to address the insufficient ambition in a 2030 and 2050 perspective, to address the insufficient system integration, and to update bioenergy sustainability provisions, a limited number of additional “flanking” or enabling measures could contribute to the cost-efficient deployment of renewables.
Regarding Power Purchase Agreements (PPAs), option 1 (guidelines) will provide additional guidance to Member States without increasing administrative burden, although the effectiveness will depend on the uptake of these guidelines. Option 2 (financial support for the use of PPAs for small and medium-sized enterprises) will have a positive benefit for the uptake of renewables and the European economy. Option 3 (strengthening of regulatory measures on PPAs) would place additional burden upon Member States to remove any undue barriers, but could provide additional certainty for producers and consumers of renewable electricity. Options 1 and 2 are considered the preferred combination.
Regarding cross-border cooperation, option 1 (updated Commission guidance) would, by itself, not be very effective whereas option 2 (obligation for Member States to test cross-border cooperation within the next 3 years) has a moderate effectiveness. Although option 3 (mandatory partial opening of support schemes) and option 4 (enhanced use of the Union renewable energy financing mechanism) would be highly effective, option 2 is expected to be more politically acceptable and thus the preferred option.
Regarding the promotion of offshore energy, given the binding nature of option 1 (joint planning) it would be very effective to ensure target setting and implementation per sea basin. Option 2 (introduction of single contact points for the permitting per sea basin) can be expected to have good effectiveness of facilitating permitting of cross-border offshore renewables projects. A combination of both options is preferred.
Regarding industry, option 0 (no changes) is not expected to increase the share of renewable energy consumption in the industry sector, creating serious concerns regarding the objective to reduce greenhouse gas emission reductions by 2030, and to achieve climate neutrality in 2050. Option 1 (introduction of use of renewable energy in the audits required in the EED) would provide an effective means to introduce industrial actors to existing cost-effective solutions to switch to renewable energy, without any administrative burden and in coherence with existing legislation. Option 2 (labelling for industrial products in certain sectors claimed to be made from renewable energy) provides an effective means to create a uniform and coherent market for those companies that are placing products and services produced from renewable energy on the market. Any mandatory labelling would need to be carefully designed to ensure compatibility with WTO rules. Options 1 and 2 would be complementary and the most effective options, combined with an indicative target for the use of renewable energy in industry.
Overall the policy options have positive economic, environmental and societal benefits. A more secure EU energy system, less dependent on imports, would be achieved by the increase in renewable energy, in particular from offshore. The revision of REDII is likely to have positive impacts on economic growth and investments, by creating quality jobs, and reducing fossil fuel imports and energy costs for consumers and business. Many of the policy options are projected to create jobs, in line with the envisaged green digital recovery. Positive employment effects are expected, especially in sectors linked to renewable energy, with an increase in employment and skills in the construction and energy supply sectors and shift in employment between the sectors. Per euro of expenditure, renewable energy creates nearly 70 per cent more jobs than fossil fuels spending and solar PV creates more than twice the number of jobs per unit of electricity generation compared to coal or natural gas. Greater use of energy from sustainable renewable sources, including renewable hydrogen, would result in reduced GHG emissions. Replacing fossil fuels will also reduce air pollutants and have a beneficial impact on health. Renewable-based electrification of road transport would have positive impacts in particular on urban air pollution, whereas electrification of, for example, heating in buildings, would contribute substantially to reducing the GHG and other air pollutant emissions from the European building stock, which today relies heavily on fossil fuels. Air quality in cities will be improved by among others renewable heating, especially district heating in cities. Positive biodiversity impacts will follow from stronger sustainability criteria for bioenergy. It may reduce import from outside the EU of biomass fuels, as third countries choose not to comply with them and redirect their export away from the EU.
The revision of the REDII will mainly entail practical implications for Member States public administrations given the need to comply with higher (binding) targets which need to be worked towards to and monitored accordingly. Other actions required from the public administration include promotion and facilitation of the uptake of renewable energy across multiple carriers.
• Regulatory fitness and simplification
A regulatory fitness programme (REFIT) evaluation of the Renewable Energy Directive was carried out between 2014 and 2016. Given the relatively recent adoption of REDII, the proposed revision is limited to what is considered necessary to contribute in a cost-effective way to the Union’s 2030 climate ambition, and is not a full revision of the Directive. The Impact Assessment identified possibilities for simplification of legislation and reduction of regulatory costs.
No changes in the compliance monitoring regime are foreseen.
Increasing renewable energy use in heating and cooling and in buildings will require building works/renovation, leading to an increase in employment in the sector. Up to 95% of construction, architecture and civil engineering firms are small and medium sized enterprises (SMEs), so there is a likely positive economic effect on SMEs. Guidance and financial support on power purchase agreements will help SMEs who do not have the resources to deal with complex contracts. More stringent forest biomass criteria may create increased administrative costs and burden for small and medium-sized economic operators.
To ensure fair competition in the single market the same rules should apply to all economic operators. As such, the proposal does not exempt SMEs or micro-enterprises except for providing simplified verification mechanisms for small energy producing installations. However, the envisaged economic impacts also likely to benefit SMEs as most of the value chain of deploying renewable energy technology, in particular solar PV, is operated by SMEs.
In terms of consistency with the Charter for fundamental rights, the overarching aim of this review is to increase the use of renewable energy and reduce GHG emissions, and this is entirely in line with Article 37 of the Charter under which a high level of environmental protection and the improvement of the quality of the environment must be integrated into the policies of the Union and ensured in accordance with the principle of sustainable development.
Contents
This proposal amends an existing Directive on the use of renewable energy, and the administrative impact and costs are therefore estimated to be moderate, as most of the necessary structures and rules are in place. The proposal does not entail any additional costs for the EU budget.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
After the adoption of this amending Directive by the co-legislators, during the transposition period, the Commission will undertake the following actions to facilitate its transposition:
–Drafting of a correlation table that serves as transposition check-list for both Member States and the Commission.
–Organisation of meetings with Member States’ experts in charge of transposing the different parts of the Directive to discuss how to transpose them and solve doubts, either in the context of the Concerted Action for Renewable Energy Sources (CA-RES) or in a committee format.
–Availability for bilateral meetings and calls with Member States in case of specific question on the transposition of the Directive.
After the transposition deadline, the Commission will carry out a comprehensive assessment of whether Member States have completely and correctly transposed the Directive.
Regulation (EU) 2018/1999 on the Governance of the Energy Union and Climate Action established an integrated energy and climate planning, monitoring and reporting framework, to monitor progress towards the climate and energy targets in line with the transparency requirements of the Paris Agreement. Member States had to submit to the Commission their integrated national energy and climate plans by the end of 2019, covering the five dimensions of the Energy Union for the period 2021-2030. From 2023, Member States must report biennially on the progress made in implementing the plans and in addition, by 30 June 2023 they must notify the Commission of their draft updates of the plans, with the final updates due on 30 June 2024. This update, due in 2024, would cover planning obligations related to any new targets agreed in the revision of REDII. Any additional planning and reporting requirements set in this proposal will not create a new planning and reporting system, but would be subject to the existing planning and reporting framework under Regulation (EU) 2018/1999. The future revision of the Governance Regulation would allow a consolidation of these reporting requirements.
• Explanatory documents (for directives)
Following the ruling of the European Court of Justice in Commission vs Belgium (case C-543/17), Member States must accompany their notifications of national transposition measures with sufficiently clear and precise information, indicating which provisions of national law transpose which provisions of a directive. This must be provided for each obligation, not only at “article level”. If Member States comply with this obligation, they would not need, in principle, to send explanatory documents on the transposition to the Commission.
• Detailed explanation of the specific provisions of the proposal
The main provisions which substantially change Directive (EC) 2018/2001 or add new elements are the following:
Article 1(1) amends Article 2 REDII by modifying the definition of renewable fuels of non-biological origin and default value, and adding new definitions of quality roundwood, renewable fuels, bidding zone, smart metering system, recharging point, market participant, electricity market, domestic battery, electric vehicle battery, industrial battery, state of health, state of charge, power set point, smart charging, regulatory authority, bidirectional charging, normal power recharging point, industry, non-energy purposes, plantation forest and planted forest.
Article 1(2) amends Article 3(1) REDII with the updated 2030 EU target of at least a 40% share of energy from renewable sources in the Union’s gross final consumption of energy in 2030. It also modifies Article 3(3) to strengthen the obligation to minimise the risks of unnecessary market distortions resulting from support schemes and to avoid supporting certain raw materials for energy production in line with the cascading principle. It also introduces the obligation to phase out, with some exceptions, support for electricity production from biomass from 2026. Furthermore, Article 1(2) adds a new paragraph on electrification, to help Member States reach their national contributions.
Article 1(3) amends Article 7 REDII with the updated calculation method of the share of energy from renewable energy sources so that (i) energy from renewable fuels of non-biological origin must be accounted in the sector in which it is consumed (electricity, heating and cooling or transport), and (ii) the renewable electricity used to produce renewable fuels of non-biological origin is not included in the calculation of the gross final consumption of electricity from renewable sources in the Member State.
Article 1 i amends Article 9(1) REDII with an additional paragraph on the Member States’ obligation to have a cross border pilot project within 3 years and it amends Article 9(7) REDII with an additional paragraph on joint offshore energy planning per sea basin, under which Member States must jointly define and agree to cooperate on the amount of offshore renewable generation to be deployed within each sea basin by 2050, with intermediate steps in 2030 and 2040.
Article 1(5) amends Article 15 REDII by deleting paragraphs 4 to 7 regarding buildings, which have been moved to a new Article (15a), updating the references to standards, strengthening the provision on renewables power purchase agreements, and adding a clause to review the administrative procedures one year after the entry into force of this amending Directive.
Article 1(6) inserts a new Article 15a on mainstreaming renewable energy and enabling measures to mainstream heating & cooling in buildings. This new Article includes a new indicative Union target of renewables in buildings by 2030 of 49% and a reference to the new definition of ‘efficient district heating and cooling’ that will be added to the recast Energy Efficiency Directive, which is one of the ways the minimum level of RES in new buildings and buildings undergoing major renovation can be satisfied. It adjusts the text of the paragraphs on buildings of Article 15 REDII to link them to the achievement of the indicative RES targets and to promote the switch from fossil fuel heating systems to RES, as well as to be coherent with the Energy Performance of Buildings Directive.
Article 1(7) amends Article 18(3) REDII with adjusted paragraphs on the qualification and certification requirements of installers to deal with the fact that there is a shortage of installers of renewable heating systems, which is a ‘brake’ on phasing out fossil fuel systems. It also deletes list of specific types of renewable heating technologies and replaces it by a generic reference to RES heating systems. It amends Article 18 i REDII by obliging Member States to put in place measures to support participation in training programmes. The previous possibility for Member States to make the list of qualified installers public becomes a requirement.
Article 1(8) amends Article 19(2) and (8) REDII to remove Member States’ ability not to issue guarantees of origin to a producer that receives financial support, linking to the changes related to power purchase agreements in Article 15.
Article 1(9) amends Article 20(3) REDII with a new and additional paragraph to enhance energy system integration between DHC systems and other energy networks, by requiring Member States, where relevant, to develop efficient DHC to promote heating and cooling from RES.
Article 1(10) inserts a new Article 20a in REDII facilitating system integration of renewable electricity by the following measures:
·TSO and DSOs are required to make available information on the share of RES and the GHG content of the electricity they supply, in order to increase transparency and give more information to electricity market players, aggregators, consumers and end-users;
·Battery manufacturers must enable access to information on battery capacity, state of health, state of charge and power set point, to battery owners as well as third parties acting on their behalf;
·Member States shall ensure smart charging capability for non-publicly accessible normal power recharging points, due to their relevance to energy system integration;
·Member States shall ensure that regulatory provisions concerning the use of storage and balancing assets do not discriminate against participation of small and/or mobile storage systems in the flexibility, balancing and storage services market.
Article 1(11) inserts a new Article 22a in REDII on mainstreaming renewable energy in industry with an indicative target of an annual average increase of renewable energy of 1.1 percentage points and a binding target of 50 percent for renewable fuels of non-biological origin used as feedstock or as an energy carrier. It also introduces a requirement that the labelling of green industrial products indicates the percentage of renewable energy used following a common EU-wide methodology.
Article 1(12) amends Article 23(1) REDII so that the 1.1 ppt annual increase in heating and cooling becomes a binding baseline and adds an additional paragraph obliging the Member States to carry out an assessment of their potential of energy from renewable sources and of the use of waste heat and cold in the heating and cooling sector. It also amends Article 23 i REDII with an extended menu of measures to help them implement the heating and cooling target. It also strengthens this paragraph so that Member States must ensure, rather than aim to ensure, the accessibility of measures to all consumers, in particular those in low-income or vulnerable households, who would not otherwise possess sufficient up-front capital to benefit.
Article 1(13) amends Article 24(1) REDII with an updated paragraph on information of the renewable energy share in district heating and cooling systems. Article 1(13) amends Article 24 i REDII with an updated paragraph on increased target share, from 1 ppt to 2.1 ppt of energy from renewable sources and from waste heat and cold in district heating and cooling and a new paragraph is added expanding third party access to apply to district heating or cooling systems above 25 MWth where this makes sense. Article 1(13) amends Article 24(5) REDII with an updated paragraph adding a reference to the new definition of efficient district heating (to be added to the recast Energy Efficiency Directive) and requiring Member States to put in place a mechanism to deal with unjustified refusals of third party access. Article 24(6) REDII is amended with a new paragraph on a framework to facilitate coordination among actors having a role in the use of waste heat and cold. Article 1(13) amends Article 24(8) REDII with updated paragraphs requiring DSOs to make an assessment every 4 years of the potential for district heating or cooling systems to provide balancing and other system services. Article 24(9) REDII is amended with an updated paragraph on Member States’ obligation to ensure that the rights of consumers and the rules for operating district heating and cooling systems in accordance with the revised rules, that they are clearly defined, publicly available and enforced by the competent authority. Article 24(10) REDII is amended with an updated paragraph correcting the cross references and adding the new definition of efficient district heating (to be added to the recast Energy Efficiency Directive)
Article 1(14) amends Article 25(1) REDII by increasing the ambition level of renewables in transport by setting a 13% greenhouse gas intensity reduction target, increasing the subtarget for advanced biofuels from at least 0.2 % in 2022 to 0.5% in 2025 and 2.2 % in 2030, and introducing a 2.6% sub-target for RFNBOs. Article 1(14) also introduces a credit mechanism to promote electromobility, under which economic operators that supply renewable electricity to electric vehicles via public charging stations will receive credits they can sell to fuel suppliers who can use them to satisfy the fuel supplier obligation.
Article 1(15) amends Article 26 REDII to reflect the greenhouse gas intensity target set in transport.
Article 1(16) amends Article 27(1) REDII by setting out rules to calculate both the reduction of the greenhouse gas intensity of fuels achieved by the use of renewables in transport and the targets for advanced biofuels and biogas and renewable fuels of non-biological origin. Article 1(16) deletes Article 27(2) REDII to remove the multipliers associated to certain renewable fuels and to renewable electricity used in transport. Article 1(16) amends Article 27(3) REDII to delete the additionality framework for electricity in transport and to make the provisions on the calculation of renewable fuels of non-biological origin produced from electricity apply regardless of the sector in which such fuels are consumed.
Article 1(17) amends Article 28 by deleting the paragraphs on the Union database, which is now regulated in Article 31(a), and by deleting the empowerment in paragraph 5 to adopt a delegated act specifying the methodology for assessing greenhouse gas emissions savings from renewable fuels of non-biological origin and from recycled carbon fuels, which is now regulated in Article 1(20).
Article 1(18) amends Article 29(1), (3), i, (5) and (6) REDII with updated paragraphs with targeted strengthening of the current sustainability criteria by applying the existing land criteria (e.g. no-go areas) for agricultural biomass also to forest biomass (including primary, highly diverse forests and peatlands). Those strengthened criteria are applied to small-scale biomass-based heat and power installations below a total rated thermal capacity of 5 MW. Article 1(18) amends Article 29(10) REDII with an updated paragraph applying the existing greenhouse gas saving thresholds for electricity, heating and cooling production from biomass fuels to existing installations (not only new installations). Article 1(18) adds further elements to Article 29(6) to minimise the negative impact of harvesting on soil quality and biodiversity.
Article 1(19) inserts a new Article 29a on greenhouse gas emissions saving criteria for renewable fuels of non-biological origin (RFNBOs) and recycled carbon fuels, so that energy from RFNBOs can only be counted towards the targets set in this Directive if its GHG emissions savings are at least 70% and energy from recycled carbon fuels can only be counted towards the transport target if its GHG emissions savings are at least 70%.
Article 1(20) modifies Article 30 REDII to adjust it to the changes introduced in Articles 29a and 31a. It also introduces a simplified verification mechanism for installations of between 5 and 10MW.
Article 1(21) deletes paragraphs 2, 3 and 4 of Article 31 REDII, which regulated the possibility to use of regional cultivation values, in order to better promote producers’ individual efforts to reduce the greenhouse gas emission intensity of raw materials
Article 1(22) inserts a new Article 31a, which regulates the Union database, extending its scope so that it can cover fuels not only in the transport sector. It will enable the tracing of liquid and gaseous renewable fuels and recycled carbon fuels as well as their life-cycle greenhouse gas emissions. The database is the monitoring and reporting tool where fuel suppliers must enter the information necessary to verify their compliance with the fuel suppliers’ obligation in Article 25.
Article 2 amends Regulation (EU) 2018/1999 in order to change the Union-level binding target of at least 32% for the share of renewable energy consumed in the Union in 2030 therein to ‘the Union's binding target for renewable energy in 2030 as referred to in Article 3 of Directive (EU) 2018/2001’. It does not amend other key elements of Regulation (EU) 2018/1999 such as the 15 % electricity interconnection target which remains crucial for renewables integration.
Article 3 amends Directive 98/70/EC to avoid a duplication of regulatory requirements with regards to transport fuel decarbonisation objectives and align with Directive (EU) 2018/2001, among others regarding obligations regarding the greenhouse gas emission reduction and the use of biofuels.
Article 4 contains transitional provisions related to reporting obligations under Directive 98/70/EC to ensure that the data collected and reported in accordance with articles of Directive 98/70/EC, which are deleted by Article 3 i of this Directive, are submitted to the Commission.
Article 5 contains the stipulations regarding transposition.
Article 6 repeals Council Directive (EU) 2015/652.
Article 7 concerns entry into force.