The Renewable Energy Directive underwent a significant evolution over the years since its first adoption in 2009, subsequent revision in 2018, and its present iteration in 2022. Prior to this, there have been two legislative proposals by the European Commission: one from 2021 and another from May 2022, with some amendments making it to the present version as of September 2022.
The proposal does not include binding national renewable targets, leaving it up to the Member States themselves to set their goals, in line with the previous directive. Earlier, the EU overshot its renewable energy target (to have 20% of gross final energy consumption from renewable sources) by 2 percentage points in 2020, leaving room for more ambitious goals. Interestingly, if we look at the state of progress for the 2020 targets, 26 MS met or exceeded their renewable goals, with France being the only “underachiever”, lagging by 3.9% (Fig. 1). Most of the Member States met their targets without making use of statistical transfers, a mechanism that allows European countries to conclude agreements to transfer, for a certain price, a specified amount of energy from renewable sources from one MS to another. So far, there are four agreements currently in place: between Luxembourg - Lithuania, Luxembourg - Estonia, Netherlands – Denmark, and Malta – Estonia.
On the EU level
- 45% target of the total share of renewable energy in gross final consumption
On the Member States level, the intention is to:
- Facilitate the penetration of innovative renewable energy technologies. Thus, each MS is to set an indicative target of at least 5% of new installed renewable energy capacity between the Directive’s date of entry into force and 2030;
- Set an indicative target for storage technologies (no time horizon given);
- Set a peak electricity demand reduction of minimum 5% by 2030;
Sub-targets for specific sectors
- In the industry sector, the uptake of renewable sources for final energy and non-energy purposes should be at the average minimum annual increase of 1.9 percentage points by 2030 (the increase being the average for the 3 three – year period);
- As for heating & cooling, MS are to promote the use of renewable energy in this sector, increasing the share of clean energy by 2.3 percentage points (calculated as an annual average for the periods of 2021 – 2025 and 2026 – 2030);
- Transport (see below)
- Require Member States to establish joint projects for the production of renewable energy, including offshore renewable hybrid assets. By the end of 2025, MS with an annual electricity consumption of up to 100 TWh are to establish at least two joint projects, whereas those whose consumption exceeds this amount, are expected to establish a third project. This signals a more interconnected and interdependent European energy system, that moves away from energy imports and switched to domestic production instead, ensuring security of supply long-term;
- Cooperate to establish the amount of offshore renewable energy they plan to produce in a bordering sea basin by 2050, with intermediate goals by 2030 and 2040;
Guarantees of Origins (GOs)
- New minimum requirements for information disclosure in GOs, with move towards greater granularity and possible alignment with legislative development on Renewable Fuels Non-Biological Origin (RFNBO) (see specific focus on GO below);
- Rejection of Commission’s proposal to require issuance also for supported renewable energy production.
Renewable Fuels Non-Biological Origin and Hydrogen
- Facilitate issuance Guarantees of Origin (GOs) for renewable hydrogen. MS shall ensure that the contribution of Renewable Fuels Non-Biological Origin (RFNBOs) used for final energy and non-energy purposes is at least 70% of the hydrogen used for the same purposes in the industry sector;
- Streamline administrative and permitting procedures (estimates suggest that administrative and grid issues make up 46% of all identified barriers faster renewable deployment);
Transport & Fuel
- Set an obligation on fuel suppliers:
- to ensure that the amount of renewable fuel and electricity is sufficient for a 16% decrease in greenhouse emissions target in the transport sector;
- to ensure a minimum share of RFNBOs of 2.6% in 2028 and 5.7% in 2030;
- to ensure the delivery of at least 1.2% RFNBOs and renewable hydrogen to maritime sector, for MS that have maritime ports.
Nothing is set in stone yet; while the move indicates the general direction in which the European lawmakers are moving, embracing more renewables than ever before, the target has yet to go through the EU legislative process. The amendments are now subject to the European Council for a first reading. However, the Commission’s amended proposal, following the ‘REPowerEU’ plan, split the EU's ordinary legislative procedure into two parallel processes, i.e. one concerning the original proposal and the other concerning the amended proposal.
Markus Pieper, the rapporteur in charge of the Directive, will present the amended proposal to the Parliament’s industry committee (ITRE) on September 26 before it is voted on in the plenary. The idea is that the two processes will merge during the trialogue talks involving the European Commission, the Parliament and EU member states.
Nevertheless, the revamped Renewable Energy Directive kickstarts the wheels of the bureaucratic machine in Member States: if approved, they will need to adjust their national climate and energy plans, as well as bring into force the laws and regulations to comply with the Directive by the end of 2023 at the latest. Such swift response is explained by the fact that typically the timeframe for increased renewables deployment was limited to 12 years (e.g., EU’s renewables target for 2020 was adopted in 2008, and then again in 2018 for 2030). However, with renewed political ambition, the time span can be effectively reduced to less than a decade, making Brussel’s goals harder to achieve.
We will follow this legislative process closely and provide you with more detailed updates as well as an analysis on the GO specific developments. If you have any questions, do not hesitate to contact our new Renewable Policy Analyst at email@example.com and our International Certificate Analyst at firstname.lastname@example.org.