Update on a provisional agreement for the Union database (UDB)

After seven trilogues within the European Parliament, held between October 2022 and March 2023, the co-legislators recently came to a provisional agreement for amendments to the Directive (EU) 2018/2001 of the European Parliament and of the Council, or known as the Renewable Energy Directive (RED).

For the gas sector, one of the most important issues impacting the sector is the introduction of the Union Database. The amending Directive proposes a new provision for the UDB under Article 31a, aiming to enable the tracing of liquid and gaseous renewable fuels and recycled carbon fuels (see our previous article on the Union Database 

The key contents of the Union database are the following:

The Union database shall be established within a year after the amending Directive enters into force.

Member States are responsible for requesting the economic operators and fuel suppliers to enter relevant data into the Union database, for example, transactions and sustainability characteristics of the fuels, etc. Data may be entered into the Union database via national databases.

The Union database shall provide information about the injection and withdrawal of renewable gaseous fuels. The interconnected gas system shall be considered to be a single mass balance system. This proposal is an important clarification for the gas market which leads to harmonised and simplified cross-border trades.

The mass balance system may be supplemented by guarantees of origin (GOs) where suitable.

In order to avoid double claims on the same renewable gas, Gas GOs issued for any consignment of renewable gas shall be registered at and cancelled from the Union database and shall not be traded outside of the Union database once transferred.

Member States may use an already existing national database if it is compiled and linked with the Union database or establish a new national database that is aligned with the Union database. The features of their national databases shall be notified to the Commission.

The data in the Union database shall be available to the general public on an annual basis, in a transparent and user-friendly manner while protecting commercially sensitive information and privacy issues.

The Union database shall extend its scope from covering only transport to all other end-use sectors in which such fuels are consumed.

In addition, Article 30 in the compromise agreement regulates the establishment of national schemes by Member States where compliance with the sustainability and greenhouse gas emissions saving criteria and with the Union database rules is discussed. 

The enforcement of the Union database would create harmonisation of the gas tracking system and increase transparency and traceability of liquid and gaseous renewable fuels, leading to the comprehensive monitoring of the production and consumption of such fuels. The database would provide a boon to the renewable gas market in terms of mitigating the double-counting risk as well as facilitating the cross-border transfer of renewable liquid and gas fuels since it promotes uniform verification systems in the EU. Additionally, the provision that allows the use of guarantees of origin (GOs) to complement mass-balancing where appropriate could bring positive impacts to the gas GO market, particularly by increasing the liquidity of gas GOs in the voluntary market.

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A Union database, proposed by the Commission as a reporting system for liquid and gaseous renewable fuels and recycled carbon fuels among Member States, was initially introduced in the Directive (EU) 2018/2001 for biofuels for the transport sector but wasn’t fully developed. In the recent provisional agreement, the updated Union database provision is proposed, and its scope is extended to cover all renewable fuels in all sectors. The enforcement of this provision would create positive impacts on the gas market.

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Union database – New provision in Renewable Energy Directive

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