EU Adopts the RED III: what is in it for GO market stakeholders?

– First part –

RED III: what is in and what is not?

The European Council adopted the new Renewable Energy directive earlier this week. The revision of the existing Directive is part of the European Union’s efforts to address climate change and transition to a more sustainable energy system. It is part of the “Fit for 55“ package, a comprehensive set of legislative measures aimed at aligning the EU’s climate and energy policies with its long-term climate goals. These goals include achieving climate neutrality by 2050 and reducing net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels.
As some renewable energy certificate stakeholders view it, the recast of the Directive cements the status quo of EU law on GOs introducing significant additions but also leaving out some important aspects. So, what could the GO market participants expect, based on what is in RED III and what is been left out?

Ambitions Renewable Energy Targets.

The mandatory EU-wide 2030 renewables target in overall energy consumption has been set at 42.5%. This represents nearly double the European Union’s existing RES share, which stood at 21.8% in 2021, and it marks a substantial increase of the 2030 ambition when compared with the previous REDII target of at least 32% RES by 2030.

Sectoral Sub-targets that Focus on Renewable Energy Use

REDIII has considerably broadened its scope in comparison to earlier versions, encompassing demand sectors in a more comprehensive manner. By introducing sectoral targets for transport, industry, buildings, heating and cooling, the EU is set to accelerate the slow-moving renewables adoption in these sectors. For example, industry will have to increase the use of renewable energy annually by 1.6%. Furthermore, the Renewable Energy Directive sets a binding mandate for renewable fuels of non-biological origin (RFNBOs) for the first time.

Renewable Energy Projects on the Fast Track

Fast tracking renewable energy projects will put the long and complex permitting processes in the past. Furthermore, small production devices (less than 50 kW) will benefit from simplified registration process. This move is likely to boost the RES GO availability with a shorter time horizon.