Alternative transport fuels elements of the European Union’s “Fit for 55” package
Changes to the Renewable Energy Directive revision and ReFuel EU proposals: Greenhouse gas savings and costs in 2030
This briefing provides policy recommendations to assist European Council and Parliament as they negotiate the final legislation for the Fit for 55 package. The recommendations follow the findings in a previous ICCT paper regarding how changes to the policy proposals can achieve greater greenhouse gas (GHG) savings at a lower cost. The analysis also highlights sustainability risks associated with food-based fuels, including intermediate crops. The analysis suggests the following policy recommendations described below.
All food and feed-based feedstocks, including intermediate crops, should be excluded from the RED II revision and the GHG reduction target should be lowered accordingly to increase GHG savings and reduce cost. If an ambitious GHG or renewable energy target is set while continuing to exempt intermediate crops from the food cap large, additional amounts of business-as-usual crop biofuel with high associated land use change emissions will be produced.
If it is not possible to change the eligibility of intermediate crops towards the targets, the GHG intensity target level should be reduced to achieve more GHG savings and lower carbon abatement. After submandates are met, remaining demand for renewable fuel to meet the overall transport target is met primarily by intermediate crops, so a lower overall target would result in less intermediate crop fuels would be produced.
A GHG intensity transport target with submandates, as proposed, would provide greater GHG reductions at a lower cost than a renewable energy mandate. Compared to a comparable renewable energy target, the current GHG intensity target in the RED II revision proposal produces a cost of carbon abatement that is three times lower and GHG savings that are three times higher. This is because a GHG intensity target rewards efficiency and production improvements more than a renewable energy target.
Member states should meet complementary and ambitious EV targets to help meet the transport targets. The analysis shows that lower-than-predicted EV penetration in the transport sector in 2030 has large risks for the transport fuel GHG target, resulting in a significant increase in the production of intermediate crop fuel. This finding reinforces the importance of removing the intermediate crop exemption or lowering the GHG intensity target level.
In addition, the ReFuelEU aviation e-fuels mandate for 2030 and the revised RED II advanced biofuel subtarget could be increased. The analysis suggests that the 2030 aviation e-fuels mandate could be 2.5% and the RED II advanced biofuel subtarget could be increased to 2.75% at no additional cost per tonne CO2e reduction.