Working Paper

Potential greenhouse gas savings from a 2030 greenhouse gas reduction target with indirect emissions accounting for the European Union

The European Commission’s proposal for a recast Renewable Energy Directive for the period 2021-2030 (RED II) includes a 6.8% target for renewable energy to be used in transport. This target can be met by advanced biofuels, renewable electricity, waste-based fossil fuels, and renewable fuels of non-biological origin (such as power-to-liquids). Food-based biofuels are not eligible to be used towards the transport target. The proposal defines a list of eligible feedstocks that can be used to produce advanced biofuels, including many types of materials often referred to as “wastes” and “residues,” such as municipal waste, wheat straw, forestry residues, and inedible animal fats.

Alternative fuels must reduce greenhouse gas (GHG) emissions by at least 70% to qualify, but the Commission’s proposed GHG calculation methodology does not include indirect effects. Indirect land use change (ILUC) has been estimated to substantially reduce and in some cases eliminate the GHG savings associated with biofuels made from food, such as corn ethanol and rapeseed biodiesel. The magnitude of indirect emissions that would be caused by eligible advanced biofuel feedstocks in the RED II proposal has been less well understood. This study estimates indirect emissions for many of these feedstocks and finds that, if indirect emissions accounting were included in the GHG calculation methodology for the RED II, several pathways currently listed as eligible are not likely to meet the 70% GHG reduction threshold. Similarly to food-based biofuels, some eligible feedstocks may not offer any GHG savings at all.

This study also assesses the total GHG savings that could be achieved by the policy in 2030 if the transport target were changed to a GHG reduction target, similar to the target in the EU’s Fuel Quality Directive (FQD). This analysis shows that, for the same total amount of renewable energy delivered, a GHG target would drive greater GHG reductions compared to the energy target in the Commission’s proposal. If indirect emissions accounting is included, a GHG target could more than double the GHG savings of the RED II transport target compared to the Commission’s proposal. This analysis demonstrates that key changes to the transport target in the RED II could make this policy much more effective in mitigating climate change.

Alternative fuels Life-cycle analyses