Regulatory Anticipation

15 June 2022

Monthly biofuels report – Policy Update (mid-May – mid-June 2022)

Fit For 55

Revision of the EU ETS for Aviation

• On 8 June, the European Parliament Plenary adopted its position to incorporate aviation emissions
into the EU ETS. All flights leaving Europe would fall under the ETS scope. Free allowances would
be phased out by 2025 (against the initial proposal by the Commission to phase them out by
2027), but other allowances would be linked to the use of Sustainable Aviation Fuels (SAFs) by
airlines. The latter reacted positively to the creation of SAFs allowances, which they argue could
help bridge the price gap with conventional kerosene.
• Next, the Environment ministers will meet on 28 June to consider their own position.

ReFuelEU Aviation
• On 2 June, the Transport Ministers adopted a General Approach on the ReFuelEU Aviation
Regulation, which introduces a mandate from 2025 to help boost the use of SAFs. Under the
proposal, SAFs should make up around 63% of all aviation fuel in Europe by 2050. The General
approach by the Transport ministers introduces a broader definition of SAFs, including any certified
biofuel that complies with RED II sustainability including co-processed biofuels and Recycled
Carbon Fuels, but excluding crop-based biofuels. A cap of 3% would apply to biofuels other than
advanced biofuels and RED II Annex IX-B biofuels. It proposes a 6% SAF mandate in 2030 (vs the
initially 5% proposed by the Commission). Member States would have flexibility to increase the
targets for synthetic fuels.
• Next, the lead Committee in Parliament (Transport) is due to adopt its position on 27 June, with a
plenary vote scheduled on 4 July. If adopted, the Parliament and Council could start negotiations
to reach an agreement in Q4 2022.

FuelEU Maritime
• On 2 June, the EU Council adopted a general approach to the initiative proposed by the
Commission, aimed at boosting the uptake of sustainable fuels in maritime transport, which
imposes gradually minimum GHG intensity cuts in the energy used by ships, from 2% by 2025 up
to 75% by 2050. The scope and targets are maintained under the Council’s compromise but some
temporary exemptions for ice navigation, small islands under 200,000 inhabitants and outermost
regions are included. It also proposes to have a multiplier for RFNBOs, (x2 until 1 Jan. 2030, 1.5
until 1 Jan. 2035).
• In Parliament, the Industry committee adopted its opinion on 8 June, tightening the GHG intensity
target from 25% from Jan. 2035, 50% from Jan. 2040, 75% from Jan. 2045 and 100% from Jan.
2050. It also proposed a dedicated share of RFNBOs in the energy used on-board by ships, from
2% from Jan. 2030 to 6% from Jan. 2035 and a multiplier to calculate their contribution to the
GHG intensity reduction target.
• Next, the lead committee in the European Parliament (Transport) is due to adopt its position on 11
July, with a vote in Plenary scheduled mid-September. If adopted by the Plenary, the file will be
subject to negotiations between Parliament and Council in Q4 2022.

RED II –
• On 13 June, the French Presidency circulated a proposed General Approach for the consideration
of Member States experts ahead of the 27 June meeting of ministers. Proposed amendments
include lowering the share of hydrogen supplied by renewable sources to 40% by 2030, 50% by
2035 (vs the proposed 50-75% by 2030 proposed by the Commission). It maintains the proposed
sub-target for advanced biofuels as proposed by the Commission (0.2% in 2022, 0.5% in 2025
and 2.2% in 2030) but lowers the RFNBO sub-target from 2.6 to 2.2% by 2030. Renewable fuels
supplied to international marine bunkers would count towards the GHG intensity target, and
 Member States could set targets divergent from the FuelEU Maritime Regulation if the overall 13%
GHG intensity reduction target is achieved.
• In Parliament, there has been no formal development in the reporting period. The lead committee
(Industry and Energy, ITRE) will vote on the proposal on 13 July, ahead of a Plenary vote on 12
Sept.

CO2 for cars and vans

• On 8 June, the European Parliament Plenary endorsed the Environment Committee position that
all cars and vans sold from 2035 must be ‘zero-emission’, effectively banning the sale of new
internal combustion engines after that. The 2030 interim emissions reduction target was also
raised, from 37.5% to 55%. A proposal to credit renewable fuels (mostly e-fuels and advanced
biofuels) towards achieving the emissions reduction targets was defeated, meaning the
measurement will remain purely on tailpipe emissions.
• Next, the European Council of 28 June will discuss and possible adopt its ‘General Approach’,
paving the way for negotiations between Council and Parliament after the summer recess.

National developments

Germany: On 20 May, the German ministries of Agriculture and Environment agreed to reduce the
limit of biofuels produced from food and feed crops to meet the GHG obligation quota from 4,4% to
2,4% in 2023 and to introduce a gradual reduction pathway to reach 0% by 2030. This measure is
adopted as a consequence of price increases due to the war in Ukraine and the Commission support
to Member States for further reducing the proportion of biofuels form food and feed crops.
Formally speaking, the approval by the Federal Cabinet could take place by the end of June.
Afterwards, the draft would be discussed in the national parliament. The Greens' goal would be to
adopt an amendment to the law by the end of the year.

Latvia is mulling a temporary waiver from mandatory biofuels blending requirements for both petrol
and diesel until the end of next year, the country’s environment ministry said, with a final decision to
be taken on 1 July.

Czech Republic’s President Milo Zeman signed on 24 May the suspension of the minimum blending
obligations for biodiesel presented by the Cabinet. The new law will come into force on 1 July.