Bellona response to the consultation on the preparation of a new renewable energy directive for the period after 2020

Bellona Response RED II Feature Picture

Moving from RED (2012-2020) to REDII (2020-30), some significant premises are altered, that will need to influence the market design and concept choices to secure achievement of the overall target: at least 27% renewable energy in final energy consumption by 2030. Cost-effectiveness seems to be a particular priority into the REDII period. Bellona fully acknowledges the need for this emphasis, particularly in light of the significant reductions in technology costs for several renewables – in itself a positive development. Nonetheless, support mechanisms for immature, new and innovative technologies that will not be commercially adopted through technology neutral market-based support schemes, must still remain a focus area.

The EU’ Energy Union Strategy puts strong emphasis on the consumer, and as such empowering consumers becomes a strong priority for the REDII (2020-30) period. With rapid developments in distributed/ local RES technologies such as solar, and complementary innovation in storage solutions like batteries, consumer choice and contribution to the broader RES target for the REDII period has great scope. To unleash this potential, administrative and market design barriers must be removed and the right incentives offered.

Through this consultation, the EU seeks advice on improvements to the Guarantee of Origin (GO) system. If the GO scheme is to be continued into the REDII period, Bellona strongly argues that amendments be made to its design, to address the current weaknesses. Fundamentally, the link between the green consumption choice offered by GO and the actual physical electricity production (with particular emphasis on new renewable development), must be strengthened if the GO is to be continued.

The RED has not been successful in attaining the 10% target for renewable energy consumption in transport by 2020. The European Commission’s latest Renewable Energy Progress Report shows that progress towards this target over the past five years has been slow – a 5.4% share was achieved in 2013, which went up to only 5.7% in 2014[1]. The ‘technology neutral’ RED sub-target for transport has failed to incentivise renewable electricity uptake, which as a result represents only a small amount of the total share (1484ktoe compared to 10.3 Mtoe of biodiesel). The quantitative, rather than qualitative focus of the RED transport sub-target means that no distinction has been made between different renewable fuel types in terms of their emission intensity. Subsequently, the easiest and cheapest options to meet the target have gotten priority, regardless of whether they bring technological innovation or deliver the most important GHG savings. Not surprisingly, we have observed that the RED has been a big driver of crop-based (1st generation) biofuels which are expected to make up most of the 10% target.

Bellona sees the electrification of transport as an absolute pre-condition to meeting the EU’s 2020 and 2030 renewable energy targets in a sustainable way. Given the enormous benefits electric vehicle (EV) uptake would entail in terms of climate, air quality, human health and energy supply security, electrification of transport should be seen as a cornerstone of Europe’s decarbonisation strategy for transport. The RED for the post-2020 period as well as the upcoming Commission proposal on the Effort Sharing Decision and related Communication on the Decarbonisation of Transport offer important opportunities to highlight the key role of electro-mobility.

In light of the non-legally binding nature of the 2030 RES target at the Member State-level, supplementary targeted policies at the EU and national level, consisting of both sticks and carrots, will be imperative to incentivise the uptake of electro-mobility. The choice of these incentives and their suitability will vary from Member State to Member State, depending on their characteristics, electricity prices, goals, and transport user trends. Consumer confidence in the EV technology will be built through the establishment of a European inter-operable re-charging infrastructure featuring an adequate number of fast-charging stations to ensure smooth inter-urban and international mobility.

Green public procurement (GPP) will be instrumental in stimulating demand and market uptake of EVs. The Clean Vehicles Directive (CVD), which regulates GPP in the EU, has so far been slow at fostering the uptake of EVs, due to the directive’s limited scope, and lack of stringent and user friendly criteria. These limitations should be addressed in the currently ongoing revision process of the GPP criteria for transport.

The recent emissions testing scandal has been crucial in highlighting the urgent need for an improved, and independent, car emission testing regime, but also in exposing the fact that emission performance standards fail to sufficiently internalise the true societal cost of the car industry. Bellona calls for the tightening of CO2 emission performance standards for new passenger cars, set by Regulation (EC) 443/2009. A target of 70g/km for 2025 should be the absolute minimum level of ambition. Reported emissions data has been used by governments not only as an indicator to set new public health policies but also to simulate future air pollution and CO­2 levels and targets. This means that in order to ensure fair and correct taxation of ICEs, hybrids and plug-in hybrids, we firstly need to ensure accurate emissions data.

To exploit the full potential of EVs and reap all benefits of transport electrification, Bellona calls for the introduction of regulations conducive of the use of energy storage by system regulators, utilities and individuals. Member States should, when developing their plans for RES, provide targets and requirements for balance power and system demands, highlighting the potential of energy storage. What is more, smart charging should be encouraged in order to minimise charging costs for the consumer as well as avoid grid disruptions.

When it comes to biofuels, for RED II attention should be given to furthering 2nd (lignocellulosic, i.e. woody) and especially 3rd generation (marine) biofuels, the latter of which may hold the greatest potential. Bellona sees seaweed for fuel in particular as well suited to avoid the main challenges of land-based biofuels. Work would need to begin now to bring costs down. This in turn would require finding best applicable pre-treatment, making hydrolysis and fermentation reactions more efficient, scaling-up the processing equipment and systems commercialisation.

Based on lessons from current biofuels policies, we may not yet be aware of what effects policies will have and it therefore seems prudent to put in place a review, for example in 2025, to ensure that there are checks of the policy’s impacts and that any measure that would not help fulfilling the EU long-term goals is reviewed in time to avoid detrimental impacts. Building in such an expectation for a review from the start would also limit the market uncertainty caused by the U-turn on 1st generation biofuels policy.

[1] Renewable Energy Progress Report (June 2015)