ships

Renewable Energy Directive (RED)

Summary

The information provided on this page is based on the European Commission Proposal dated July 2021. Key elements are subject to change before the definitive measures are adopted.

Setting a new 2030 target for the EU’s renewable energy share

As part of the Fit for 55 package to reach its ambitious Green Deal goals, the EU must develop an integrated energy system with significantly higher shares of renewable energy sources.

Under the Fit for 55 proposal, the existing Renewable Energy Directive (RED) is being revised to meet a new target: a 40% energy share from renewable sources by 2030. Furthermore, the revision suggests a 13% greenhouse gas (GHG) intensity reduction target for transportation.

What does the RED impact?

Incentives to use energy from clean, renewable sources

Key dates

2030: deadline to reach the 13% target GHG intensity reduction in the transportation sector

What could be in the RED update?

The proposed revision to the RED sets new targets for GHG emissions from fuels used in transportation and for the use of innovative alternative fuels.

It should be noted that the main focus of this revision is currently on reducing emissions from road transportation rather than the maritime sector.

Of more direct consequence for maritime operators is the revision’s aim to promote advanced biofuels and biogas, as well as renewable fuels of non-biological origin. As shipping is seen as a sector that will be difficult to electrify, use of these alternatives will be incentivized for shipping but not for other sectors.

Member states will be able to exempt or distinguish between energy suppliers and carriers to account for variations in the maturity and cost of different alternative fuel technologies.  

How will the RED impact shipping?

Overall, the shipping industry does not need to be very concerned by the proposed revision to RED. Its impact will only be felt in that the targets it sets will be translated through the EU Energy Trading System (EU ETS) and other carbon intensity reduction measures. 

Is the RED update still being discussed?                 

The EU Council’s delegation supports the aim and ambitions of the RED proposal. However, they have highlighted the need for:

  • Flexibility to allow member states to apply the most cost-efficient measures
  • Coherence with existing legislation
  • Maintaining a technology-neutral stance

How can I keep up to date with RED news?

While RED will only have an indirect impact on ship owners and operators, its will nevertheless contribute to the future maritime sector in Europe. Like all of Fit for 55, the final form of the RED update has yet to be decided, though it will become clearer in the months ahead.
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