Opportunities for the Renewable Energy Directive
The current Renewable Energy Directive does not deliver the results needed to meet the Paris Agreement. The transition of the energy system in EU member states from fossil fu- els to 100% renewable energy must accelerate.
Increasing the share of renewable energy (RE) is a key building block to achieving the Paris Agreement. Last year, the European Commission launched a public consultation for the potential revision of the Renewable Energy Directive (RED). The aim of the consultation was to align policy with the Green Deal and its follow-up initiatives and as the RED is EU’s main RE policy legislation and it is vital that it is strengthened. There are several opportunities that can and needs to be put forward to improve the current RED policy framework. A reform proposal is expected this summer and the article highlights some of the updates this proposal should include.
Background to the RED
The original RED 2009/28/EC establishes an overall policy for the production and promotion of energy from renewable sources in the EU. An EU target for 2020 was set at a 20% share of energy from RE sources in final energy consumption. Additionally, this 20% target was imposed on the states through national binding targets. In December 2018, the recast directive 2018/2001/EU entered into force (often referred to as REDII, but in this article referred to as RED), as part of the Clean energy for all Europeans package. The revised legal framework included an overall binding RE target for the EU of at least 32% of final energy consumption by 2030. However, there were no new binding national RE targets.
Under the Regulation on the Governance of the Energy Union and Climate Action (EU) 2018/1999, EU countries are required to draft national energy and climate plans (NECPs) for 2021–2030, outlining how they will meet the new 2030 targets for RE and for energy efficiency. An analysis conducted by the European Commission in September 2020 shows that if Member States meet the national contributions for RE as spelled out in their NECPs, the EU is expected to reach a share of RE between 33,1% and 33,7% by 2030.
However, some member states have not committed to the minimum country-specific benchmarks. The system needs to incentivise these governments to be more ambitious through both stronger tools and obligations1. Without these developments the inconsistency of the commitments will harm RE investment security. Thus, the removal of the binding national targets undermined predictability and certainty, and they need to be reintroduced.
Another reason to the importance of binding targets is that “the non-binding nature of the targets at Member State level may pose challenges if faced with a Member State who is uncooperative or unwilling to make meaningful efforts toward achieving the targets. There is no obvious legal recourse for the Commission should a Member State fail to act” .
Higher ambition level
The level of ambition of RED needs to be higher. CAN Europe has called for an EU binding target for the share of RE in gross final energy consumption of at least 50% by 2030, and an EU long-term target for 100% RE by the 2040. The Paris Agreement Compatible (PAC) scenario shows that to limit global temperature rise to 1.5°C, a transition to a 100% RE-based energy system is necessary and feasible by the year 20402.
Additional research has shown that a 100% RE system can be created sooner than the current ambitions suggest. A new study3 illustrates that it is possible for Europe as a whole to become fully climate neutral by 2040 by merely going completely renewable, without technologies such as carbon capture and storage (CCS). According to the study’s modelling the total cost of achieving 100% RE by 2050 is 6% lower than the cost of inadequate action under the scenario.
Improved regulatory framework to increase sustainable implementation
Another important change is to address the barriers embedded in the regulatory framework, which result in complex processes of permit-granting. The time-consuming administrative procedures are an obstacle to increased and faster deployment of RE. Addressing permitting bottlenecks is critical to unlock the potential of renewables.
At present, licensing frameworks do not enable the scale and volume of renewable investments needed to deliver an EU green recovery, let alone the European Green Deal. Permitting rules and procedures for new and repowered renewable energy projects remain too complex and lengthy, despite the provisions in the recast RED that ask member states to simplify and shorten them. Slow processes prevent the use of the most efficient technologies available, which would be able to deliver the transition at the lowest cost for society.
It is naturally important that the deployment of RE should be sustainable and thus guided by spatial planning that respects biodiversity and includes public involvement. RE sources are not without environmental impacts and targeted actions are vital to reduce the impact of e. g. extraction of raw materials for manufacturing RE and energy storage technologies.
Keep the RED for renewables
The RED should push for the immediate phasing out of all direct and indirect fossil fuel subsidies. Thus, the revision of the directive should not be used to include provisions that incentivise -so-called “low-carbon” fuels which are still fossil based fuels. In line with this the EU and its member states should agree on phase-out dates for the production and use of all fossil fuels.
The revised RED needs to strengthen the sustainability criteria for bioenergy, to ensure that bioenergy delivers significant, near-term greenhouse gas savings compared to fossil fuels. The current directive does not prevent the use of an increasing amount of forest biomass for energy purposes. External costs from greenhouse gas emissions, air pollution, biodiversity loss and habitat destruction are not adequately mitigated or priced in the various incentives that apply to forest biomass.
Faster decarbonisation of the heating and cooling sector
The RED should support faster decarbonisation of the heating and cooling sector for buildings and industry. In 2019, only about 20% of the energy used for heating and cooling of these sectors came from renewable sources4. In addition, stronger binding measures need to be added to the RED to incentivise greater use of renewable electricity, geothermal and solar heating, facilitated through heat storage and district heating. Policy measures should also ensure that heating and cooling recovery systems are entirely renewables-based.
The RED should also ensure increased deployment of rooftop solar on public and private building stock. Heating and cooling account for about 80% of the energy used in residential buildings5. An integrated energy system needs measures that support demand-side flexibility options such as charging stations, heat pumps and battery storage that interact with the grid.
Coordination with legislation such as the Energy Performance of Buildings Directive and the Energy Efficiency Directive is vital. The RED should make sure that the Efficiency First principle is applied to a higher degree in legislation.
Address the untapped potential of industry
When it comes to the industrial sector in particular, the RED should create stronger incentives for RE usage. Industries will benefit from RE technologies that are currently technically mature and available for their various processes. Their energy sources can be changed, by generating or buying renewable electricity or making fuel switches. One effective addition to the RED would therefore be an obligation for industry to use a minimum amount of sustainable RE. This obligation would be subject to reform of the EU’s criteria on bioenergy mentioned above.
In summary, there are numerous opportunities that need to be put forward to improve the current RED policy framework and to help the EU achieve its commitments under the Paris Agreement. The implementation measures needs to be strengthened and RE targets for 2030 needs to be higher. However, an early draft of the EU’s upcoming RED has confirmed an objective of sourcing 38-40% of its energy from RE by 20306. The European Commission’s revised RED will be presented on the 14th of July as part of the wider “fit for 55” package of climate and energy legislation designed to implement the EU’s new 2030 emissions reduction target.
Compiled by Emilia Samuelsson
Based on Climate Action Network Europe’s briefing on the RED
1. Pave the way for increased climate ambition; Opportunities and Gaps in the final National Energy and Climate Plans https://www.caneurope.org/docman/energy-union-governance/3613-opportunities-and-gaps-in-final-necps/file
3. SolarPower Europe and LUT University (2020): 100% Renewable Europe: How To Make Europe’s Energy System Climate-Neutral Before 2050.
4. Eurostat, Statistics Explained - Renewable energy statistics https://ec.europa.eu/eurostat/statistics-explained/index.php/Renewable_energy_statistics#Over_one_fifth_of_energy_used_for_heating_and_cooling_from_renewable_sources
5. A renovation wave for Europe – Greening our buildings, creating jobs, improving lives. COM(2020)662.
6. Frédéric Simon, LEAK: EU’s draft renewables law confirms 38-40% target for 2030. 4th of May 2021. https://www.euractiv.com/section/energy/news/leak-eus-draft-renewables-law-confirms-38-40-target-for-2030/