Renewable Energy Directive (RED III)

Oesterreichs Energie welcomes the increase in the target share of renewables in final energy consumption in 2030 from 32% to 40%. Integration of the energy system is central to achievement of the EU’s climate protection targets.
 

The proposed directive for the use of energy from renewable sources (RED III) sets out cross-sector targets and measures designed to capitalise effectively on the potential of cost-effective renewables in all sectors of the energy system. The definition of higher targets in the electricity, building and transport sectors, as well as in industry and for high-efficiency district heating and cooling is intended to ensure achievement of the new target of a 40% share of renewables in energy consumption.
 

Transport

We support the adaptation of the target for use of renewable energy in the transport sector to focus on greenhouse gas (GHG) emission reductions, as this will introduce technology-neutral incentives for cutting such emissions. The far-reaching removal of multipliers in this context is also a positive step, because this will reduce distortions when giving credits for contributions to achieving targets.

We also support the planned introduction of a non-binding target of annual growth of 1.1 percentage points (ppt) in the use of renewables in the industrial sector.
 

Heating and cooling

Set out in Article 23 of the directive, the previous voluntary target of increasing the share of renewables in the heating and cooling sector by 1.1 ppt a year is now set to become mandatory. For district heating, the target annual increase in the share of renewables and waste heat is due to be raised from 1 ppt to 2.1 ppt. Both changes will require huge efforts and should be viewed critically as things currently stand.
 

Renewable share in the building sector

The draft directive sets a highly ambitious target of 49% for the use of renewables in the building sector. It will only be possible to achieve this if all of the available options are harnessed. These include direct electrification (heat pumps) and the expansion of district heating systems. Furthermore, energy suppliers must not be saddled with responsibility for hitting the 49% target, as is the case with the suppliers’ obligations in reaching the energy efficiency targets. With a view to achieving highly promising system integration, it is important to put the emphasis on the quality of energy sources, and not the technologies applied when using energy. Heating with renewable gases should also be possible in the future. It is not the technologies as such that are harmful to the environment, but their use with fossil fuels.
 

System operators

Under Article 20a, transmission system and distribution system operators are required to make information available on the share of renewable electricity and the greenhouse gas emissions content of the electricity supplied in each bidding zone, as accurately as possible and as close to real time as possible but in time intervals of no more than one hour; this information is to be provided digitally to other market participants and consumers. This should be rejected because system operators are not suppliers and have no details of the composition of providers’ supplies. Obtaining other data – on batteries, tracking options for vehicle batteries and smart recharging – would appear to be problematic because they should not simply be passed on to third parties. This is also seemingly problematic under the General Data Protection Regulation, so a suitably cautious approach should be taken.

Smart and bidirectional recharging will be one of the most important success factors for electromobility. However, the technology is not yet up and running. The majority of the available vehicles, current network infrastructure and existing recharging infrastructure do not fully support the technology. For this reason, Oesterreichs Energie believes that the obligation under Article 20a should be amended so that it only applies to newly installed recharging points. We therefore recommend a transitional phase lasting until 2027 so that existing recharging infrastructure can be upgraded.
 

Hydrogen

In general, the aim should be to promote the use of renewable gases for the widest possible range of applications. In the view of Oesterreichs Energie, this would be important in order to pave the way for activities such as cross-border trading in renewable and decarbonised gases. It follows, then, that the problem of the inadequate definitions of hydrogen and renewable gases must be tackled as part of the review of the third gas package, which is due to be published in December.

The introduction of a subtarget for hydrogen in the transport sector is an encouraging development, although Oesterreichs Energie is of the opinion that hydrogen should only be used in mobility sectors where there are no practical electric alternatives to achieve decarbonisation. Oesterreichs Energie welcomes the introduction of a quota for the use of renewable hydrogen in industry of 50% by 2030 – a key demand-side measure – in order to give significant impetus to the ramp-up of the market for green hydrogen. At the same time, the conditions for allocating credits for renewable hydrogen towards achievement of various sector-specific targets should not be administered too restrictively. Oesterreichs Energie proposes the gradual introduction of conditions for the production of green hydrogen, such as the additionality criterion and strict time-based and geographic correlation, followed by a tightening of the conditions in the medium term. This will give the renewable hydrogen sector added impetus, with corresponding production capacity in Europe, while also setting out a sustainable growth trajectory at an early stage. Clarification of the creditability of electricity/hydrogen in the respective final consumption sectors is also a positive step, as it creates uniform and clearly understandable regulations (with no double counting).

Oesterreichs Energie is in favour of implementing strict sustainability criteria for hydrogen, but only on the condition that they do not put production of renewable hydrogen at a disadvantage compared with other production approaches (e.g. blue or nuclear hydrogen). That said, in conjunction with the planned delegated act on the production of green hydrogen provided for in Article 27(3) RED II, this could result in exceptionally strict and disproportionate criteria for the production of renewable hydrogen. The proposed widening of the criteria beyond the transport sector to all end-use sectors could significantly obstruct the growth of the EU hydrogen industry. Extending the conditions for additionality and simultaneousness to all hydrogen end-use sectors will have a particularly negative impact. Such an extension would mean that European-wide only very small amounts of electricity could be used to produce green hydrogen, which would be reflected in extremely low production levels and high production costs. In addition to the provisions for the manufacture of renewable hydrogen, we also take a negative view of the extension of the requirement for GHG savings of 70% to all end-use sectors. We estimate that by 2030 Austria would be unable to use any electricity from the grid in accordance with the RED II criteria to produce green hydrogen. In its proposal, the Commission explicitly refers to the possibility of importing renewable hydrogen. Oesterreichs Energie supports this, but we also believe that a reliable certification mechanism would have to be developed in order to ensure fair competition.
 

Biomass

Commission report to be presented by 2026 on the effects of the member states’ support schemes for biomass in accordance with Article 3(3)(b): the assessment must be carried out and resulting limitations implemented separately for each member state. Drafting general restrictions on the use of biomass would be detrimental to member states which prioritise the sustainable use of wood and have enshrined this principle in national legislation.

We see a need for clarification of the following aspects:

There are many unanswered questions regarding the Commission’s proposal that obliges member states to establish at least one cross-border joint project to be implemented by 31 December 2025. For instance, it is unclear who and what technologies the project should be aimed at, and whether and how the procurement should take place. In the case of cross-border projects, steps must be taken to avoid long approval procedures, and ensure that Austrian environmental regulations which go beyond EU requirements do not influence the choice of location and put foreign sites at an advantage. In any event, this assessment and these aspects should be taken into consideration when planning cross-border projects.

With regard to transport, Oesterreichs Energie demands clarification on the introduction of any credit system. In the current proposal, it is still unclear who would initially receive credits: would they be allocated to the operator or the owner of recharging infrastructure, or to the supplier of renewable electricity?

Regarding the Commission’s planned guidelines for approval procedures, we would support an approach whereby the Commission also takes into account the zoning process as well as the basic duration of approval procedures.

Concerning the Commission’s proposal for a Union database to enable comprehensive tracing of guarantees of origin for renewable liquid and gaseous transport fuels of non-biological origin (RFNBOs), it is currently still unclear how this new system and the associated database could be integrated into or possibly supplement the existing system for recording guarantees of origin (e.g. guarantees for electricity and gas). More detailed explanations on the interoperability of both systems would be required.