Automotive industry calls for ambitious targets for renewable fuels

In a current position paper, the Association of the Automotive Industry (VDA) advocates an ambitious approach to implementing the Renewable Energy Directive (RED III) into national law so that renewable fuels can also make their decisive contribution to climate protection. Unlike the CO2 fleet regulation, which sets consistent savings targets for new vehicles, the requirements in RED III for ramping up renewable fuels have so far been too unambitious. The demands include a long-term target path and an upwardly dynamic GHG quota. This means that if the GHG quota is exceeded, it automatically increases through a defined mechanism in order to maintain investment incentives in renewable energy sources.

"Europe can only achieve its CO2 reduction targets with a course that is open to all possible solutions and technology. Politicians are called upon to establish incentives for the ramp-up of renewable energy sources and thus to guarantee and promote investment," VDA President Hildegard Müller explained.

RED III, which had been revised in 2023, sets out a clear climate target for the EU member states for the transport sector in order to defossilize it in the long term. It addresses the ramp-up of renewable energy sources - for the transport sector, these are charging current and renewable fuels. With renewable fuels, the existing stock of vehicles with combustion engines can be operated in a largely climate-neutral manner in the long term, but the market ramp-up of zero-emission vehicles, such as fuel cell trucks, can also be encouraged.

Renewable fuels are essential for defossilization of the existing fleet

"The fact is: the ramp-up of electromobility, including hydrogen vehicles in the commercial vehicle sector, will enable significant CO2 savings in the coming years. At the same time, this is not enough, as there will still be vehicles with combustion engines in Germany for a long time to come," emphasizes VDA President Hildegard Müller. "Even if the federal government's goal of 15 million electric cars by 2030 is met, at least 40 million cars and trucks with combustion engines will still be on German roads." Renewable fuels are urgently needed for this vehicle fleet. The VDA is therefore also calling for an RFNBO sub-quota (hydrogen and synthetic fuels) of at least five percent for 2030. The national energy and climate plan shows that the federal government is assuming a greater need for RFNBO than in RED III.

In addition to an ambitious design of RED III, accompanying measures are needed: among other things, a long-term reduction target path - as already adopted for air traffic and shipping - and a reform of the energy tax. "To ensure investment and planning security, politicians must now create a long-term regulatory framework with interim targets for 2035 and 2040, similar to those for shipping and air traffic," emphasizes Hildegard Müller. The goal of all politically conceivable instruments must be a rapid and scalable technology and market ramp-up.

Closing the gap between virtual and real climate protection

With a view to RED III, it is also important to revise the multiple counting. This means that certain amounts of energy placed on the market are counted multiple times - for example, charging current with three times its actual amount. This is intended to provide incentives for investments in certain renewable energy sources in order to achieve the CO2 reduction targets more efficiently.

Multiple counting provides an incentive for investments in certain energy sources to meet regulatory requirements, particularly during the ramp-up phase. However, overall they have a demand-reducing effect if the overarching targets within the framework of regulation do not increase accordingly. In order to close the gap between virtual and real climate protection, multiple counting should be gradually abolished by 2030. Hydrogen should be excluded in order to ensure investment security for it and to establish a market for green hydrogen in the first place.

You can download the RED III position paper here.