German ministries agree on emission reduction quota for transport fuels
Germany is to increase the greenhouse gas reduction quota for transport fuels from currently six to 22 percent in 2030, an environment ministry bill which has been approved by the other ministries states. Companies that supply fuel in Germany are obliged to reduce the greenhouse gas emission of all the products they place on the market by a certain percentage: the greenhouse gas reduction quota.
The legislation which is implementing the European Union’s Renewable Energy Directive (RED II) is aiming for a share of 28 percent renewable energies in the transport sector by 2030, considerably more than the 14 percent benchmark set by the EU.
The environment ministry’s bill which will now be send to the European Commission for approval, puts a focus on electric mobility, hydrogen and advanced biofuels and aims to reduce the promotion of conventional biofuels based on feed and food crops as well as palmoil. The use of conventional biofuels will be limited to the current level of 4.4 percent while palm oil is to be phased out entirely by 2026. “The more we reduce palm oil, the more space is created for domestically produced biofuels,” state secretary in the environment ministry Jochen Flasbarth said at a press conference.
In line with the RED II directive, the environment ministry has opted to significantly promote electric mobility and charging infrastructure by stipulating that the renewable electricity used in e-cars will be counted three times towards meeting the greenhouse gas reduction quota. Since the legislation obliges fuel suppliers to have a certain share of greenhouse gas reducing renewables in their fuel, suppliers can buy certificates for renewable electricity from charging point operators. Crediting e-car power threefold will make this compliance option more attractive to fuel suppliers than the use of biofuels; it will also provide non-tax-based funding for charging point operators.
This decisions had elicited strong criticism from the biofuels lobby but also from the renewables industry. They lament the strong focus on electric mobility and “displacement” of conventional biofuels. Others argue that all available low-carbon solutions had to be promoted, including conventional biofuels, if Germany wants to achieve its emission reduction targets. The environment ministry has reacted to this criticism by reducing the support to electric mobility – instead of counting its use four times towards the quota, it will now be counted three times.
While the bill is designed to “give a strong incentive to expand the network of e-car charging points, we don’t want the other compliance options to be displaced,” Flasbarth said. Should e-mobility take off in an unexpected way, the greenhouse-gas quotas in the bill could be adjusted accordingly, he added.
The ministry expects the European Commission to greenlight the legislation in January and counts on its approval by the cabinet in January/February 2021.
