The RED III Renewable Energy Directive entered into force in November 2023. The new EU directive will particularly affect operators in the bioenergy and transport sectors, while, at the same time, strengthening the sustainability reporting requirements for operators.
The RED III Directive sets new conditions for the production and consumption of renewable energy, and replaces the previous RED II Directive on sustainability reporting. Its key objective is to increase the current EU-wide overall target of increasing renewable energy from 32% to 42.5% by 2030.
EU member states have 18 months from the entry into force of the regulation to implement it, leaving some room for operators to make changes. The Directive contains more detailed rules on a wide range of subjects.
RED III replaces the previous directive on sustainability reporting
In 2009, the first RED I was published, with sustainability criteria for liquid biofuels only. The 2018 RED II Directive extended the sustainability criteria to a significant proportion of energy operators.
More detailed regulation brings new obligations and challenges to sustainability reporting, but also raises new questions about the ultimate meaning of the changes for different operators. It remains to be seen, for example, to what extent the origin of fuel has to be proven under RED III, in other words, whether it covers the entire supply chain from the production phase to the final product.
One of the amendments to the RED III Directive concerns the cascade principle for forest biomass, which refers to the efficient use of the material as a resource, with forest biomass being used primarily for products and materials rather than energy. From now on, the cascading use of wood needs to be monitored more closely, and member states also need to ensure that energy from biomass is produced in a way that minimizes undue distortions in the raw material market and adverse impacts on biodiversity.
Covering a larger number of operators in the future
What is certain is that the RED III Directive extends sustainability reporting requirements to a wider range of operators. More and more operators will be affected by the RED III-compliant sustainability criteria, as the new directive applies to smaller installations: the total thermal capacity threshold for installations using solid biomass fuels is 7.5 MW instead of 20 MW, increasing the number of installations obliged to demonstrate biomass sustainability. The demonstration of emission reductions is also extended to a larger group.
In addition, the transport sector will see an increase in the number of operators subject to obligations due to the RED III Directive, as the sector target applies to maritime and air transport in addition to road transport.
Technology must keep up with sustainability reporting
The processes and tools for sustainability reporting make the job much easier, regardless of the size or sector of the operator. For larger operators in particular, reducing manual work in reporting and data collection should be achieved through technological solutions that also support reliable reporting from start to finish.
Designed for sustainability reporting, the system is an ideal solution for producing reports and verifying the accuracy of data. This allows detailed monitoring of the data, including the origin of the loads, and the system automatically alerts you if the data is incomplete. Up-to-date technology is a good way to prepare for the stricter requirements of RED III and to ensure smooth and credible operations in the future.
So the RED III Directive will not make sustainability reporting any easier – quite the opposite. As sustainability objectives are also relevant for many new operators, or for old operators due to the extension of obligations, it is advisable to plan reporting well in advance of the entry into force of the Directive as far as possible.
Read more
Blog: The RED III Directive defines sustainability reporting in the energy sector – automatic reporting makes it easier
Guide: Sustainability reporting in the energy and circular economy sector
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