What is the Renewable Energy Directive III, and how is it reflected in the different sectors?

The Renewable Energy Directive III – or RED III – entered into force on 20 November 2023. It sets new conditions for the production and consumption of renewable energy in the EU, and replaces the previous RED II Directive on renewable energy. The new directive will particularly affect operators in the bioenergy and transport sectors, while, at the same time, tightening the energy efficiency requirements for operators.

The Renewable Energy Directive III contains more detailed rules on a wide range of subjects. Its key objective is to increase the current EU-wide overall target of increasing renewable energy to 42.5% by 2030. The main changes to the directive relate to bioenergy, transport, and the authorization of renewable energy plants.

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. More detailed regulation brings new obligations and challenges, but also raises new questions about the ultimate meaning of the changes for different operators. It remains to be seen, for example, how and on which laws the new sustainability criteria will be applied. What is certain is that the Renewable Energy Directive III extends the requirements for renewable energy, energy efficiency, and sustainability reporting to a larger number of operators.

The Renewable Energy Directive III affects many sectors

The first Renewable Energy Directive (RED I) was published in 2009, setting a renewable energy target of 20% of the final energy consumption in the member states by 2020. The RED II Directive of 2018 raised the target to 32% by 2030.

In addition to the general objective, the third directive also brings sector-specific requirements. For the transport sector, the Renewable Energy Directive III means a 29% renewable energy target by 2030. The sub-target for advanced biofuels and RFNBO fuels based on renewable hydrogen is 5.5%. In addition, the obligation will cover public charging of electric vehicles.

A system designed for sustainability reporting is an ideal solution for producing reports and verifying the accuracy of data.

Operators in the energy sector must report on the reduction of greenhouse gas emissions in their activities. At the same time, the number of plants subject to the obligation will increase as the total thermal threshold for plants using solid biomass fuels will be reduced from 20 MW to 7.5 MW.  

According to a preliminary interpretation, industrial operators should increase their use of renewable energy by 1.6% per year. At the same time, 42% of the hydrogen used in industry should be produced from non-biological renewable fuels by 2030 and 60% by 2035.

For the real estate and construction sector, the indicative target for the share of renewable energy in buildings is set at a minimum of 49% by 2030. Renewable energy targets for heating and cooling will gradually increase until 2026 and between 2026 and 2030.

Technology must keep pace with a tightening business environment

Businesses should already consider the impact of the new targets on their activities in their sector. For bioenergy and transport operators in particular, the directive means a new practical tightening in Finland, but the overall targets on final energy consumption and energy efficiency will bind operators across a wide range of sectors. They also put new pressure on the collection and reporting of sustainability and energy efficiency data. To minimize business risks, it is advisable to prepare well in advance.

A system designed for sustainability reporting is an ideal solution for producing reports and verifying the accuracy of data. This allows detailed monitoring of the accumulation of 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 the Renewable Energy Directive III and to proactively ensure smooth and reliable operations in the future. 

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