RED Directive for Renewable Energy - Requirements

» Background and Legislative Context of Renewable Energy Directive

The European Union’s overarching climate goal is to achieve climate neutrality by 2050 under the legally binding European Climate Law (Regulation EU 2021/1119). Directive (EU) 2023/2413, adopted on 18 October 2023, forms a critical part of the “Fit for 55” legislative package, which aligns energy and climate legislation with the EU’s intermediate target of reducing greenhouse gas emissions by 55% by 2030 (compared to 1990 levels).

The Directive updates and strengthens the framework for the deployment of renewable energy across Member States. It responds to multiple policy challenges:

• The need to decarbonize the energy system (which represents 75% of EU GHG emissions),

• The urgency to reduce reliance on Russian fossil fuels, highlighted by the REPowerEU Plan,

• And the ambition to increase energy sovereignty, affordability, and security in the EU.

Directive 2023/2413 is primarily a legislative amendment to:

• Directive (EU) 2018/2001 (RED II) on the promotion of renewable energy,

• Regulation (EU) 2018/1999 on Energy Union governance,

• Directive 98/70/EC on fuel quality,

and it repeals Council Directive (EU) 2015/652.

» Scope and Objectives of Directive (EU) 2023/2413 for Renewable Energy

Scope and Objectives

The Directive serves five overarching policy objectives:

1. Increase the EU renewable energy share to at least 42.5% by 2030, with an aspirational 45% goal.
2. Accelerate permitting for renewable projects through designated renewables acceleration areas.
3. Establish binding sub-targets for key sectors: transport, industry, heating/cooling, and buildings.
4. Strengthen sustainability criteria for the use of biomass and bioenergy.
5. Promote innovation, grid flexibility, and cross-border cooperation mechanisms.

These changes aim to:

• Support the cost-effective and timely decarbonization of the EU energy mix,

• Foster a socially just and inclusive energy transition,

• Align national policies with EU-level climate objectives,

• Enhance market efficiency and system integration of renewables.

» Amendments to Directive (EU) 2018/2001 (RED II)

General Principles and Article 3 Targets

Article 3 is the cornerstone of RED II and now reflects the following key changes:

• Sets a binding overall EU renewable energy share of 42.5% by 2030, increased from the previous 32%.

• Establishes an aspirational collective target of 45%, to be achieved “collectively” by Member States.

• Each Member State must contribute to this target through national contributions under the Governance Regulation (EU) 2018/1999.

• National plans are assessed by the Commission to ensure adequacy toward the overall EU goal.

Calculation Methods (Articles 7–8):

• Harmonized methodologies are introduced for gross final consumption calculations.

• Double-counting of RFNBOs (Renewable Fuels of Non-Biological Origin) is explicitly avoided.

• Introduces flexibility mechanisms for trading and cooperation.

Impact: Strengthens the EU’s legal basis to accelerate investment in renewable capacity across all 27 Member States.

Renewable Energy in Buildings

Article 15a – Indicative Targets for Buildings

The Directive introduces a new indicative EU-level target for the share of renewables in the buildings sector, aligned with the broader decarbonisation of the building stock by 2050.

• By 2030, Member States must aim to achieve a minimum indicative renewable energy share in buildings as part of their national contributions.

• The renewable share includes:

  • On-site generation (e.g. rooftop PV),

  • Nearby renewable production,

  • District heating and cooling using renewables,

  • Renewable electricity taken from the grid (counted based on a 2-year national average).

Purpose of the measure:

• Ensure that the decarbonisation of buildings aligns with RED II and the Energy Performance of Buildings Directive (EPBD).

• Provide certainty to investors and municipalities.

• Encourage the adoption of smart technologies that promote energy system efficiency.

Key expectations:

• Encourage integration of renewables in renovation strategies.

• Support district energy networks.

• Complement targets under Articles 23 (Heating & Cooling) and 24 (District Heating) of RED II.

Renewable Energy in Industry

Article 22a – Indicative Target for Industry

The Directive introduces, for the first time, sectoral guidance for renewable energy use in industrial applications.

Targets:

• By 2030, Member States must increase the share of renewables in industry by at least 1.6 percentage points annually.

• At least 42% of hydrogen used in industry must come from renewable fuels of non-biological origin (RFNBOs) by 2030.

• This increases to 60% by 2035.

Types of applicable energy sources:

• Biomass,

• Renewable hydrogen (RFNBOs),

• Biogas,

• Renewable electricity used for industrial processes.

Application examples:

• Renewable process heat in cement, steel, and chemical industries.

• Use of renewable hydrogen in ammonia and refinery sectors.

• Electrification of industrial furnaces and boilers.

Key challenges addressed:

• Decarbonising hard-to-abate sectors.

• Providing visibility and investment certainty for hydrogen developers.

Renewable Energy in Transport

Article 25 – Binding Transport Sub-Targets

Transport is a key area of reform in the directive. The new rules replace the previous “energy content method” with more precise targets.

Two main compliance pathways (Member States must choose one):

Option A: GHG Reduction Target

• Achieve a 14.5% reduction in GHG intensity of transport fuels by 2030 (compared to 2020).

• Focuses on the decarbonisation outcome, regardless of energy volume.

Option B: Renewable Energy Share

• Ensure at least 29% renewable energy share in transport by 2030 (double the previous 14%).

Minimum RFNBO and Advanced Biofuels Requirements:

• RFNBOs: At least 5.5% of transport fuels by 2030.

• Advanced biofuels (Annex IX Part A): At least 2.2% of transport fuels.

Credit multipliers and flexibility:

• Optional multipliers for RFNBOs and electricity to reward cleaner fuels.

• Aviation and maritime sectors may be partially exempt but are addressed under other EU legislation (e.g. ReFuelEU, FuelEU Maritime).

Electric mobility:

• Electricity used in road transport counts 4x toward the target.

• Electrification of rail and logistics is encouraged.

Permitting and Acceleration Areas

One of the most transformative parts of Directive 2023/2413 is the overhaul of renewable permitting rules.

Articles 15b to 16c – Permitting Acceleration

Renewables Acceleration Areas (RAAs)

Member States are required to:

• Designate geographical areas as “Renewables Acceleration Areas” (RAAs) by February 2025.

• In these areas, environmental assessments are simplified and permitting timelines are drastically shortened.

Key Timeframes for RAAs:

• 12 months maximum for permit decisions within RAAs.

• 24 months maximum for permits outside RAAs.

What qualifies as an RAA?

• Locations with low environmental sensitivity (e.g., brownfields, industrial zones, rooftops).

• Areas pre-assessed for minimal biodiversity impact.

Other permitting improvements:

• Digitalisation of permit processes (e.g., online applications).

• Establishment of single contact points for developers.

• Stronger emphasis on grid infrastructure permitting and coordination.

Objective:

• Remove bottlenecks that delay renewable deployment.

• Respond to the REPowerEU Plan, which targets rapid scaling of renewables.

Sustainability of Biomass and Bioenergy

Articles 29–31 – Revised Sustainability Criteria

Biomass and bioenergy remain key parts of the EU’s renewables strategy — but with tighter sustainability safeguards.

Key Reforms:

• New restrictions on feedstock: Member States may not provide financial support for energy from saw logs, veneer logs, stumps, or industrial-grade roundwood.

• Cascading principle: Biomass must be used in hierarchical order:
  1. Material uses (wood products),
  2. Reuse,
  3. Recycling,
  4. Bioenergy (only as last resort).

• No support for electricity-only biomass plants, unless:

  • Located in coal-transition regions or outermost regions,

  • Equipped with Carbon Capture and Storage (CCS).

Forest sustainability:

• Stronger requirements on forest management practices,

• Mandatory criteria to prevent degradation of carbon sinks and biodiversity.

Biomethane Target:

• The EU sets a goal of 35 billion cubic meters/year of sustainable biomethane production by 2030.

Guarantees of Origin and Certification

Article 19 – GO System Expansion

• Guarantees of Origin (GOs) are expanded to include renewable hydrogen, RFNBOs, and renewable heating/cooling.

• Member States must ensure:

  • Full traceability of renewable attributes,

  • Prevention of double-counting,

  • Mutual recognition of GOs across the EU.

Article 31a – Union Database

• A centralized EU database for liquid and gaseous fuels ensures consistent reporting and verification.

• Covers data on:

  • Fuel feedstocks,

  • Emissions,

  • Conversion processes.

Certification of Compliance:

• Voluntary schemes are updated for GHG savings verification.

• Stricter auditing and compliance criteria to ensure high-integrity fuel tracking.

Innovation, System Efficiency and Flexibility

Article 3a and 3b – Innovation Target

• Each Member State must ensure that at least 5% of newly installed renewable energy capacity by 2030 comes from innovative technologies.

• Includes offshore floating wind, advanced PV, wave energy, and new storage.

System Efficiency Provisions

• Introduces the concept of “system efficiency”, encouraging:

  • Electrification where feasible,

  • Demand-response technologies,

  • Sector integration (electricity ↔ heating ↔ transport).

Cooperation Mechanisms between Member States

Articles 9–13 – Joint Projects and Statistical Transfers

• Member States are now required to establish frameworks for joint projects by 2025.

• Must aim for:

  • At least 2 joint projects by 2030,

  • A third if electricity consumption >100 TWh/year.

• Statistical transfers and joint tenders are promoted to support regional cooperation.

Offshore Renewable Strategy:

• Supports the deployment of 300 GW offshore wind and 40 GW ocean energy by 2050.

• Member States must integrate offshore renewables into maritime spatial planning.

» Amendments to Regulation (EU) 2018/1999

Directive (EU) 2023/2413 introduces targeted amendments to Regulation (EU) 2018/1999, which governs how Member States plan, report, and implement their contributions to EU-wide energy and climate objectives.

Strengthened Role of National Energy and Climate Plans (NECPs)

• Member States must integrate the new 42.5% renewable energy target into their updated NECPs due by June 2024.

• NECPs must now explicitly include:

  • Sector-specific trajectories for buildings, transport, industry, heating and cooling,

  • Renewables acceleration area designations and spatial planning processes,

  • Milestones for the development of joint projects.

Enhanced Monitoring:

• Progress is assessed biennially by the European Commission via:

  • Progress Reports,

  • Compliance Reviews,

  • Gap-filling recommendations (if NECPs fall short of contributing to the EU-wide targets).

Corrective Actions:

• If the EU is not on track, the Commission can initiate enforcement procedures or request amended national contributions.

» Amendments to Directive 98/70/EC and Repeal of Directive 2015/652

Fuel Quality Directive (98/70/EC)

The Directive includes minor but crucial updates to align fuel quality monitoring with RED III’s broader GHG reduction framework:

• Article 7a now references RED’s transport sub-targets and emission accounting methodologies.

• Harmonized GHG calculation methods are implemented for fuels across the internal market.

Repeal of Directive 2015/652

Council Directive (EU) 2015/652 (which previously established calculation methods and reporting obligations under Directive 98/70/EC) is repealed, as its provisions are now fully integrated and harmonized within the RED framework and the Union Database mechanisms.

Adaptation Notice under the Renewable Energy Directive (EU RED)

This text has been adapted in accordance with the guidelines set forth by the Renewable Energy Directive (EU RED). In our efforts to ensure transparency, accountability, and alignment, we have carefully reviewed and incorporated EU RED principles into the content. This adaptation process reflects our commitment to high-quality, accurate, ensuring that the information presented adheres to internationally recognized standards.