Platform’s reaction paper to the proposal for the revision of the Renewable Energy Directive

Download PDF here

Renewable energy:
Our position on the revision of the directive

The Platform for Electromobility welcomes the timely revision of the Commission’s proposal for the RED (Renewable Energy Directive). This will be key in supporting the EU in reaching carbon neutrality, notably by advancing the case for an electrified, decarbonised and efficient transport sector. In fact, clean direct electrification is the most cost-effective way of decarbonising Europe and reaching the 2030 and 2050 climate targets.

Moreover, direct electrification of transport has accelerated in recent past years, and the pace is only expected to increase. According to a recent BNEF study, in order to reach 100% CO2 emissions reduction by 2035, some 67% of passenger cars sales in Europe will need to be electric by 2030.

This rapid, massive uptake of EVs has the potential to become – thanks to smart charging – a flexible asset for grid management and an opportunity for prosumer business models. It will also provide a boost to the increased and cost-effective penetration of renewable energy in the electricity system. The combination of EVs, their batteries and smart charging functionalities as sources of ancillary services for the distribution grid will clearly bring benefits in terms of RES (Renewable Energy Sources) integration. Electromobility and renewable energy therefore offer a win-win partnership.

In this context, the Platform welcomes the recognition of smart charging and, where appropriate, bidirectional charging for integrating transport in the energy system. Two aspects in particular stand out; 1) the relevance of the charging points located at long-time-parking spaces, and 2) that national regulatory frameworks do not discriminate against electric vehicles participating in the electricity markets.

However, we do believe there are certain key aspects that can still be further reinforced within the Commission proposal. These will help support EV uptake and lead to swifter decarbonisation of both the transport and energy sectors

Greenhouse Gas based mandate

The Platform for electromobility raises concerns over the shift from an energy-based target for transport to a greenhouse gas (GHG) metric. If we support the fact that a threshold expressed in terms of GHG provides a relevant tool for accelerating the decarbonisation of transport while guaranteeing technology neutrality among low-carbon technologies, it may – within the framework of the RED – add complexity to the metric. Furthermore, it does not seem to bring any genuine added value to boosting renewable energy when compared to the existing framework. In fact, multipliers are implicitly integrated in the GHG-emission calculation method, and the GHG-emission based target of 13% is equal to the 24-26% in final energy consumption considered by the European Commission in its public consultation.

Furthermore, given that currently 24 of 27 Member States implement an energy-based target, it should be noted that using such a metric will have an impact on the current implementation of the Directive; these countries will have to start from scratch again, having just finished transposing the current RED II. This could result in delays in meeting the RES-T target and the overall EU binding RES target. France, for example, is currently working on the implementation of its credit mechanism, aimed to have this enter into force by 2022 using an energy-based RES-T target. With the switch to an emission-based target, France would have to revise its credit mechanism almost immediately following its implementation, leading to further delays.

Platform Members therefore invite the Commission to provide further information on its motive and rationale behind introducing a new GHG emission-based transport target.

Inclusion of electricity in national compliance mechanisms

The Platform is pleased that the proposal levels the playing field between biofuels and electricity by including electricity in national credit systems for fuel supplier compliance. This is a feature of the Directive that we called for in an earlier communication. The proposal shall as well ensure level playing fields between zero emissions options, especially between electricity for BEVs and RFNBOs . For instance, hydrogen can claim credits for private charging while renewable electricity for electric vehicles is restricted to public recharging stations only.

Focusing specifically on ‘public’ recharging points is discriminatory and inefficient. This is because it excludes some 80% of electricity supplied to road vehicles and provides incentives for people to charge their cars at public charging points rather than at home, as well as for companies not to charge their trucks and buses at their depots. The scope of the electricity credit mechanism should therefore be expanded to include recharging stations more generally, encompassing both public and private ones. It should also be possible for such a credit mechanism to also be applied to other types of transport such as rail, aviation or shipping.

The text is unclear as to whether it would apply to charge point operators (CPOs) alone, or whether it would also apply to electricity suppliers.  Within the current proposal, this could lead to a situation with different incentive schemes resulting in confusion amongst actors and the relevant incentive schemes.

Permitting

The Platform supports the Commission’s proposal to tackle the remaining barriers, including those relating to permitting procedures. We welcome in particular the proposed publication of a guidance on best practices to accelerate the permitting of projects. We urge the European Commission to publish such a guidance swiftly and ensure the best practices are disseminated to local authorities. Nevertheless, the review of permitting administrative procedures must be urgently addressed in the short term in the RED III and not be left until 2024. This will be key to preventing bottlenecks that may hinder the achievement of national RES commitments and the deployment of renewable installations more generally. We also recall that this should be done in cooperation with grid operators in order to preserve the security/stability of the grid.

Coherence with the Alternative Fuels Infrastructure Regulation (AFIR) and the upcoming revision of the Energy Performance of Buildings Directive (EPBD)

The Platform calls for ensuring the consistency of the RED III with the new Regulation on the deployment of alternative fuels infrastructure. The current definition on smart charging and bidirectional recharging should be aligned and any change to the related definitions and provisions in one text should be made in the other.

Furthermore, given that the European Commission has integrated provisions on the private charging points regarding smart charging in the RED III, we would like to underline the necessity of ensuring their coherence with the upcoming revision of the EPBD, which addresses private charging in its Article 8.

Coherence with Battery Regulation

On the data-sharing requirements relating to batteries, the Platform recommends ensuring consistency with proposed requirements under the EU Battery Regulation proposal and avoiding any duplication. For example, new performance and durability requirements for batteries are already included in Article 10 of the Battery Regulation proposal.[1] Similarly, the information on the state of health of the battery is included in Article 14 of the proposal.[2]

 

 

[1] The UNECE has recently developed performance and durability requirements via GTR, and therefore may be directly applied by the EU.

[2]This is also regulated by UNECE GTR on in-vehicle battery durability, namely ‘State of Certified Energy’ (SOCE), or capacity fading, and ‘State of Certified Range’ (SOCR).


Platform comments the EU Renewable Energy Directive in light of the EU Green Deal

In the past years, electricity-based transport technologies, such as electric vehicles (EVs), have significantly developed and decreased in cost. These technological improvements and demonstrated benefits of electrification call for an improvement of the sectoral target for renewable energy in transport to better reflect the positive environmental contribution of electric transport, as part of the envisaged reopening of the Renewable Energy Directive 2018/2001 (RED II). In parallel, EU Member states’ National Energy and Climate Plans (NECPs)’ pledges show prospects for an accelerated deployment of renewables in the energy mix, and in particular in the electricity system, supporting the decarbonisation of transport along the full lifecycle of the fuel.

While many studies have demonstrated the scope for an increased volume of renewables in transport[1], it is critical that the Renewable Energy Directive’s framework for renewables in transport is revised to accelerate the electrification of the transport sector with renewable electricity generation.

The Platform therefore recommends introducing an obligation for Member states to introduce fuel-neutral credit trading mechanisms as a mean for obligated fuel suppliers to account for renewable energy used in transport.

The implementation of the RED II, which all Member states (MS) are required to transpose by June 2021, offers a great opportunity to accelerate EV uptake and the efficient penetration of renewable electricity in the transport sector. Yet, most MS and their national policies on renewable transport fuels still do not allow electromobility to contribute to the achievement of the RES-T target[2]. Most national policies still implement the RED II by means of a blending mandate imposed on the obligated parties, i.e the fuel suppliers. Yet, renewable electricity is not a drop-in fuel that can be blended and is not properly accounted in RES-T targets, creating a missed opportunity to properly reflect the decarbonisation of transport and creating a missed level playing field.

The introduction of fuel-neutral credit trading mechanisms could support the adaptation of the RED II framework to the accelerated electrification of transport.

Fuel-neutral credit trading mechanisms consists in requiring obligated parties to meet their renewable energy obligation by means of fuel-neutral credits, accounted in energy equivalent (kWh, KJ, Gcal or other). In parallel, fuel-neutral credits are allocated by a public authority to defined parties for each energy unit of renewable fuel used in transport. As for electricity, various possibilities exist concerning the party entitled to receive credits (charging station operator, electricity supplier, etc.). Obligated parties can then either acquire fuel-neutral credits by increasing blending in their fuel supply or by procuring credits from third parties through a dedicated platform. Such schemes have already been introduced in the Netherlands, in Germany, in California and in France, and are being elaborated in Canada[3]. The Platform believes credit revenues shall be used as a leverage to support electromobility in Member States.

Electricity credit mechanisms represent a low hanging fruit that could adequately value the contribution of renewable-based electromobility to the decarbonisation of transport. Importantly, they would also generate resources for the diversity of players in the electromobility sector without weighing on state budgets. For instance, credit revenues could support charging point operators to improve the business case of charging infrastructure and – as a result – accelerate the roll-out of the millions of chargers needed and help the EU reach its objective of establishing 1 million charging points by 2025, as set out by the European Commission in its European Green Deal communication[4].

Further, future credit trading mechanisms should follow the specific principles below, subject to implementation in Member states:

Fuel neutral credits should be granted for the renewable share of the electricity used in EVs, calculated on the basis of the share of renewable electricity in the national mix as close as possible to real-time.

This would incentivize for a better real-time match between the renewable generation and EV charging.

Future credit mechanisms should allow for the accounting of 100% renewable electricity used in transport.

As a principle and as specified in article 27 of the RED II, fuel neutral credits should be granted for the renewable share of the electricity used in EVs, calculated on the basis of the share of renewable electricity in the national mix in the previous maximum two-year period. Yet, Member states should also allow for the accounting of 100% renewable electricity supply to transport, such as electricity supplied through a direct connection to a renewable energy generator or via an innovative supply contract such as Power Purchase Agreement (PPA).

It should also be assessed how future credit mechanisms could account for the renewable kWhs charged at home or in the workplace

 

As most kWhs used by EVs will be charged at home or in the workplace and not at public chargers, it should also be assessed how future credit mechanisms could account for the renewable kWhs charged at home or in the workplace, which will also enable to maximize the share of electrons captured.

[1] Among other studies: 17% of final energy demand in transport will be renewable by 2030 (in final energy demand, without multipliers or subtargets) according to SolarPower Europe (2020). 100% Renewable Energy Europe

[2] Transport & Environment (2019) Using Renewable electricity in the Renewable Energy Directive

[3] On the Dutch, German and Californian example, see Transport & Environment (2019) Using Renewable electricity in the Renewable Energy Directive.

The government of Canada is considering establishing a clean fuel standard that will count and credit clean electricity used. Networked charging operators (including utilities operating charging) and, in its 2018 Proposed Regulatory Approach, proposed that automakers be able to participate using vehicle telematics in the crediting system and market.  Canada’s program is expected to start in 2022. For further information: https://ww2.arb.ca.gov/resources/documents/lcfs-electricity-and-hydrogen-provisions

https://www.emissionsauthority.nl/topics/themes/energy-for-transport

The French government is designing a crediting system too as part of the revision of its 2021 budget bill, in current article 15. For more information, see http://www.assemblee-nationale.fr/dyn/15/textes/l15b3360_projet-loi

[4] https://ec.europa.eu/info/sites/info/files/european-green-deal-communication_en.pdf