KEF, Alm.del - 2020-21 - Bilag 252: Regeringens høringssvar til Europa-Kommissionens offentlige høring vedr. revision af VE-direktivet, fra klima-, energi- og forsyningsministeren

Klima-, Energi- og Forsyningsudvalget 2020-21
KEF Alm.del Bilag 252
Offentligt

The

Danish Government’s Response to

the Public Consultation

on the Revision of the Renewable Energy Directive

Date

26 February 2021

Danish key priorities for the Renewable Energy Directive and principles for EU regulation

The revised Renewable Energy Directive should:



Increase the EU-level target for renewable energy to 45%.

Adopt a more ambitious approach to sustainability requirements for woody biomass

for energy, incl. strengthened requirements for climate sustainability and biodiversity.

Support the development of strategically important technologies, such as Power-to-X,

with high greenhouse gas emission (GHG) saving potential in hard to abate sectors.

Further incentivize cost-effective GHG reductions and increase the uptake of energy

from renewable energy sources (RES) in the heating and cooling sector.

Ensure comprehensive alignment with the other elements in the

“Fit for 55 package”

order to ensure cost-effective reductions of GHGs across sectors

Build on the strategies adopted in 2020 on Energy System Integration, Hydrogen, the

Renovation Wave and Offshore Renewable Energy as valuable reference points for the

successful implementation of the “Fit for 55”-package,

incl. the revision of the Renew-

able Energy Directive.



The European Council conclusions of 11 December 2020 provide the guiding prin-

ciples on how to achieve the climate targets. Specifically, to deliver those collec-

tively by the EU in the most cost-effective manner possible and in a way that pre-

serves the EU’s competitiveness.

On this basis, Denmark

fully supports the Commission’s approach regarding

re-

newable energy and encourages the Commission to consider modernizing the pol-

icy framework in order to ensure that the energy sector can maintain its role as a

driver in the transition of the EU’s economy

and society.

Increasing the EU-level target for renewable energy in 2030

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KEF, Alm.del - 2020-21 - Bilag 252: Regeringens høringssvar til Europa-Kommissionens offentlige høring vedr. revision af VE-direktivet, fra klima-, energi- og forsyningsministeren

Denmark fully agrees with the Commission’s assessment that

achieving the EU

emissions reduction target of at least 55% by 2030 necessitates an accelerated

clean energy transition with renewable energy at its core.

The energy sector will be the main contributor to the projected overachievement of

the 2030 climate target, and it must be at the centre of an ambitious effort to realize

the enhanced climate target of at least 55 percent cost-effectively by 2030 and to

become climate neutral by 2050. To achieve this, Europe needs to transform its en-

ergy system fundamentally. The

Strategy on Energy System Integration

provides a

viable pathway for achieving this with its focus on high shares of renewable energy

and integration of different energy systems through electrification.

Denmark notes that the Commission estimates that achieving the increased climate

target for 2030 will require renewable energy reaching 38% to 40% of gross final

energy consumption by 2030. However, Denmark believes that the European en-

ergy sector should deliver a larger share of the EU's reduction target and suggests

increasing the binding EU-level target for renewable energy in 2030 to 45 pct. The

falling price of renewable energy technology means that an even higher share of

renewable energy is indeed possible.

It is important that the energy system provides sustainable, economically efficient

alternatives to fossil fuels and in this way facilitate decarbonisation of the economy

and support the transition in other sectors. This will also emphasize

Europe’s posi-

tion as a powerful innovation hub for green industries including the development of

key energy technologies such as offshore wind and Power-to-X with significant

commercial potential as well as strategic importance to EU’s transition towards cli-

mate neutrality by 2050 and meeting the goals of the Paris agreement.

Ensuring

bioenergy’s sustainability

Denmark finds it important to strengthen

REDII’s

sustainability criteria further in or-

der to mitigate climate and environmental risks, including for biodiversity, associ-

ated with the use of certain sources for bioenergy.

In this context, Denmark would like to refer to the Danish political agreement of 2

October 2020:

Sustainability requirements for woody biomass for energy.

The

agreement introduces additional legal requirements for the sustainability of biomass

from wood as compared to those set out in RED II, including strengthened require-

ments regarding climate sustainability and biodiversity. The reason for the more

ambitious requirements is

–

among other things

–

that the requirements in the cur-

rent REDII are not assessed to sufficiently ensure the sustainability, including cli-

mate sustainability and biodiversity of the woody biomass. Hence, Denmark en-

courages the Commission to propose EU sustainability criteria for woody biomass

that match level of ambition in the Danish political agreement. In addition to this,

Denmark also underlines the need for improvement of LULUCF regulation in the

EU.

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KEF, Alm.del - 2020-21 - Bilag 252: Regeringens høringssvar til Europa-Kommissionens offentlige høring vedr. revision af VE-direktivet, fra klima-, energi- og forsyningsministeren

The Danish requirements sets stricter sustainability criteria for forest biomass than

the RED II in a number of areas:

1) Forest biomass from countries with declining carbon storage in forests

should not be used unless it concerns wood from certified forests or residu-

als, thereby ensuring the climate sustainability of biomass as much as pos-

sible.

2) Greenhouse gas savings are required for existing plants

3) Higher demands are placed on greenhouse gas savings in the production

chain

4) Sustainability of biomass and greenhouse gas emission requirements sav-

ings for smaller plants

5) Woody biomass from areas outside forests is covered by requirements

6) Verification of 3rd party is required throughout the chain

7) Industrial plants are covered by requirements

8) Importers and producers of biomass for households are subject to require-

ments

9) Residual products from the wood industry are covered by requirements

10) An additional biodiversity requirement is set

All points can serve as reference points for strengthening EU minimum sustainabil-

ity criteria. However, points 1-3 above should be highlighted, as they are estimated

to have the highest actual impact on the climate sustainability of woody biomass.

Danish experts stand ready to further elaborate and discuss the ten points in detail

with a view to potentially applying them at EU level.

Renewable energy in transport, incl. the promotion of renewable hydrogen

It is essential to increase efforts to decarbonize the transport sector in the coming

years in order to achieve the EU emissions reduction target of at least 55% by 2030

and climate neutrality by 2050.

Key components for achieving this are accelerating electrification of the transport

sector in parallel with decarbonisation of the electricity system as well as promoting

indirect electrification of hard to abate sectors such as aviation and shipping

through the production of fuels from renewable energy sources (RES fuels) with

high greenhouse gas emissions (GHG) reductions potential.

To ensure cost-effective GHG reductions and the development of new technologies

that will unlock GHG reductions in hard to abate sectors, it is crucial that the multi-

ple regulatory instruments the EU has at its disposal are calibrated accordingly.

Hence, the revision of the transport section of the RED-II should contribute to

achieving two overarching objectives: 1) to support cost effective GHG reductions

in conjunction with other legislative instruments; 2) to support the development of

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KEF, Alm.del - 2020-21 - Bilag 252: Regeringens høringssvar til Europa-Kommissionens offentlige høring vedr. revision af VE-direktivet, fra klima-, energi- og forsyningsministeren

strategically important technologies with high GHG saving potential, such as pro-

ducing renewable hydrogen derivatives through power-to-X technologies for use in

hard-to-decarbonise sectors.

Addressing regulatory overlaps to ensure cost efficient GHG emission reductions

There is regulatory overlap between the transport Renewable Energy Source target

(RES target) in REDII (minimum share of 14 % renewables in transport) and the

Fuel Quality directive (FQD) concerning the usage of RES fuels. This has primarily

resulted in a technology lock-in for using 1st generation biofuels in the EU. These

fuels have a questionable climate impact. Denmark finds that the FQD and the

-regulation requirement to emissions from passenger cars and vans are more

efficient tools for incentivising cost efficient GHG emission reductions in the

transport sector than the current transport RES-target in RED-II. The framework

from the FQD has the advantage of being technology neutral with a focus on cra-

dle-to-grave emissions rather than pure blending.

Therefore, Denmark considers it necessary to establish a clear distinction between

the priorities promoted via the RED and those promoted via other regulations. The

objective is to ensure a cost efficient green transition by avoiding double regulation

and minimizing the regulatory burdens for businesses and consumers. Ideally,

there should only be one target for the transport sector, building on elements from

both RED-II and FQD.

t is uncertain if the current national RES target for transport

in RED-II contributes to the two overarching objectives mentioned above in an effi-

cient way. Hence, Denmark encourages the Commission to consider removing the

national RES target for the transport sector, and replacing it with legislation target-

ing the objectives detailed above. However, the RED-II framework

can

still offer

new opportunities for promoting renewable fuels of non-biological origin (RFNBOs),

for instance by establishing stronger sustainability criteria. This is in line with Den-

mark’s

view that REDII facilitate decarbonisation in other sectors by providing af-

fordable clean energy for electrification and conversion to derivatives that can be

more broadly utilised.

Denmark supports extension of the ETS to cover also road transport to provide a

carbon price to support and supplement effective sectoral legislation in driving CO

reductions in transport across the EU.

Promoting renewable hydrogen and its derivatives in the EU

Large-scale development and deployment of renewable hydrogen and its deriva-

tives as alternatives to fossil fuels is a key priority for Denmark. Denmark supports

efforts to promote the production and use of renewable hydrogen not only with the

aim of achieving national and European climate goals, but also of increasing com-

petitiveness and securing economic growth and jobs in the energy sector.

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KEF, Alm.del - 2020-21 - Bilag 252: Regeringens høringssvar til Europa-Kommissionens offentlige høring vedr. revision af VE-direktivet, fra klima-, energi- og forsyningsministeren

The market for RFNBOs is expected to be rather limited, as they are still more

costly than fossil-based alternatives, such as gasoline, diesel and hydrogen pro-

duced from fossil fuels. Denmark strongly supports targeted initiatives to revise leg-

islation in order to accelerate demand for RFNBOs that can replace fossil fuels in

sectors such as aviation and shipping, where direct electrification is not a viable op-

tion. Denmark notes that an important tool to boost demand for RFNBOs is through

specific CO

emission reduction requirements, such as those set up by the Fuel

Quality Directive (FQD).

Denmark welcomes the Commission’s work to introduce a clear

and standardized

terminology for renewable hydrogen. Denmark will contribute to these efforts and

remains committed to ensuring a common, comprehensive definition, in accord-

ance with the European Hydrogen Strategy. Moreover, Denmark supports the de-

velopment of a certification system for renewable and low-carbon fuels, based on

cradle-to-grave emissions. By providing the necessary documentation for end us-

ers, a certification system can contribute to increasing the value of green fuels and

thus stimulating demand

–

both nationally and internationally.

The market for RFNBOs could be stimulated further by introducing a common Eu-

ropean reduction/blending mandate for sustainable aviation fuels with high emis-

sions reductions potential. Such a mandate should be set up as a minimum require-

ment that allows member states to implement a more ambitious mandate at na-

tional level. Demand-stimulating measures such as the proposed CO

-reduction or

blending mandate should be implemented with a reasonable time horizon to ensure

that the development, production and supply of sustainable aviation fuels will be

able to adapt to the increased demand. Moreover, it is imperative to ensure regula-

tory coherence with other relevant legislation at European level, including the sus-

tainability criteria for renewable fuels set out in the RED-II. Finally, such a blending

mandate should include a sub-target for RFNBOs in order to boost demand.

Denmark notes that multiple counting mechanisms that exist in the RED-II do not

apply to non-biomass based RES fuels, which means that multiple counting mecha-

nism is not RE-technology neutral. Denmark wants the RED-II to create a market-

pull towards new advanced RES fuels within e.g. aviation. If the transport RES tar-

get in RED-II is not removed this can to a certain extent be done by applying the

multiple counting mechanism to RFNBOs.

Developing more specific ILUC values and strengthening the sustainability criteria

Finally, it should be the ambition to develop more specific ILUC values, which can

be applied by all Member States. Where the Member States cannot come to an

agreement on ILUC values, the individual Member State should have the mandate

to implement such values nationally. Moreover, Denmark proposes to strengthen

the current sustainability criteria and to make it possible for member states to apply

even stricter sustainability criteria in national legislation.

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KEF, Alm.del - 2020-21 - Bilag 252: Regeringens høringssvar til Europa-Kommissionens offentlige høring vedr. revision af VE-direktivet, fra klima-, energi- og forsyningsministeren

Renewable energy in heating and cooling

Denmark supports the Commission’s ambition to speed up the decarbonization of

the heating and cooling sector in order to ensure that it contributes effectively to

achieving the EU emissions reduction target of at least 55% by 2030. Denmark

notes that there is a gap between the baseline projection for the share of RES in

EU’s heating and cooling sector in 2030 (33%) and the

share the Commission esti-

mates is necessary (40%) to realize the EU’s

increased

emissions reduction target.

Article 23 in RED-II sets a target of raising the share of renewable energy in the

heating and cooling sector by 1.3 percentage points each year towards 2030. Den-

mark supports the current exemption rules from article 23.

Denmark notes that the Commission has presented the option to increase this tar-

get in accordance with the increased climate target. While Denmark does not rule

out supporting an increased target RES target in heating and cooling, the first prior-

ity is to ensure that the regulation does in fact deliver cost-effective GHG reduc-

tions. Therefore, Danish support for a RES target in the heating and cooling sector

–

increased or not

–

is contingent on a revision of the current regulation that further

incentivizes the uptake of RES in the sector. To this end, Denmark has two pro-

posals the following adjustments to RED-II and one proposal for further analysis:

(1) Electricity and gas produced by renewable energy sources utilized for heat-

ing and cooling can be included in fulfillment of the yearly raise: By includ-

ing use of electricity and gas from the grid produced by RES in the calcula-

tions of reaching the RE target in the heating and cooling sector, there will

be a greater coherence with the way of calculating in the transport sector.

Furthermore, it will support a sustainable energy system, because including

RES electricity and gas allows member states to focus on making a coher-

ent energy system.

(2) The list of regulatory instruments used to raise the share of renewable en-

ergy in the heating and cooling sector is expanded: There appears to be

various ways to fulfill RE targets depending on whether the member state

has a high or a low existing share of RES. Member states with a high share

of RES energy would need more intrusive instruments to phase out fossil

fuels. Therefore, Denmark suggests that member states are allowed to use

a wider range of regulatory instruments such as prohibition and require-

ments in order to reach RE targets and phase out fossil fuels completely.

The opportunity to reach an exemption from the renewable energy target for heat-

ing and cooling in art. 24 litra 6 by establishing efficient cogeneration based on fos-

sil fuels should be evaluated: It is possible for member states to reach the RE tar-

gets by having a share of efficient district heating and cooling above 90 pct. As co-

generation is included in the definition of efficient district heating or district cooling,

it is possible to reach the RE targets by having a large share of cogeneration that

could be based on fossil fuels. Denmark is interested in evaluating this rule.

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