German federal cabinet adopts draft law on GHG quotas

In early February Germany’s federal cabinet has made a decision about the framework for the transposition of the Renewable Energy Directive (RED II). The most important decision in the measure, according to Germany’s Union for the Promotion of Oil and Protein Plants e.V. (UFOP), is the increase of the greenhouse gas (GHG) reduction obligation from the current 6 percent in 2021 to 6.5 percent in 2022, gradually increasing to 10 percent by 2026, then jumping to 14.5 percent in 2028 and ultimately hitting 22 percent in 2030.

The government states that, through biofuels, hydrogen and electric vehicles, renewable energy will make up 28 percent of transportation energy in 2030, even though the EU target is just half that at 14 percent.

For compliance, triple crediting in e-mobility has been introduced, and the cap for biofuels from cultivated crops, such as biodiesel from rapeseed oil, would be 4.4 percent throughout the period—relegating conventional biofuels to where they stand in today’s transportation energy mix. Biodiesel from animal fats and used cooking oil would be capped at 1.9 percent.

The minimum share of “advanced biofuels” from residues is 0.2 percent in 2022 and gradually increasing to 2.6 percent in 2030; any fulfillment beyond the minimum would be double credited.

The quota for “electricity-based kerosene” for the aviation market is 0.5 percent in 2026, 1 percent in 2028, and 2 percent in 2030.

Germany also intends to phase out palm oil biofuels by 2026.

“[We see] a need for improvement in the increase of the greenhouse gas (GHG) reduction obligation,” UFOP stated. “In view of the maximum emission levels specified in the Climate Protection Act for this sector, the Bundestag would have to gradually increase the GHG quota each year from 2022 in the upcoming legislative process. This would mobilize the available sustainably certified biomass potential.”

From a climate-policy perspective, UFOP questions the multiple crediting of e-mobility provided for in the draft bill. “The focus here is not on climate protection, but on a financing model for infrastructure development,” UFOP stated in response to the decision by the German federal cabinet. “This indirect additional subsidy is unacceptable, especially since billions are being spent from tax revenues to accelerate customer growth at charging stations. Here, the energy suppliers must accept the entrepreneurial risk.”

The German federal government must now significantly accelerate the expansion of renewable energy production, UFOP noted, especially since competition for green electricity will increase considerably as a result of the promotion of heat pumps and other customers from industry and the petroleum sector. “In this phase, sustainable biofuels are all the more important in helping to bridge this pent-up demand,” UFOP stated.

The organization also expects the economic effects of the pandemic to lead to people holding on to their gas- and diesel-powered vehicles longer. “However, climate change does not wait for a transformation according to wishful thinking,” UFOP stated. “The UFOP therefore appeals to the Lower House of Parliament, Bundestag, and Upper House, Bundesrat, to continue the fundamentally balanced and socio-politically responsible approach of an openness to technology in this law. The transformation process to new propulsion systems affects many livelihoods and families, including education and career choices. It would be irresponsible, also in view of the climate-protection policy in third countries, to rely unilaterally on a drive train that, due to the lack of expansion of renewable energies, would not be able to achieve the climate policy breakthrough in the next few years. The UFOP fears that otherwise vehicles with highly efficient combustion engines and state-of-the-art exhaust gas purification will be built there. Suppliers and vehicle manufacturers could move away at any time.”