The Third Wheel podcast series: ESG in Australia Episode 9

By Barbie-Lee Kirby and Charlee-Sue Frail

Episode 9 –  Wiyi Yani U Thangani (Women’s Voices) with Charlee-Sue Frail, Former advisor of Wiyi Yani U Thangani and Dusseldorp Forum board member

In this final episode for 2021, some very special guest hosts take the wheel! Barbie-Lee Kirby, Responsible Business & First Nations Engagement Executive and Allira Jeffery, HSF Graduate discuss Wiyi Yani U Thangani (Women’s Voices): Securing our Rights, Securing our Future, a once in a generation report led by the Aboriginal and Torres Strait Islander Social Justice Commissioner, June Oscar AO. Charlee-Sue Frail is an advisor to the commission and shares her experiences in the development of the report and capturing and responding to the rights, needs and aspirations of First Nations women and girls.

About this podcast series

We explore the topical Environment, Social and Governance issues of the day in Australia.

Each episode, Partners Timothy Stutt and Melanie Debenham are joined by an expert third wheel guest to explore the issues from their unique perspectives.

Mel is an expert on business-critical environment, planning, heritage and native title regulation in Australia. Tim specialises in ESG from a corporate governance perspective, including market disclosure, risk management and shareholder engagement/activism.

We wish to acknowledge the traditional custodians of the lands Mel and Tim are recording from, the Whadjuk people of the Noongar nation in Perth and the Gadigal people of the Eora Nation in Sydney. We wish to acknowledge and respect their continuing culture and the contribution they make to the life of this country.

Contacts

Timothy Stutt
Timothy Stutt
Partner, Sydney
+61 2 9225 5794
Melanie Debenham
Melanie Debenham
Partner, Perth
+61 8 9211 7560

The Third Wheel podcast series: ESG in Australia Episode 7

By Timothy Stutt and Melanie Debenham

Episode 7 – It’s not about the money, money, money with Lewis McDonald, Global Head of Energy for Herbert Smith Freehills

In this episode, Tim and Mel are joined by expert third wheel guest, Lewis McDonald, Global Head of Energy for Herbert Smith Freehills. Fresh from presenting at the 12th Annual Sustainable Innovation Forum (SIF) which took place alongside COP26 in Glasgow, Lewis observes the number of zeros committed to net zero, at least $133 trillion as announced by Mark Carney’s Glasgow Financial Alliance. He asserts that the real challenge is creating enough investable net zero projects for the money – through a public / private blend of government support to achieve scale and efficiencies, and the legal mechanisms to make novel projects work.

Missed an episode? Click here.

About this podcast series

We explore the topical Environment, Social and Governance issues of the day in Australia.

Each episode, Partners Timothy Stutt and Melanie Debenham are joined by an expert third wheel guest to explore the issues from their unique perspectives.

Mel is an expert on business-critical environment, planning, heritage and native title regulation in Australia. Tim specialises in ESG from a corporate governance perspective, including market disclosure, risk management and shareholder engagement/activism.

We wish to acknowledge the traditional custodians of the lands Mel and Tim are recording from, the Whadjuk people of the Noongar nation in Perth and the Gadigal people of the Eora Nation in Sydney. We wish to acknowledge and respect their continuing culture and the contribution they make to the life of this country.

Contacts

Timothy Stutt
Timothy Stutt
Partner, Sydney
+61 2 9225 5794
Melanie Debenham
Melanie Debenham
Partner, Perth
+61 8 9211 7560
Lewis McDonald
Lewis McDonald
Global Head of Energy, London
+44 20 7466 2257

The Third Wheel podcast series: ESG in Australia Episode 6

By Timothy Stutt and Melanie Debenham

Episode 6 – Asking the right questions with Brooke Massender, Global Head of Pro Bono for Herbert Smith Freehills

In this episode, Mel and Tim are joined by expert third wheel guest, Brooke Massender, Global Head of Pro Bono for Herbert Smith Freehills. Brooke discusses how ESG could be the roadmap that makes corporate purpose more meaningful – and why ESG is different this time around. Recorded on the cusp of the Australian Reconciliation Convention, she shares her optimism around cultural competency in organisations, and the need for increased representation of First Nations voices where decisions are being made anywhere and everywhere in Australia. Brooke closes with some practical tips for those prepared to move ‘from safe to brave’ – and the importance of asking uncomfortable questions.

Missed an episode? Click here.

About this podcast series

We explore the topical Environment, Social and Governance issues of the day in Australia.

Each episode, Partners Timothy Stutt and Melanie Debenham are joined by an expert third wheel guest to explore the issues from their unique perspectives.

Mel is an expert on business-critical environment, planning, heritage and native title regulation in Australia. Tim specialises in ESG from a corporate governance perspective, including market disclosure, risk management and shareholder engagement/activism.

We wish to acknowledge the traditional custodians of the lands Mel and Tim are recording from, the Whadjuk people of the Noongar nation in Perth and the Gadigal people of the Eora Nation in Sydney. We wish to acknowledge and respect their continuing culture and the contribution they make to the life of this country.

Contacts

Timothy Stutt
Timothy Stutt
Partner, Sydney
+61 2 9225 5794
Melanie Debenham
Melanie Debenham
Partner, Perth
+61 8 9211 7560
Brooke Massender
Brooke Massender
Partner, Sydney
+61 2 9225 5417

Getting to net zero in the energy sector: “practice makes cheap”

5 November 2021 was Climate Law and Policy day at COP 26 in Glasgow. I was lucky enough to speak on an expert panel hosted by the EBRD on “Reallocating International Capital and the Role of Law”. Wearing my McDonald Clan tartan tie, and beamed in via Zoom, I delivered an abridged version of the following. 

Hi, I’m Lewis McDonald and I lead the energy team at Herbert Smith Freehills.

Herbert Smith Freehills is a global law firm with a major focus on energy & infrastructure. Our clients are sponsors, banks and governments and our lawyers work on energy projects all over the world.

Personally, I’ve been lucky enough to work across all energy sub-sectors and to work on projects all over the world across a 20 year career in the energy industry.

It was fantastic to see Mark Carney announce that his Glasgow Financial Alliance for Net Zero now has $130 trillion committed to net zero.

That’s a lot of zeros committed to net zero. To put it into context, the annual GDP of the whole world is roughly $87 trillion.

So it seems we have all the money in the world available to get us to net zero.

There have been some doubts expressed about how these numbers add up. However, the key takeaway from the announcement is that it is a very very big number. One doesn’t need to quibble with the details, with numbers that large. The International Energy Agency (IEA) says we need to invest $5 trillion dollars per year into the energy industry to get to net zero. So it seems we definitely have enough to deal with the energy sector.  From a climate change perspective, it really matters what happens in the energy sector, as over 70% of global emissions are generated here.

I know from my conversations with companies in the energy sector around the world that there is no shortage of enthusiasm to invest in net zero projects.  Climate change and ESG are now two of the top issues discussed in their board rooms.

The problem is not availability of money, and it is not desire.

The real challenge is how to create enough investable net zero projects for all of that money to be invested into.

To get to net zero, we need the full range of technologies to be available. This is clear from all of the scenarios. However, a number of the technologies that we need are not currently investable.  For example, hydrogen, carbon capture and storage, nuclear, and some of the battery technologies.

For some of these types of projects the costs are currently too high and the technology for most of them is too raw.  For others, the required pay-back time may be too long without greater certainty.  So the market alone is not able to support them at present.  I know this – I started working on my first carbon capture & storage project in 2005… but the projects have not been supported and so they don’t happen. Projects like this just aren’t economically feasible without financial support.  Mark Carney’s money will not be attracted to them – there isn’t enough magnetic pull.  We need something more.

We have seen that the costs of technology come down as you get to scale and the costs of financing come down as you increase certainty.  It wasn’t that long ago that solar and wind needed subsidies to compete with fossil fuels. This is not the case anymore. The subsidies that were provided to solar and wind over the past 15-20 years, together with obligations to invest in renewables and carbon pricing, have created a massive surge of interest in these projects around the world. Onshore wind and solar are truly magnetic in their own right, and they are booming globally. We don’t need to talk about them at these conferences anymore. They are away.

Over time, subsidies for onshore wind and solar have been tapered and eventually removed, and we have now seen exponential growth in these projects all over the developed and developing world. There are some fantastic graphs from a study released by Oxford University in September that show very clearly how costs fall and energy output rises over time. They are remarkable.

As for the other net zero technologies (hydrogen, carbon capture etc), we have already developed the legal mechanisms to create these “first of a kind” (FOAK) net zero projects and to make them work. Regulated Asset Base (RAB) models and Contracts for Difference (CFDs). These mechanisms have been shown to work across massive public infrastructure projects (such as the £4.2bn Thames Tideway project in the UK) and for the very biggest large-scale energy projects (such as the £22bn Hinkley Point C nuclear project in the UK).  The CFD mechanism has been modified from that developed for nuclear and used for offshore wind in the UK. Companies bid against these model CFD contracts to create the lowest possible pricing for offshore wind, which drives efficiencies and brings the price down. It’s quite brilliant, really. Lawyers at our firm and at other firms in London have been responsible for designing these legal mechanisms, in conjunction with accountants, economists, engineers, sponsor companies and Government.

So, there is a reason why the UK has taken a leadership position in offshore wind – it has created the most investable projects, using these mechanisms.  It’s the same reason why onshore wind and solar projects have proliferated. These projects were initially supported by subsidies in the form of feed-in tariffs and renewable obligation certificates, and they got better and cheaper as they got to scale. In some cases, wind and solar are now the cheapest and the most efficient energy solutions available, as well as the cleanest.  We’ve just been involved in some mega solar projects in India and the Middle East and the energy prices achieved there are eye-wateringly low.

The point is, once knowledge is gained, and efficiencies are achieved in one part of the world, these are then available everywhere and to everyone. This is perhaps the main way that the UK and other OECD countries can really lead the world get to net zero.

We unfortunately can’t solve the climate problem with wind and solar alone. The issues with intermittency are well known. However, we can use the same approach we took with solar and wind, and with nuclear and public infrastructure, to support the new net zero technologies, including hydrogen and carbon capture.  Lawyers have a huge role to play in working with private sector clients, banks and governments to create investable projects in the new net zero technologies. A blend of public and private involvement is needed.

It will require a lot of public funding at first (in some cases tens of millions, hundreds of millions or even billions for individual projects), but as we gain more practice, the costs will fall, and the support will taper. This is the essence of the UK Government’s net zero strategy. The more countries that adopt this approach, the better. After all, practice makes cheap.  Just ask any engineer.

Firms like ours, and the companies we work for, want to get these methodologies right for net zero projects in the UK and other OECD countries, so that they can be exported all over the world.  With our solution-oriented mind-set and bank of experience, we’ve already helped our clients to create investable conventional and renewable energy projects in some of the most difficult to invest in countries in the world. I was myself recently involved in an $11bn project financing for an energy project in Mozambique. This one project will double the GDP of Mozambique. Anything is possible, when you really put your mind to it.

We urgently need to replicate these mechanisms and this effort, this commitment, for the new net zero energy technologies and projects. To speed up development of these projects, we need to get more governments around the world doing what the UK is doing: nominating which kinds of projects they are going to back with public money – and then getting on with it.

This takes guts from our politicians. Not all the new projects and technologies will succeed. The urgency of the problem means we need to be prepared to move forward quickly with a “safe to fail” approach, and we need to share the risk and reward around.  Of course, we’re going to have to bring the public along with us, as it’s their money that will fund these projects. There is a huge role for the politicians here. Money from multilateral development banks like the EBRD and ABD, as well as philanthropic money and overseas aid is also going to be very useful to enable these projects – particularly in the developing world. Food for thought for Bill Gates and his friends…

It may be boring, but by supporting some of the new net zero energy technologies with bespoke legal mechanisms and public money, we will make them investable. The price will fall, the quality will rise, the returns will be more certain, and they will attract the trillions in private sector money. The money simply won’t be able to resist the magnetic pull of these projects – as we’ve seen with wind and solar. And then we can stop talking about them too.

So, let’s get to it and let’s work together to find a home for all of Mark Carney’s trillions!

Thank you.

Contact

Lewis McDonald
Lewis McDonald
Partner, Global Head of Energy
+44 20 7466 2257

The Third Wheel podcast series: ESG in Australia Episode 5

By Timothy Stutt and Melanie Debenham

Episode 5 – The future is now! Renewable energy in Australia with Dr Cameron Kelly, Australian Renewable Energy Agency

In this episode, Tim and Mel are joined by expert third wheel guest, Dr Cameron Kelly, head of the Legal, Governance and Secretariat team at the Australian Renewable Energy Agency. Dr Kelly discusses Australia’s role in the global hydrogen economy, renewable technologies of the not too distant future and the role of micro-grids in delivering not only environmental, but social benefits for regional communities.

Missed an episode? Click here.

About this podcast series

We explore the topical Environment, Social and Governance issues of the day in Australia.

Each episode, Partners Timothy Stutt and Melanie Debenham are joined by an expert third wheel guest to explore the issues from their unique perspectives.

Mel is an expert on business-critical environment, planning, heritage and native title regulation in Australia. Tim specialises in ESG from a corporate governance perspective, including market disclosure, risk management and shareholder engagement/activism.

We wish to acknowledge the traditional custodians of the lands Mel and Tim are recording from, the Whadjuk people of the Noongar nation in Perth and the Gadigal people of the Eora Nation in Sydney. We wish to acknowledge and respect their continuing culture and the contribution they make to the life of this country.

Contacts

Timothy Stutt
Timothy Stutt
Partner, Sydney
+61 2 9225 5794
Melanie Debenham
Melanie Debenham
Partner, Perth
+61 8 9211 7560

The Third Wheel podcast series: ESG in Australia Episode 4

By Timothy Stutt and Melanie Debenham

Episode 4 – Climate change litigation with Mark Smyth

In this episode, Mel and Tim are joined by expert third wheel guest, Mark Smyth, a partner in our litigation practice advising companies in relation to environmental, climate change and ESG issues, including responding to shareholder activism and defending ESG litigation. Mark shares the litigation themes he is seeing regionally and globally, including regulatory movements on greenwashing and the latest activity in the Federal Court regarding Environment Minister v Sharma case.

Missed an episode? Click here.

About this podcast series

We explore the topical Environment, Social and Governance issues of the day in Australia.

Each episode, Partners Timothy Stutt and Melanie Debenham are joined by an expert third wheel guest to explore the issues from their unique perspectives.

Mel is an expert on business-critical environment, planning, heritage and native title regulation in Australia. Tim specialises in ESG from a corporate governance perspective, including market disclosure, risk management and shareholder engagement/activism.

We wish to acknowledge the traditional custodians of the lands Mel and Tim are recording from, the Whadjuk people of the Noongar nation in Perth and the Gadigal people of the Eora Nation in Sydney. We wish to acknowledge and respect their continuing culture and the contribution they make to the life of this country.

Contacts

Timothy Stutt
Timothy Stutt
Partner, Sydney
+61 2 9225 5794
Melanie Debenham
Melanie Debenham
Partner, Perth
+61 8 9211 7560
Mark Smyth
Mark Smyth
Partner, Sydney
+61 2 9225 5440

The Third Wheel podcast series: ESG in Australia Episode 3

By Timothy Stutt and Melanie Debenham

Episode 3 – Innovation in Modern Slavery with Human Rights Resources and Energy Collaborative’s Shaeron Yapp and Gemma Wilford

In this episode, Tim and Mel are joined by two representatives from the Human Rights Resources and Energy Collaborative, Shaeron Yapp (South32) and Gemma Wilford (Fortescue Metals), who talk about practical approaches to implementing human rights diligence and remediation in significant global businesses.

Missed an episode? Click here.

About this podcast series

We explore the topical Environment, Social and Governance issues of the day in Australia.

Each episode, Partners Timothy Stutt and Melanie Debenham are joined by an expert third wheel guest to explore the issues from their unique perspectives.

Mel is an expert on business-critical environment, planning, heritage and native title regulation in Australia. Tim specialises in ESG from a corporate governance perspective, including market disclosure, risk management and shareholder engagement/activism.

We wish to acknowledge the traditional custodians of the lands Mel and Tim are recording from, the Whadjuk people of the Noongar nation in Perth and the Gadigal people of the Eora Nation in Sydney. We wish to acknowledge and respect their continuing culture and the contribution they make to the life of this country.

Contacts

Timothy Stutt
Timothy Stutt
Partner, Sydney
+61 2 9225 5794
Melanie Debenham
Melanie Debenham
Partner, Perth
+61 8 9211 7560

The Third Wheel podcast series: ESG in Australia Episode 2

By Timothy Stutt and Melanie Debenham

Episode 2 – Mandatory ESG due diligence developments in the EU with Herbert Smith Freehills Head of Global Business and Human Rights practice Antony Crockett

In the second episode of our podcast series, Mel and Tim are joined by their expert third wheel guest, Antony Crockett, partner in our Hong Kong office. He leads HSF’s global Business and Human Rights practice and is a member of the firm’s ESG leadership group. Antony shares with our hosts what ESG means to him, mandatory ESG due diligence developments in the EU and Human Rights due diligence, along with some practical tips.

Missed an episode? Click here.

About this podcast series

We explore the topical Environment, Social and Governance issues of the day in Australia.

Each episode, Partners Timothy Stutt and Melanie Debenham are joined by an expert third wheel guest to explore the issues from their unique perspectives.

Mel is an expert on business-critical environment, planning, heritage and native title regulation in Australia. Tim specialises in ESG from a corporate governance perspective, including market disclosure, risk management and shareholder engagement/activism.

We wish to acknowledge the traditional custodians of the lands Mel and Tim are recording from, the Whadjuk people of the Noongar nation in Perth and the Gadigal people of the Eora Nation in Sydney. We wish to acknowledge and respect their continuing culture and the contribution they make to the life of this country.

Contacts

Timothy Stutt
Timothy Stutt
Partner, Sydney
+61 2 9225 5794
Melanie Debenham
Melanie Debenham
Partner, Perth
+61 8 9211 7560
Antony Crockett
Antony Crockett
Partner
+852 21014111

The Third Wheel podcast series: ESG in Australia Episode 1

By Timothy Stutt and Melanie Debenham

Episode 1 – Inaugural episode with ESG insights from Herbert Smith Freehills CEO Justin D’Agostino

In this first episode of our Australian ESG podcast Tim and Mel are joined by their inaugural third wheel, Herbert Smith Freehills CEO, Justin D’Agostino. Justin discusses what ESG means to him, how the firm approaches ESG as well as what he sees in the broader business community.

Missed an episode? Click here.

About this podcast series

We explore the topical Environment, Social and Governance issues of the day in Australia.

Each episode, Partners Timothy Stutt and Melanie Debenham are joined by an expert third wheel guest to explore the issues from their unique perspectives.

Mel is an expert on business-critical environment, planning, heritage and native title regulation in Australia. Tim specialises in ESG from a corporate governance perspective, including market disclosure, risk management and shareholder engagement/activism.

We wish to acknowledge the traditional custodians of the lands Mel and Tim are recording from, the Whadjuk people of the Noongar nation in Perth and the Gadigal people of the Eora Nation in Sydney. We wish to acknowledge and respect their continuing culture and the contribution they make to the life of this country.

Contacts

Timothy Stutt
Timothy Stutt
Partner, Sydney
+61 2 9225 5794
Melanie Debenham
Melanie Debenham
Partner, Perth
+61 8 9211 7560

Fit for 55 – EU increases use of energy from renewable sources by 2030 in proposed amendments to the Renewable Energy Directive

Reducing greenhouse gas emissions by 55% by 2030 entails a significant increase in the share of energy production from renewable sources in order to develop an integrated energy system.

In light of the new targets, the 32% share of renewable energy to be developed by 2030 set by the Renewable Energy Directive (RED II) is no longer sufficient and it will have to be increased to 38%-40%, according to the Climate Target Plan forecasts.

At the same time, it will be necessary to implement a series of cross-cutting measures in different sectors, in line with the energy system integration and the strategies for the development of hydrogen, offshore renewable energy and biodiversity.

In a nutshell, the objectives of the revisions proposed for RED II are to increase the use of energy from renewable sources by 2030, to foster a better integration of the energy system and to contribute to climate and environmental objectives, including the protection of biodiversity, also providing a response to the intergenerational concerns associated with global warming and the loss of biodiversity.

The revision of RED II is essential for two reasons: (i) to achieve the climate objective, and to protect the environment and health, and also (ii) to ensure Europe’s energy independence from third countries and contribute to the creation of a strong technological and industrial leadership of the European Union, capable of supporting employment and economic growth.

Background

In the European Commission’s view, acting at a European level, developing renewable energy policies common to all Member States is certainly more efficient and effective than individual actions by Member States and can jointly address the transition of the European energy system in a coordinated manner, avoiding excessive fragmentation of legislation and regulation and providing investors with greater certainty and stability.

Moreover, joint action ensures a net reduction in greenhouse gas emissions and pollution, protects biodiversity and exploits the advantages of the internal market, economies of scale and technological cooperation. In any case, the achievement of a higher share of energy produced from renewable sources will depend, in a final analysis, on the national contributions of each Member State: the more ambitious and cost-effective these are, the more effective the agreed common legal and political framework will have been.

In particular, the Commission considers it necessary for Member States to take action to simplify the authorisation procedures for the construction of renewable energy plants.

In the context of public consultations that preceded the publication of the ‘Fit for 55’, stakeholders pointed out that the lack of simplification of permits and administrative procedures is still the greatest barrier to the development of renewables. Simplifying administrative procedures would facilitate the phasing out of fossil fuels. In this regard, it should be noted that RED II had already introduced clear deadlines for the conclusion of authorisation procedures (generally two years), a single point of contact for applicants as well as the adoption of clear guidelines procedures. Through these provisions, which represent the political compromise reached in the RED II adoption phase, the aim was to tidy up the complex and time-consuming national procedures, which often bear disproportionate deadlines and rules.

The provisions of RED II, to date, have not been implemented in Member States (the transposition deadline was set for 30 June 2021). Therefore, despite requests from industry, the Commission has deemed premature to amend these specific provisions of RED II before any assessment of national implementing regulations can be carried out.

Key amendments

Definition of renewable fuels of non-biological origin

The first amendment concerns the definition of renewable fuels non-biological origin (advanced biofuels). The proposal also sets out the insertion of new definitions, including those of renewable fuels, bidding zone, smart metering system, recharging point, market participant, electricity market, industrial battery, domestic battery, electrical vehicle battery, state of health, state of charge, power set point, smart charging, regulatory authority, bidirectional charging, normal power recharging point, industry non-energy purposes, plantation forest and planted forest.

Public support schemes

Obligations to minimise the risks of unnecessary market distortions resulting from support schemes and to avoid supporting certain raw materials for energy production in line with the cascading principle are strengthened. It is also introduced the obligation to phase out, with some exceptions, support for electricity production from biomass from 2026.

Calculation of the share

The calculation method of the share of energy from renewable energy sources is amended so that (a) energy from renewable fuels of non-biological origin must be accounted in the sector in which it is consumed (electricity, heating and cooling or transport), and (b) the renewable electricity used to produce renewable fuels of non-biological origin is not included in the calculation of the gross final consumption of electricity from renewable sources in the Member State.

Cross border pilot project

Member States are obliged to implement a cross border pilot project within three years and to cooperate on the amount of offshore renewable generation to be deployed within each sea basin by 2050, with intermediate steps in 2030 and 2040.

Energy system integration

Other proposals regard enhancing energy system integration between district heating and cooling (DHC) systems and other energy networks, by requiring Member States to develop efficient DHC to promote heating and cooling from renewable sources (RES). In order to facilitate system integration of renewable electricity, the following measures are provided:

  • Transmission System Operators (TSOs) and Distribution System Operators (DSOs) are required to make available information on the share of RES and the greenhouse gas content of the electricity they supply – in order to increase transparency and give more information to electricity market players, aggregators, consumers and end-users;
  • battery manufacturers must enable access to information on battery capacity, state of health, state of charge and power set point to battery owners as well as third parties acting on their behalf;
  • Member States must ensure smart charging capability for non-publicly accessible normal power recharging points – due to their relevance to energy system integration; and
  • Member States must ensure that regulatory provisions concerning the use of storage and balancing assets do not discriminate against participation of small and/or mobile storage systems in the flexibility, balancing and storage services market.
Industries

With respect to industries, mainstreaming renewable energy in industry is given an indicative target of an annual average increase of renewable energy of 1.1 percentage points and a binding target of 50% for renewable fuels of non-biological origin used as feedstock or as an energy carrier. It also introduced a requirement that the labelling of green industrial products indicates the percentage of renewable energy used following a common EU-wide methodology.

Energy poverty

The recast of RED II also provided for an extended set of measures to force Member States to ensure the accessibility of measures to all consumers, in particular those in low-income or vulnerable households, who would not otherwise possess sufficient up-front capital to benefit.

Transport

RED II is also amended by increasing the ambition level of renewables in transport by setting a 13% greenhouse gas intensity reduction target, increasing the sub-target for advanced biofuels from at least 0.2% in 2022 to 0.5% in 2025 and 2.2% in 2030, and introducing a 2.6% sub-target for renewable fuels of non-biological origin.

This proposal also introduces a credit mechanism to promote electro-mobility, under which economic operators that supply renewable electricity to electric vehicles via public charging stations will receive credits they can sell to fuel suppliers who can use them to satisfy the fuel supplier obligation.

European Union database

The scope of the European Union database is extended so that it can cover other fuels, and not only those in the transport sector. This will enable the tracing of liquid and gaseous renewable fuels and recycled carbon fuels as well as their life-cycle greenhouse gas emissions. The database is the monitoring and reporting tool where fuel suppliers must enter the information necessary to verify their compliance with the fuel suppliers’ obligation.

More on the Fit for 55 suite of proposals

For more, see also our Decarbonisation Hub where you can also access our full series of posts – Fit for 55: A greener transition for Europe.

Contacts

Lorenzo Parola
Lorenzo Parola
Partner, Milan
+39 02 3602 1405
Andrea Leonforte
Andrea Leonforte
Senior Associate, Milan
+39 02 3602 1379