Update on RED II. Pine Chemical Association Orlando Meeting 20 April 2017

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1 Update on RED II Pine Chemical Association Orlando Meeting 20 April 2017

2 Renewable Energy Directive (RED) Directive of the European Union (EU) Establishes an overall policy for the production and promotion of energy from renewable sources in the EU Requires the EU to fulfil at least 20% of its total energy needs with renewables by 2020 to be achieved through the attainment of individual national targets. All EU countries must ensure that at least 10% of their transport fuels come from renewable sources by 2020 Biofuels are instruments helping EU countries to meet their 10% renewables target in transport Related legislation: RED I from Valid for Indirect Land Use Change (ILUC) directive amending RED I from To be implemented by EU member states by September 2017 valid until RED II Revision of original RED I for period currently being discussed 2

3 The EU co-decision process Commission Takes initiative Consultations with stakeholders Commission Proposal Parliament Amendments Council Approved Member States implementation Not approved Council Common Position Parliament Conciliation EP/Council Common Position Approved Second reading Not approved Member States implementation 3

4 RED II process and timeline The legislative proposal was published on 30 November 2016 by the European Commission Next steps: The European Council and the European Parliament will develop their own opinion on the European Commission legislative proposal Trialogue negotiations between the three institutions will take place where each institutions will present their opinion and discuss to form a common opinion on how the legislation should look like in the end Co-legislation process will take around 2 years - possibly longer New legislation RED II expected to be in place from 2021 to 2030 The European Commission proposal was critizized by the Impact Assesment Scrutinity board and rejected twice No clear definition for advanced biofuels or criteria for listing of feedstock in Annex IXa are proposed No impact assessment was carried out by EC on the feedstocks listed in Annex IX. 4

5 RED II targets for RED-II proposes binding targets for renewable energy in transportation (RES-T) for period (1,5% in ,8% in 2030) - RES-T target includes subtarget for advanced biofuels. The sub-target for advanced biofuels covers energy supplied to road vehicles and railway ( aviation and shipping not included). - Conventional biofuels do not longer contribute to RES-T target. - A specific target for advanced biofuels (3,6% of RED-T targets) based on Annex IX A list. - Annex IXb fuels do not contribute to advanced biofuels target (3,6%) but they do contribute to 6,8% target 5

6 RED II proposes An obligation on European transport fuel suppliers to provide an increasing share of renewable and low-carbon fuels, including advanced biofuels, renewable transport fuels of non-biological origin (e.g. hydrogen), waste-based fuels and renewable electricity A cap on the contribution of food-based biofuels towards the EU renewable energy target to minimize the Indirect Land-Use Change (ILUC) impacts 7% in 2021 and going down progressively to 3.8% in 2030 Remove the double counting principle Definition for a residue - CTO is a product 6

7 RED II proposes List of raw materials for advanced biofuels (Annex IX) similar to Annex IX of ILUC directive (being currently implemented in EU member states - valid until 2020) List A includes tall oil (CTO) and tall oil pitch among other materials as raw materials for advanced biofuels A stringent criteria for GHG-reduction for biofuels. EC has CO2-steering approach in renewable energy policy: at least 50 % from installations built before 5 October % for biofuels from installations from 5 October 2015; 70 % for biofuels from installations starting operation after 1 January

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