Agneev Mukherjee, Pieterjan Debergh, Metin Bulut, Miet Van Dael, Roel Degens, Giuseppe Cardellini (VITO), Peter Moser, Knut Stahl (RWE)
Download here: https://eco2fuel-project.eu/wp-content/uploads/2025/08/EU-Regulatory-compliance-report-on-efuels.pdf
Summary
Renewable Fuels of Non-Biological Origin (RFNBOs), defined in European Union (EU) legislation as ‘liquid and gaseous fuels whose energy content is derived from renewable sources, excluding biomass’, are a central part of the EU’s decarbonisation strategies. However, the regulatory scenario with respect to RFNBO production and use in the EU is intricate, and different items of the ‘Fit for 55’ package must be considered to get a holistic picture of the prevailing legislative incentives and hurdles.
The most relevant item of the Fit for 55 package is the revised Renewable Energy Directive (RED III). RED III imposes a RFNBO-specific sub-target on the EU transport sector, with at least 1% of its energy consumption required to come from RFNBOs by 2030. Additionally, RED III also allows the energy provided by RFNBOs to count double towards renewable energy targets, so as to increase the attractiveness of these fuels which are typically more expensive than fossil fuels. RFNBO deployment also receives support from other parts of ‘Fit for 55’. The ReFuelEU aviation initiative, for example, requires 1.2% of aviation fuels in the EU to be synthetic fuels by 2030, rising to 35% in 2050, while the FuelEU maritime regulation, like RED III, allows for RFNBOs to be double counted.
While RFNBOs can in theory be produced by numerous routes, nearly all present-day production relies on hydrogen production via electrolysis. Other methods such as the electrochemical reduction of carbon dioxide are however under development. The EU has outlined criteria that a fuel must fulfil in order to qualify as a RFNBO. One important criterion is that RFNBOs must only be produced using ‘additional’ renewable electricity, as opposed to replacing existing renewable electricity use. Another is that RFNBOs must achieve a GHG reduction of at least 70% compared to fossil fuels.
This latter criterion is not very difficult to achieve by most electrolysis or thermocatalytic processes, as the renewable energy used to make the RFNBO is assumed to have zero emissions. However, the CO2 source used to make carbon-containing RFNBOs is an important consideration here. Under RED III, captured emissions from combustion of non-sustainable fuels for electricity production will be considered ‘avoided emissions’ only up to 2035, with emissions from other uses of non-sustainable fuels considered avoided emissions up to 2040. It is very difficult to meet the GHG reduction threshold without subtracting these ’avoided emissions’ from the RFNBO GHG emissions, effectively meaning that RFNBOs after these dates must be made using direct air capture (DAC) or biogenic carbon. These carbon sources are typically more expensive than the inadmissible ‘point’ sources such as cement or steel plants, which is likely to further raise RFNBO prices.
The absence of a grandfathering clause in RED III, combined with the 20 year-plus amortisation period required for new e-fuel plants, will make any upcoming RFNBO plant based on fossil CO2 sources infeasible. Another potential ramification might be the favouring of non-carbonaceous RFNBOs like hydrogen and ammonia by producers and users as these are unaffected by this clause.