The European Council announced on October 9, 2023, that it had adopted two significant legislations, marking an important step. The first directive among the adopted legislations aims to nearly double the share of renewable energy consumption in the European Union (“EU”) by 2030. The second legislation targets the decarbonization of the aviation sector by accelerating the adoption of Sustainable Aviation Fuels (SAF).

The adoption of these new rules by the European Council is part of completing the last two key components of the European Commission’s “Fit for 55” roadmap. This roadmap sets a target of reducing greenhouse gas (GHG) emissions by 55% by 2030 compared to 1990 levels.

One of the significant legislations adopted by the Council is the “Renewable Energy Directive.” This directive mandates that by 2030, 42.5% of the total energy consumption in the European Union must come from renewable energy sources. It also encourages EU Member States to collectively aim for the decisive renewable energy target of 45%. In 2021, renewable energy accounted for approximately 22% of EU energy consumption.

The legislation significantly increases the EU’s renewable energy target beyond the existing 32% 2030 target and surpasses the initial 40% target proposed in the Fit for 55 roadmap, a strategy proposed by the European Commission to reduce greenhouse gas (GHG) emissions. This higher target was raised as part of the EU’s REPowerEU Plan in May 2022, as part of its strategy to rapidly reduce dependence on Russian fossil fuels in response to the Russia-Ukraine conflict.

The Renewable Energy Directive also includes a range of sector-specific sub-targets aimed at accelerating the adoption of renewable energies in industries where adoption has been slower. These sector targets encompass achieving at least 49% renewable energy share in buildings by 2030, gradual measures for increasing renewable energy targets for heating and cooling, a 14.5% reduction in transportation sector emissions by 2030 through increased renewable energy usage, an annual 1.6% increase in renewable energy use in industry, and the requirement to source 42% of hydrogen used in industry from non-biological renewable fuels (RFNBOs) by 2030 and 60% by 2035.

The Council has also adopted the “ReFuelEU Aviation” law, aiming to increase both the demand and supply of sustainable aviation fuel (SAF) with rules for fuel suppliers, aircraft operators, and airports. A significant portion of emissions in the aviation sector is due to fuel. SAF, typically produced from sustainable sources like waste oils and agricultural residues, is seen as a critical tool in decarbonizing the aviation industry in the short to medium term.

SAF producers estimate that the fuels could result in up to an 85% reduction in greenhouse gas emissions in comparison to traditional fossil-based fuels. However, efforts by airlines to increase SAF usage face significant challenges, including limited supply in the market and significantly higher prices than conventional fossil-based fuels.

Under new rules for aviation fuel suppliers, starting in 2025, the minimum SAF share at EU airports will increase over time to reach 70% by 2050. Additionally, there will be requirements for increasing the minimum share of synthetic fuels over time, starting in 2030 and continuing until 2050.

For aircraft operators, the rules include an obligation for flights departing from EU airports to refuel with only the fuel required for the flight and to ensure that the amount of aviation fuel purchased at EU airports annually is at least 90% of the annual required aviation fuel.

According to the European Council, these rules aim to prevent emissions from unnecessary fuel carriage and mitigate carbon leakage through the practice of “tankering,” where airlines intentionally carry extra fuel to avoid refueling at airports with higher SAF requirements.

The new law also necessitates the establishment of a labeling scheme regarding the environmental performance of airlines concerning SAF usage. This regulation aims to enable consumers to make informed choices and promote greener flights. In the last few months, several airlines have been accused or sued for greenwashing due to claims of uncertain or misleading SAF usage.

With the Council’s adoption, the new laws will be published in the Official Journal of the European Union to come into effect.