G. EU Renewable Energy Regulation Case Study

As can be seen in Figure 28 below, the EU has over three decades of integrated approaches to energyclimate policy and laws.

Within the renewable energy EU regulatory framework are both policies and legislation, and underneath these are the policy and regulatory actions of each EU member country. An example of this kind of policy and regulatory development is the German Renewable Energy Sources Act, first adopted in 2000. This Act initially introduced a planned process to manage the transition to a low-carbon economy, including a transition to biogas production as a renewable energy source. The German legislation required the encouragement of renewable energy production, but with a requirement that, in each case, this had to make ecological sense and not generate conflict with the sustainability objectives of environmental conservation schemes. Regulations which encouraged biogas production were introduced in German over time from 2004 (Thrän et al., 2020). The first stage of this process was ‘the careful consideration of the overall conditions’ in the geographic area. The Institute for Energy and Environmental Research in Heidelberg coordinated ‘an analysis of the ecological impact of the generation and use of biogas in Germany taking into account legal and economic aspects, and recommendations were given to policy makers’ (Bioeconomy BW, 2012).

The 2009 European Union Renewable Energy Directive 1 (Directive 2009/28/EC) established a mandatory 20% target for renewable energy consumption by 2020, including 10% renewables target for transport fuels.

The directive also mapped out various mechanisms that Member States could apply in order to reach their targets, such as support schemes, guarantees of origin, joint projects, and cooperation between Member States and third countries, as well as sustainability criteria for biofuels (European Union, 2021)

The first renewable target was then legislated in Germany in 2012 in the Renewable Energy Act and all EU members were expected to produce national renewable energy progress reports every two years. These targets were revised upwards, with the 2018 EU Renewable Energy Directive II (RED II) (Directive 2018/2001), which increased the binding renewable energy target for 2030 to at least 32% and increased the transport target to 14%. In addition, it introduced a number of changes in the biogas context. Among other thing, RED II:

• mainstreamed renewables in the heating and cooling sector, with an annual increase of 1.3% renewables for heating and cooling;

• strengthened the EU sustainability criteria for bioenergy;

• introduced a bio-fuels certification scheme, and a 7% cap on first generation biofuels like palm oil, which increased CO2 emissions in road and rail transport; and

• introduced a 3.5% share in the transport sector for advanced biofuels and biogas by 2030, with an intermediary target of 1% by 2025.

The overall targets were modified again in 2021 to include an intermediate target of 55% net reduction in greenhouse gases by 2030. These changes were required to deliver on the European Commission Green Deal (European Comission, 2019) which seeks climate neutrality and they were:

• A new benchmark of 49% renewables use by 2030 for buildings;

• A new benchmark of a 1.1% annual increase in renewables use for industry;

• A binding 1.1% annual increase for the Member States in the use of renewables for heating and cooling;

• An indicative 2.1% annual increase in the use of renewables and waste heat and cooling for district heating and cooling;

• A target of a 13% reduction in the greenhouse gas intensity of transport fuels by 2030, covering all transport modes;

• A 2.2% share of advanced biofuels and biogas by 2030, with an intermediary target of 0.5% by 2025 (single counted); and

• A 2.6% target for renewable fuels from non-biological origin and a 50% share of renewables in hydrogen consumption in industry, including non-energy uses, by 2030 (European Union, 2021)

How these policy prescriptions are implemented nationally varies substantially, as does their use of different feedstock (Gustafsson & Anderberg, 2022). In this context, in the first 15 years of the renewable energy policy and legislative shift, Germany became the highest biogas producer in Europe, essentially through encouraging fuel crop production to produce biogas for electricity generation to feed-in to the electricity grid, but subsequent policy changes have sought to target biogas production differently, specifically towards biomethane production.

There are important lessons in the implementation of regulatory biogas incentives from the German experience, following the extensive development of the industry between 2000 and 2015. For example, the incentives to expand the production of corn to produce silage as feedstock for biogas production was assessed as problematic so far as sustainable use of land was concerned. The electricity supply contracts entered into by producers, which provided long term security financially, have tied them into this production. Many are unable to shift to biomethane production, which may well be more profitable. The use of biogas for electricity production was identified as economically inappropriate, as solar and wind energy resources have become much cheaper over that time. The goals for the industry are moving to focus biogas production as a peak load energy source to “fill in the gaps” when seasonal variation with solar and wind requires more energy from other sources for the electricity and sometimes heat supply (Willinger, 2020) Following this experience and the implementation of the revised EU Renewable Energy Directive (RED II) in 2018, further regulation was required (Thrän et al., 2020) and Figure 29 below sets the thematic representation which governs the German biogas industry.