RED III (Renewable Energy Directive III)

RED III refers to Directive (EU) 2023/2413, the 2023 European Union directive amending the Renewable Energy Directive (the "RED"). It raised the EU's overall renewable-energy target to 42.5% of final energy consumption by 2030 (with an indicative 45%) and revised the transport sub-target framework, tightening the rules for biofuel sustainability, advanced biofuel quotas, and renewable fuels of non-biological origin (RFNBOs). RED III entered into force on 20 November 2023 and Member States were required to transpose it into national law by 21 May 2025.

Background and lineage

The original Renewable Energy Directive (RED, Directive 2009/28/EC) set a binding 20% renewable-energy target for 2020. RED II (Directive (EU) 2018/2001) raised the target to 32% by 2030 and introduced sustainability criteria for advanced biofuels, the cap on food-and- feed-crop biofuels, and the GHG-intensity reduction trajectory in transport. RED III layered on top of RED II in 2023, lifting the 2030 target and revising specific provisions in the transport sector.

Transport sub-target framework

RED III gives Member States two options for compliance with the transport sub-target:

• A binding 14.5% reduction in the GHG intensity of transport energy by 2030 relative to a fossil baseline, OR
• A binding 29% renewable-energy share of final energy consumption in transport by 2030

In either case, the directive mandates a 5.5% combined sub-target for advanced biofuels and renewable fuels of non-biological origin (RFNBOs) by 2030, with at least 1.0% from RFNBOs.

Sustainability criteria

RED III tightens the existing biofuel sustainability criteria from RED II Article 29. Biofuels must achieve at least a 65% GHG saving relative to a fossil comparator (raised from 60% in RED II) for installations that began operating after 1 January 2021. Feedstocks listed in Annex IX Part A (advanced) and Part B (used cooking oil, animal fats) carry different counting rules: Part A feedstocks count double toward the transport sub-target; Part B feedstocks are capped at 1.7% of transport energy supply.

Indirect land-use change

RED III maintains the RED II framework for indirect land-use change (ILUC) emissions. High-ILUC-risk feedstocks — palm oil and soy products that meet specific deforestation criteria — are gradually phased out from counting toward the renewable-energy target between 2023 and 2030 under Commission Delegated Regulation (EU) 2019/807. This phase-out is one of the most consequential elements of the directive's biofuel framework.

Member-State transposition

RED III is a directive, not a regulation, which means Member States implement it through national law. Each Member State publishes a National Energy and Climate Plan (NECP) describing its compliance pathway. The European Commission's Renewable Energy Progress Report (published every two years under Article 32 of RED II/III) tracks transposition and progress against targets. Transposition deadlines varied by article — the principal deadline was 21 May 2025.

Connection to U.S. biofuel exports

RED III's sustainability criteria, ILUC rules, and Member-State implementation choices have material consequences for U.S. biofuel exports to Europe. Used-cooking-oil-based biodiesel and renewable diesel — eligible for double-counting under Annex IX Part B — has been a substantial component of U.S. biodiesel exports to the EU. The Annex IX Part B 1.7% cap shapes the absolute volume of UCO-based biofuel that can be counted in any given Member State's compliance.

Mass-balance sustainability framework

RED III maintains the mass-balance method for tracking sustainable biofuels through the supply chain, codified in Article 30 and Annex IV. Each consignment of biofuel must be accompanied by certification under a Commission-recognized voluntary scheme (e.g., ISCC EU, 2BSvs, RED-cert) that traces the feedstock back to its origin. The mass-balance framework allows physical co-mingling of certified and non-certified product streams at intermediate logistics nodes, provided the certified-product credit is preserved at the system level.

Sources

Directive (EU) 2023/2413 (RED III, OJ L 2023/2413, 31.10.2023). Directive (EU) 2018/2001 (RED II). Directive 2009/28/EC (RED). Commission Delegated Regulation (EU) 2019/807 (high-ILUC-risk feedstock criteria). EU national transposition tracker maintained by the European Commission DG Energy.