Renewable Energy Directive (RED III): Targets, Permitting, and Sustainability

Introduction

The Renewable Energy Directive (RED) has been the EU’s primary legislative instrument for promoting renewable energy since its initial adoption in 2009 (RED I, Directive 2009/28/EC). The directive was revised in 2018 (RED II, Directive 2018/2001/EU) and again in 2023 (RED III, Directive 2023/2413/EU) as part of the Fit for 55 package and the REPowerEU response to Russia’s invasion of Ukraine. RED III raises the EU’s binding renewable energy target to 42.5% of gross final energy consumption by 2030, with an aspirational 2.5% additional indicative increase (reaching 45%), nearly tripling the 22% share achieved in 2020.

The 2030 Target Architecture

Article 3 RED III establishes a binding Union-level target of at least 42.5% renewable energy in gross final energy consumption by 2030, expressed as a collective obligation. Member States must collectively deliver this target through their NECPs, though individual national contributions remain indicative. The directive introduces a gap-filler mechanism: where collective progress is insufficient, the Commission may take measures at Union level, including enhanced financial instruments, common projects, and statistical transfers between Member States.

Sector-specific sub-targets include: (a) 49% renewable energy in buildings by 2030 (Article 15a), an increase from the RED II indicative target, implemented through a combination of minimum shares of renewables in new buildings, district heating decarbonisation, and a “solar rooftop” obligation for public and commercial buildings; (b) a binding 1.1 percentage point annual increase in renewable energy used in industry (Article 22a), with 42% of hydrogen used in industry from renewable fuels of non-biological origin (RFNBOs) by 2030 and 60% by 2035; (c) a 14% reduction in greenhouse gas intensity of transport fuels by 2030 (Article 25), including a 5.5% sub-target for advanced biofuels and RFNBOs; and (d) a binding 0.8 percentage point annual increase in renewables in heating and cooling (Article 23).

Accelerated Permitting

RED III introduces significantly streamlined permitting procedures. Renewable energy projects are presumed to be of “overriding public interest” (Article 16a), enabling Member States to fast-track environmental impact assessments, species protection derogations, and planning permissions. Member States must designate “go-to” areas for renewables (Article 15b) — areas particularly suitable for renewable deployment where environmental risks are low — with simplified permit procedures (maximum one year). Outside go-to areas, permitting must not exceed two years for ground-mounted installations and one year for rooftop solar.

The REPowerEU provisions (incorporated into RED III) require Member States to ensure that the permit-granting process for solar equipment on artificial structures (buildings, car parks, infrastructure) does not exceed three months, and that the repowering of existing renewable energy plants is subject to a three-month permit process.

Guarantees of Origin

Articles 19–20 establish the Guarantees of Origin (GO) framework — electronic certificates proving that a given quantity of energy was produced from renewable sources. One GO corresponds to 1 MWh of renewable energy. GOs are issued by Member States, traded through registered markets (the Association of Issuing Bodies (AIB) European Energy Certificate System), and may be used to verify the share of renewable energy in a supplier’s fuel mix, support green electricity products, and satisfy corporate renewable sourcing obligations.

RED III requires that GOs for renewable hydrogen and RFNBOs be issued under a dedicated certification system, with additional criteria on additionality, temporal and geographical correlation, and renewable electricity sourcing (delegated acts under Articles 27–28).

Biofuels and Sustainability Criteria

The sustainability framework for biofuels, bioliquids, and biomass fuels (Articles 29–31) is among the most detailed in international law. To count towards renewable targets and qualify for financial support, biofuels must achieve greenhouse gas savings of at least 65% compared to fossil fuels (new installations from 2021) and must not be produced from raw materials sourced from high-carbon stock land (primary forests, wetlands, peatlands) or high-biodiversity areas.

RED III introduces a phase-out of palm oil-based biofuels (a primary cause of deforestation) by 2030 at the latest, and prohibits support for food and feed crop-based biofuels where the indirect land-use change (ILUC) risk is high. The ILUC Directive (2015/1513) established the methodology for classifying ILUC risk. Advanced biofuels (produced from residues, algae, waste) benefit from double-counting towards transport targets and receive priority support under national schemes.

Forest biomass sustainability criteria (Article 29(6)) require that biomass harvesting does not exceed the forest’s productive capacity, that forest regeneration is ensured, and that biodiversity protection zones and soil quality are maintained. The cascading principle (Recital 82 and Article 3(3)) prioritises material uses of biomass (timber, furniture, construction) over energy uses, supported by national cascading strategies.

Renewable Energy Communities

RED III (Article 22) strengthens the legal framework for renewable energy communities (RECs) — legal entities enabling citizens, local authorities, and SMEs to engage in renewable energy generation, consumption, storage, and sharing. RECs have the right to: (a) produce, consume, store, and sell renewable energy; (b) access all energy markets directly or through aggregation; (c) share renewable energy between members within the same building, multi-apartment block, or (at Member State option) same neighbourhood; (d) own or lease grid infrastructure necessary for their operations; and (e) benefit from enabling frameworks (simplified permitting, net-metering or feed-in tariffs for small installations, proportionate regulatory charges).

Cooperation Mechanisms

The directive preserves cooperation mechanisms from RED I and RED II, enabling Member States to meet targets jointly: statistical transfers (Article 8), where one Member State sells excess renewable energy statistics to another; joint projects (Article 9), involving renewable energy projects in one Member State financed by another; and joint support schemes (Article 11), harmonising national support frameworks. A Union renewable development platform (Article 11a) facilitates cooperation by matching Member States seeking statistical transfers.

Enforcement and Penalties

Member States must establish effective, proportionate, and dissuasive penalties for non-compliance with RED III requirements, including sustainability criteria violations, false GO declarations, and failure to meet permitting deadlines. The Commission may recommend corrective action where Member States are not on track to meet their NECP contributions to the 42.5% target, and may initiate infringement proceedings under Article 258 TFEU.