Additionality rules for RFNBOs

What are RFNBOs and RCFs?

RFNBO = Renewable fuel of non-biological origin
  • Usually translated as e-fuel (produced from electricity)
  • Includes green hydrogen and green ammonia, but also e-diesel, e-methanol, e-SNG, ...
  • Combined target with Annex IX-A biofuels of 5.5% of energy supply in transport for 2030, with at least 1% for RFNBOs (Provisional agreement RED III)
Visual of renewable fuel of non-biological origin
RCF = Recycled carbon fuel
  • Non-renewable fuel made from non-recyclable waste streams
  • For example, synthetic diesel or methanol made from municipal solid waste or industrial waste gases
  • Member States may choose whether or not to count RCFs towards national renewable energy targets in transport

Delegated act RFNBO additionality

The Delegated Act on additionality rules defines under which conditions hydrogen, hydrogen-based fuels or other energy carriers can be considered as an RFNBO → Agreement reached in trilogue.

Ensuring that RFNBO production contributes to increased renewable electricity deployment

  • This can be done via a direct or an indirect connection (see section below)
Additionality principle

The RFNBO unit sources renewable electricity equivalent to the amount used for the production of the RFNBO, either on their own site or via power purchase agreements (PPAs) under the following conditions:

  • the renewable electricity generating unit came into operation not earlier than 36 months before the RFNBO unit.
  • the renewable electricity generating unit did not receive any (net) subsidy

Controversy: The additionality clause does not apply to RFNBO production plants commissioned before 2028.

Temporal correlation – Until 2030, renewable electricity must be generated within the same month as the electrolyser is used for producing the RFNBO. After 2030, it even has to be produced within the same hour. Exceptions can be made for grid-balancing purposes.

Geographic correlation – The electrolyser used for RFNBO production should either be in the same 'bidding zone' where the renewable electricity is generated, or in a connected bidding zone if prices there are equal or higher.

Direct and indirect connection

Visual of the direct connection
Via direct connection – If the used renewable electricity production facility is also connected to the grid, the installation must make use of smart metering to track the renewable electricity volumes actually used for the electrolyser.
via indirect connection – If certain requirements are met the fuel can still be considered as fully renewable (thus as RFNBO):

- Controversial: RFNBO can be produced from the grid if the average emission intensity of that bidding zone (often MS level) < 18 gCO2eq/MJ. In practice, this applies in France and Sweden (due to high nuclear share).

- The RFNBO unit is used for grid balancing in a so-called imbalance settlement period.
Visual of the indirect connection

Certification of RFNBOs

  • The delegated act specifies that certification by means of national or international voluntary schemes recognised by EC is needed to demonstrate compliance with the set criteria. (e.g. by ISCC)
  • For this, fuel producers need to provide information demonstrating compliance with the requirements:
    - the amount of electricity used to produce the RFNBO;
    - the amount of renewable electricity generated by the installations generating renewable electricity, regardless of whether they are directly connected to an electrolyser and regardless of whether the renewable electricity is used for the production of the RFNBO or for other purposes;
    - the amounts of RFNBO produced by the fuel producer.
  • Information on the website of the Netherlands Emissions Authority (Nea) is not in line with the latest delegated act:
    - Use of Guarantees of Origin (GO’s) to make fossil electricity count as renewable electricity (this is very similar to what is depicted as a Power Purchase Agreement in the delegated act).
    - Use of GO’s for fossil hydrogen to be considered as renewable – This is not possible under the EU ruleset.

What needs to be proven for RFNBO production?

  • The electricity used for the production of RFNBOs must be carbon-neutral (renewable and/or nuclear) and cohere with additionality principles
  • Carbon Capture and Usage (CCU) credits must not have already been claimed under a different provision of EU law.
    + For example, a steel mill with carbon capture and reuse for e-fuel production cannot claim emissions reductions. Otherwise (if it did), the e-fuel could not double-claim that its emissions are cancelled out, which makes it impossible to reach the minimum 70% greenhouse gas reduction.
    + As another example, a biofuel may not receive CCU credits when calculating its greenhouse gas intensity under the RED, if the captured CO2 is used to produce RFNBOs
  • Similarly, industrial sites subject to ETS prices must continue to pay ETS allowances for captured CO2 that is used to produce RFNBOs. For electricity-producing installations, the use of CO2 from fossil sources is only allowed until 2036 for the production of RFNBOs. For all other industrial emissions, CO2 from fossil sources is allowed until 2041.

Eligible sources of carbon for RFNBOs

Eligible CO2 for the production of RFNBOs comes from:
Factory icon, representing an ETS-obligated facilityWind icon, representing Direct Air CaptureBubbles icon, representing a geological CO2 source.
An ETS-obligated facility that already paid for the ETS allowance.

Only allowed until:

- 2036 for electricity-producing installations.
- 2041 for other industrial installations.
Direct air capture (DAC).
The combustion of RED-compliant biofuels, RFNBOs or RCFs (that did not receive credits for carbon capture and replacement).
A geological CO2 source which previously released CO2 naturally.