Dutch Biofuels Policy

Dutch Biofuels Policy
In May 2011, the Dutch legislation was published implementing the European Renewable Energy Directive (RED, 2009/28/EC) and Fuel Quality Directive (FQD, 2009/30/EC) (see EU biofuel policies). This legislation, which replaces the 2007 Transport Biofuels Act, shall come into force with retroactive effect from January 1, 2011. Implementation, inspection and enforcement of this legislation is the responsibility of the executive organisation biofuels of the Dutch Emissions Authority (Nederlandse Emissieautoriteit, NEa).

The implementation of the RED and FQD in the Dutch legislation and regulations is linked to the Dutch Environmental Management Act. The detailed implementation is established in:

• Decree on renewable energy in transport (implementation RED)
  - Regulation on renewable energy in transport

• Decree on air pollution fuels (implementation FQD)
  - Regulation on air pollution fuels.

These documents contain a detailed description of the policy and information on the implementation of the legislation. The following is a summary of the main aspects.

• Objectives of the RED and FQD
• Obligations for companies arising from the RED and FQD
• Administration regarding compliance with obligations

Objectives of the RED and FQD
The RED requires Member States that in 2020 at least 10% of the energy used in transport must be derived from renewable sources. This not only concerns biofuels, like previous targets emerging from the Biofuels Directive in 2003, but also renewable electricity and hydrogen. The Fuel Quality Directive states that, from 1 January 2011 onwards, fuel suppliers must report annually on the greenhouse gas intensity of the fuels and energy that they have sold to the transport sector. Greenhouse gas intensity refers to the amount of greenhouse gas emissions over the entire life cycle of the fuel, per unit of energy. EU Member States are also required to oblige fuel suppliers to gradually reduce the greenhouse gas intensity of the fuels they supply by at least 6% in comparison with the year 2010, before 31 December 2020.
Biofuels will play an important role in achieving the objectives set by both the RED and the FQD. Another common ground between the RED and FQD is that the two directives contain (the same) sustainability requirements for biofuels. Only biofuels that have been demonstrated to meet European sustainability requirements count toward the objectives mentioned above.

Obligations for companies arising from the RED and FQD
The Dutch legislation implements the RED target of 10% renewable energy in transport in 2020 (road vehicles and mobile machines) and places targets for the coming years: 4.25% in 2011, 4.5% in 2012, 5.0 % in 2013 and 5.5% in 2014. Companies that supply biofuels to the Dutch market are referred to as the “registration-obliged companies”.. In achieving the obligatory targets mentioned above, both the petrol and diesel markets must include a minimum percentage of 3.5% biofuels. For the time being, untaxed red diesel supplied to inland navigation is not covered by the obligation.

In order to be eligible for counting towards the renewable energy obligation in transport, the biofuel must meet the European sustainability criteria. This must be ??verified by an independent expert (verifier). The new legislation, just as the Regulation on double counting of better biofuels that entered into force in 2009, provides for that biofuels produced from wastes, residues, non-food cellulosic material and cellulosic material under certain conditions may be double-counted in meeting the obligation (see Double counting).

In addition to liquid biofuels, from 2011 onwards, also biogas (provided it is sustainable) and renewable electricity may be counted towards the targets if they have been supplied to road vehicles and/or mobile machines. Biogas and electricity suppliers may choose to be included in the system ("opt-in") and sell their ‘over-performance’ to companies that must comply with the obligation. Renewable electricity that is supplied to electric road vehicles shall count 2.5 times towards the obligation.

Companies that are required to report on greenhouse gas intensity of transport fuels under the FQD are known in the Dutch legislation known as "reporting-obliged companies". This includes the same companies as the "registration-obliged companies” under the RED supplemented with suppliers of fuel to inland navigation and suppliers of LPG and CNG. A group of companies can collectively meet the reporting obligations under the FQD. The reporting requirements on greenhouse gas emissions from fuels covers road vehicles, mobile machines (including inland navigation), agricultural tractors, forestry equipment and the pleasure cruising sector. Ocean shipping is not included in this obligation.

From 2014, the companies that are required to report have to meet greenhouse gas intensity reduction target: 2% in 2014, 4% in 2017 and 6% in 2020. Biofuels that are used to achieve the reduction target shall, as in the annual obligation for renewable energy in transport, meet the European sustainability requirements. The total amount of electricity supplied to road vehicles (including the non-renewable part) counts 2.5 times towards the reduction target.

Administration regarding compliance with obligations
In 2011 and 2012 the administration for compliance with the annual requirement for renewable energy in transport builds upon the earlier Regulations concerning the administration of biofuels for road transport (see Dutch policy 2006-2010). Registered companies shall electronically submit to the NEa a completed biofuels balance (spreadsheet) within two months after the end of each half year. The reports on the greenhouse gas of fuels, of which the first will be in 2012, must be submitted electronically to the NEa before March 1 of the subsequent year. In 2013, the temporary administration for both Decrees will be replaced by a automated digital register that is managed by the NEa.

For both the temporary and definitive system, biofuel quantities can be traded administratively (biotickets). Registration-obliged companies can meet the obligation for renewable energy in transport by purchasing biotickets. In addition, reporting-obliged companies can comply with the mandatory reduction in greenhouse gas intensity by purchasing biotickets. The legislation sets a maximum to the administrative transfer of biofuels supplied in a previous year with the objective of using them for meeting the obligation in a subsequent year ("carry-over"). This restriction does not apply to physical biofuel stocks. For 2011 and 2012, 25% of the obligation of 2011 and 2012 can be met with biofuels that have been supplied to the market in the previous year. Physical and administrative biofuel stocks, which are transferred to a subsequent year, must still comply with sustainability requirements in force in that year.

More information on the verification of sustainability and the approval of voluntary sustainability systems for biofuels can be found on the website of the NEa (in Dutch).