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To increase the share of climate-neutral fuels within the THG quota, the German government has set binding minimum quotas for advanced biofuels and RFNBOs. While the targets for advanced biofuels are currently feasible thanks to solid market coverage, the ambitious RFNBO quotas are still proving to be a strategic bottleneck given the current low availability.
UPDATE regarding the Act on the Further Development of the Greenhouse Gas Reduction Quota (THG Quota), passed by the German Bundestag in April 2026. A key part of the Act is the introduction of binding sub-quotas/minimum quotas for the use of advanced fuels and renewable fuels of non-biological origin (RFNBOs). These are intended to ensure that certain proportions of THG reductions in the transport sector are achieved through advanced biofuels and RFNBOs. In doing so, the legislator is going beyond a purely open-ended THG quota and actively steering demand towards technologically prioritized fuels that are particularly effective in terms of climate impact. These minimum quotas define clear demand paths for the individual fuel classes and have a direct impact on the demand volumes to be expected in the future.
Definition: Biofuels according to RED III
Biofuels are fuels produced wholly or partly from biomass, such as vegetable oils, sugar, starch, waste, or residues. RED III distinguishes between conventional biofuels and advanced biofuels, the latter of which are produced from raw materials listed in Annex IX Part A (e.g., waste and residues) and are intended to avoid land use conflicts. They must meet defined sustainability criteria and greenhouse gas reduction targets in order to be eligible for the THG quota. Advanced biofuels are specifically promoted through sub-quotas in order to support technologies that have a particularly significant impact on the climate.
Definition: RFNBOs according to RED III
Renewable Fuels of Non-Biological Origin (RFNBOs) are liquid or gaseous fuels produced from renewable electricity and non-biogenic feedstocks. These include, in particular, renewable hydrogen and fuels synthesized from it, such as e-methanol or e-kerosene. According to RED III, RFNBOs must meet strict requirements for “additionality,” temporal and geographical correlation of electricity generation, and minimum greenhouse gas reduction. The “additionality requirement” under RED III ensures that the electricity used to produce RFNBOs is generated in addition to existing renewable generation capacities. The aim is to prevent existing green electricity from being withdrawn from the electricity market and indirectly replaced by fossil-fuel-based electricity. Specifically, RED III requires RFNBO producers to source their electricity from newly built renewable energy plants that are linked to RFNBO production in terms of timing and economics. This is intended to ensure real additional greenhouse gas reductions and a system-friendly expansion of renewable energies.
The minimum quotas in percent refer to the total amount of energy in the fuel brought onto the market by the companies subject to the quota in each compliance year. The minimum quota for advanced biofuels will gradually increase from 2% in 2026 to 9% in 2040. The quota for RFNBO will increase from 0.1% in 2026 to 10% in 2040.
Die Generaldirektion des deutschen Zolls veröffentlicht jährlich die Statistiken zur THG-Quotenerfüllung. Für die letzten 5 Jahre (2022-2024) wurde im Durchschnitt eine Gesamtenergiemenge im Referenzwert aus der THG-Quote von 2.357.130.491 GJ gemeldet. Faktoren wie weitere Elektrifizierung des Verkehrssektors, Wirtschaftswachstum etc. wurden nicht berücksichtigt. Diese Energiemenge dient als Grundlage für die Betrachtung der nächsten 15 Jahre. Daraus ergeben sich die gesetzlich vorgegebenen Mindestmengen in TWh für den Einsatz von fortschrittliche Biokraftstoffe und RFNBOs. Diese werden erforderlich sein, um die jeweiligen Unterquoten im deutschen Verkehrssektor zu erfüllen.
The minimum amount of advanced biofuels will increase from approximately 13 TWh (~ 47 million GJ) in 2026 to almost 60 TWh (~ 212 million GJ) in 2040. Compared to the amount of advanced fuels supplied in 2024 of ~ 113 million GJ (of which ~ 27 million GJ is carried over from the previous year), it is clear that no supply shortage of advanced fuels is to be expected in the short to medium term (compared to minimum quantity of ~ 117 million GJ in 2033). It remains to be seen how the end of the inclusion of fuels from palm oil mill effluent (POME) in the THG quota will affect the availability of biofuels.
The minimum quantity of RFNBOs will increase from approximately 0.7 TWh (2,357,130 GJ) in 2026 to over 65 TWh (235.713.049 GJ) in 2040. As this minimum quota will take effect for the first time in 2026, there are no reliable data points available yet. According to market participants, there is currently little to no supply on the market, meaning that companies subject to quotas are likely to find it challenging to meet this obligation. It remains to be seen to what extent a market will develop here that offers an exciting source of revenue for RFNBO projects and attracts investment to promote new projects.
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