Renewable Energy Directive (RED) and NUTS2: What agri-supply business need to know
The processes that the UK has developed and implemented to meet Renewable Energy Directive requirements allows domestically grown crops to be used in domestic biofuels exported as a raw commodity or as a finished biofuel with full traceability and audit requirements.
Collaborative working between the Agricultural Industries Confederation (AIC), Red Tractor and Scottish Quality Crops has ensured the voluntary schemes developed in the UK have been maintained with the National Farmers Union (NFU) and the Agriculture and Horticulture Development Board (AHDB) heavily involved and are aligned with schemes in the European Union and globally.
All are audited to the necessary standard so domestically grown crops are not audited by overseas schemes and imported crops also meet the required standard.
- The EU Renewable Energy Directive was first introduced in 2009 as part of the EU's efforts to promote renewable energy and reduce greenhouse gas emissions.
- The directive set binding targets for all EU member states to increase their share of renewable energy in their overall energy consumption. The initial target was to achieve a 20% share of renewable energy by 2020. Over the years, the directive has been revised to set more ambitious goals, including a target of at least 42.5% renewable energy by 2030.
- Evidence on why biofuels had lower emissions than other fuels was required. To ensure alignment at European level a carbon calculator approach to assess typical emissions at regional level arising from the cultivation of the biofuel supply chain was agreed upon.
- The Directive included default values but if regions could provide defaults that were less or equal to these they could be used. These were known as ‘NUTS2 compliant’ regions and the values had to be approved by the EU. Farmers can also provide their own data to add value to their crop. NUTS 2 report is the colloquial name for the Regional emissions from the cultivation of Biofuels report
- Concern was raised about indirect land use change to produce sustainable biofuels which resulted in the introduction of an auditing process. In the UK this is carried out by Red Tractor and Scottish Quality Crops who have been approved by the EC to undertake this.
- REDII entered into force in November 2023 with Member States having until May 2025 to transpose it into national law. In parallel revised default numbers have to be produced and approved by the EU, this is led by the Department for Transport.
- Although the UK has left the EU it is still eligible to take part to produce compliant biofuels.
- Wheat and oilseed rape are grown domestically for biofuels with corn (maize) and oilseed rape also imported into the UK for refining.
- NUTS is now referred to as the International Territorial Levels (ITLs) in the UK although the structure remains the same.
- It is important to note that although originally intended to support the biofuels sector, the NUTS2 Report extends to all UK-traded bulk commodity crops and is about ensuring access to all markets, not just biofuels.
2009
The first Renewable Energy Directive (2009/28/EC) was adopted, setting binding national targets for EU member states, including the UK, to achieve a 20% share of renewable energy by 2020
2010
The first NUTS2 Report was produced.
2011
The UK transposed the 2009 directive into national law through the Promotion of the Use of Energy from Renewable Sources Regulations 2011 (SI 2011/243).
2012
AEA produced a revised version of their 2010 NUTS2 report for the Department of Transport which was adopted by the Commission.
2012
Red Tractor began auditing for compliance with RED following concerns about indirect land use and amendments to the grain passport to align it with RED. The updated passport including information necessary for demonstrating compliance with sustainability criteria. The supply chain simply passes the associated data downstream.
2018
The directive was revised (Directive (EU) 2018/2001), setting a new target of at least 32% renewable energy by 2030. However, the UK was in the process of leaving the EU and did not transpose this revised directive into national law.
2020
The UK officially left the EU on January 31, 2020, and entered a transition period during which EU law continued to apply.
2021
The UK-EU Trade and Cooperation Agreement (TCA) was signed, which includes commitments to promote energy efficiency and the use of renewable energy.
2021
AHDB produced a revised NUTS2 report which was not adopted by the Commission.
2021
The UK government set its own ambitious targets, including a commitment to cut greenhouse gas emissions by 78% by 2035 compared to 1990 levels, and to achieve net zero emissions by 2050.
July 2021
As part of the 'Fit for 55' package, the European Commission proposed raising the 2030 target to 40%.
2022
The REPowerEU Plan was introduced, proposing to further increase the 2030 target to 45% in response to the energy crisis following Russia's invasion of Ukraine
2023
The UK continued to develop its renewable energy policies independently, focusing on achieving its net zero targets and supporting the growth of renewable energy through various incentives and regulations.
March 2023
A provisional agreement was reached for a binding target of at least 42.5% by 2030, with an aim for 45%.
October 2023
The revised directive (EU/2023/2413) was published in the Official Journal of the EU.
November 2023
The revised directive entered into force on November 20, 2023.
July 2024
Deadline for EU member states to transpose specific permit-granting procedural reforms into national law.
2024
The UK government introduced new measures to support renewable energy, including the establishment of a Future System Operator to oversee the electricity and gas networks.
May 2024
The UK submits its updated NUTS2 default figures to the EU for approval.
May 2025
Overall transposition deadline for the main elements of the revised directive.
Renewable Energy Directive (RED)
The original Renewable Energy Directive (2009/28/EC) established a policy for the production and promotion of energy from renewable sources in the EU. It sets binding targets for all EU member states to increase the share of renewable energy in their energy consumption. The directive aims to reduce greenhouse gas emissions, enhance energy security, and promote technological innovation in the renewable energy sector.
More on RED
The RED requires the EU to fulfil at least 32% of its total energy needs with renewable energy by 2030.
Although the UK has left the EU it is still eligible to take part to produce compliant biofuels.
For domestic use, in order for biofuels to meet sustainability criteria and qualify under the UK Renewable Transport Fuel Obligation (RTFO), a way to demonstrate that biofuel meets these criteria is to use feedstocks produced under a recognised sustainability standard scheme.
Examples are those recognised by the European Commission as meeting sustainability criteria of the Renewable Energy Directive.
AIC's REDII Module - which can be audited alongside its Trade Assurance Scheme for Combinable Crops (TASCC) - is a recognised sustainability standard scheme by the EU.
Find all other recognised RED voluntary schemes on the European Commission's website.
Visit the Renewable Energy Directive (RED) topic page for more information about AIC's work in this area.
Nomenclature of Territorial Units for Statistics (NUTS)
NUTS is a geocode standard for referencing the subdivisions of countries for statistical purposes. NUTS2 regions are the basic regions for the application of regional policies.
More on NUTS
The Renewable Energy Directive requires the UK as a former Member State to assess the typical emissions at regional level arising from the cultivation step of biofuel supply chains.
Originally AHDB calculated regional figures for seven crops:
- winter feed wheat
- winter barley
- spring barley
- oats
- triticale
- oilseed rape
- sugar beet
Default values are also available for wheat, oilseed rape and sugar beet but the regulation permits the use of this regional cultivation data in the place of actual crop production data for the calculation of actual fuel chain GHG emissions.
The regional values reduce the administrative burden for farmers and the agricultural trade to produce farm-level emission data.
When reporting on biofuel supply chain GHG emissions, this figure can then be combined with GHG data for downstream emissions (i.e. the processing and transport steps of the supply chain).
The Agricultural Engineers Association (AEA) produced the original report in 2010, which was updated in 2012 and then signed off by the EU Commission in 2013.
AHDB led the 2021 update which was never signed off by the EU Commission. The Department for Transport (DfT) commissioned independent researchers ADAS in 2024 to produce the update required for the new REDII scheme.
However, only feed wheat, sugar beet and oilseed rape were calculated. Comments from the EU Commission were received in December 2024.
The NUTS2 values can be used as a benchmark by farmers as it sets a baseline for crop emissions against which they can aim for a lower figure.
This creates a case for updating the figures for other crops from the AHDB report, namely winter and spring barley, oats, field beans, field peas, feed and milling wheat.
Auditing Process
Farm assurance schemes Red Tractor and Scottish Quality Crops play a significant role in ensuring compliance with the Renewable Energy Directive II (REDII) in the UK as follows:
- Certification and Compliance: Red Tractor and SQC certify UK farmers to meet REDII standards, allowing them to access the biofuels market. This certification ensures that crops used for biofuels are produced sustainably
- Mass Balance System: Farmers must maintain a mass balance sheet, tracking all grain inputs and outputs. This system helps prevent double counting and ensures transparency in the supply chain.
- Land Use and Biodiversity: Red Tractor and SQC standards require proof that land used for biofuel crops has not been converted from highly biodiverse grassland since 2008. This helps protect important ecosystems.
- Location Tracking: The precise location of grain stores must be recorded, often using What3Words or GPS coordinates. This ensures traceability and compliance with EU requirements.
- Simplified Audits: By integrating RED requirements into their existing certification process, Red Tractor and SQC reduces the burden on farmers, avoiding the need for separate, specialized audits.
The Combinable Crops Passport includes a declaration that the load has been grown on land that meets the requirements of the RED Sustainability Criteria.
AIC's RED Module is designed to be incorporated into the Trade Assurance Scheme for Combinable Crops (TASCC) as an appropriate and auditable appendix.
TASCC is a UK-based scheme which deals with what happens to grains and pulses when they leave the farm to the end user. Its Participants are made up of merchants, hauliers, storage, and product testing facilities. Watch the video below to learn more.
The module ensure materials are compliant where participants demonstrate that any procured crops for biofuel use are compliant to the requirements of the RED through traceability and mass balance records.
Records should be in the form of the Combinable Crops passport (section 8 signed by the grower/storekeeper) or by the delivery documentation provided by the TASCC merchant. Evidence of compliance can only be accepted from those schemes recognised by the European Commission for all land-related criteria.
Union Database
The Union Database for Biofuels (UDB) is a digital platform established by the European Commission to enhance the traceability and transparency of biofuels and recycled carbon fuels within the EU market.
Currently, in a training, testing and onboarding phase, the UDB tracks the entire lifecycle of these fuels, from the sourcing of raw materials to their final consumption.
Key features of the UDB include:
- Traceability: It ensures that all consignments of renewable and recycled carbon fuels are traceable from their origin to their final use, helping to prevent fraud and double counting
- Transparency: By providing detailed information on the supply chain, the database supports market transparency and helps stakeholders verify the sustainability of biofuels
- Compliance: The UDB aids in meeting the EU's ambitious decarbonization targets by ensuring that biofuels comply with the Renewable Energy Directive (RED) standards
Areas to Consider and Address
- Additional crops to have updated calculations aligned with the NUTS2 methodology
- Delays in approval of NUTS2 values by the EU
- UKAS accreditation due to the challenge of the EU not recognising accreditation bodies outside of the EU
- Union Data Base readiness
- Potential for the RED system to be applied by the EU for a wider range of commodities as a benchmark for crop emissions plus calculating Scope 3 emissions for cereal supply chains
Authors
Vicky Robinson
Vicky Robinson is Head of Sustainability and is responsible for leading and co-ordinating AIC's work on sustainability.
Rose Riby
Rose Riby is Head of Combinable Crops and Seed. Having worked across these sectors for many years, she has a depth and breadth of experience in roles in grain trading, plant breeding and knowledge exchange at AHDB.
Gillian Barrow
Gill Barrow is Technical Manager for AIC Services. Gill is based at AIC Head Office, Peterborough and is responsible for the management and coordination of the AIC assurance scheme TASCC.