Brussels, 04 September 2024
WK 10938/2024 INIT
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AGRI
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INFORMATION
From:
General Secretariat of the Council
To:
Working Party on Energy
Subject:
Communication from the Commission: Guidance on the targets for the
consumption of renewable fuels of non-biological origin in the industry and
transport sectors laid down in Articles 22a, 22b and 25 of Directive (EU)
2018/2001 on the promotion of energy from renewable sources, as amended by
Directive (EU) 2023/2413
Delegations will find in the annex a communication from the Commission on guidance on the targets
for the consumption of renewable fuels of non-biological origin in the industry and transport sectors
laid down in Articles 22a, 22b and 25 of Directive (EU) 2018/2001 on the promotion of energy from
renewable sources, as amended by Directive (EU) 2023/2413.
WK 10938/2024 INIT
LIMITE
EN

EUROPEAN
  COMMISSION

Brussels, 2.9.2024
C(2024) 5042 final

COMMUNICATION FROM THE COMMISSION
Guidance on the targets for the consumption of renewable fuels of non-biological origin
in the industry and transport sectors laid down in Articles 22a, 22b and 25 of Directive
(EU) 2018/2001 on the promotion of energy from renewable sources, as amended by
Directive (EU) 2023/2413





EN

  EN

1.  INTRODUCTION
Directive (EU) 2023/2413 of the European Parliament and of the Council (1) which amends
Directive (EU) 2018/2001 of the European Parliament and of the Council (2) entered into force
on 20 November 2023. The amending directive introduces changes to the legislative framework
regulating renewable energy until 2030 and beyond. This guidance refers to the latest version
of  the  Renewable  Energy  Directive,  as  amended  in  2023,  as  “revised  RED”  or  “revised
Directive”.
The revised RED is a cornerstone of the European Green Deal and of REPowerEU in order to
reach the Union’s ambition to fight climate change and reduce the Union’s energy dependence
from  Russia.  It  increases substantially the level of renewable energy  ambition,  not  only  by
increasing the Union renewable energy binding target that needs to be collectively achieved by
2030  from  32%  to  42.5%  (with  an  aspiration  to  reach  45%),  but  also  by  adding  and
strengthening the sub-targets for renewables to be achieved across various sectors, including
in industry.
Industry accounts for approximately 25% of the Union’s energy consumption3 and is a major
consumer of fossil fuels, especially for heating and cooling purposes. Furthermore, fossil fuels
are used as feedstock for the production of industrial products, such as fertilisers, chemicals or
steel. Given the significant share of industry in the Union’s energy consumption, a substantial
increase of renewable energy penetration in this sector across the Union is required to achieve
its  renewable  energy  objectives.  Furthermore,  industrial  investment  decisions  today  will
determine the future industrial processes and energy options that can be considered by industry,
so it is important that those investments decisions are future-proof and avoid the creation of
stranded assets (Recital 59 of the revised RED).
The  revised  RED  includes  two  specific  provisions  (Articles  22a  and  22b)  focused  on
mainstreaming renewable energy in the industry sector. It provides incentives and obligations
for  Member  States  to  ensure  that  their  industry  can  switch  to  production  processes  using
renewable energy, such as renewable fuels of non-biological origin (“RFNBOs”), as fuel or
feedstock, instead of fossil fuels. It must be noted in this regard that the revised RED introduces
in Article 2, point 36, a new definition of RFNBOs which includes all uses of RFNBOs, and
not only the use of RFNBOs as a transport fuel as was the case in the previous definition in the
2018 RED.
In addition to an indicative target to increase the share of renewable sources in the industry
sector,  Article  22a  provides  an  obligation  for  Member  States  to  ensure  that  RFNBOs  will
partially replace their fossil fuel equivalents for final energy and non-energy purposes in their
industry  sector.  This  obligation  aims  to  promote  the  development  of  a  market  for  the
consumption of RFNBOs in industrial uses, which is necessary because RFNBOs are currently
more expensive than their fossil-based equivalent and are unlikely to be produced and sold on
market terms alone without regulatory intervention. The revised RED provides the option to

1 Directive (EU) 2023/2413 of the European Parliament and the Council of 18 October 2023 amending Directive
(EU) 2018/2001, Regulation (EU) 2018/1999 and Directive 98/70/EC as regards the promotion of energy from
renewable  sources,  and  repealing  Council  Directive  (EU)  2015/652  (OJ  L,  2023/2413,  31.10.2023,  ELI:
http://data.europa.eu/eli/dir/2023/2413/oj).
2 Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion
of the use of energy from renewable sources (OJ L 328, 21.12.2018, p. 82).
3 This share exceeds 30% combining final energy and non-energy consumption.

reduce the target of RFNBO in a Member State provided the conditions set out in Article 22b
are fulfilled.
The  general  deadline  for  the  transposition  of  the  provisions  necessary  to  comply  with  the
revised RED – including Articles 22a and 22b - is 21 May 2025.
The  Directive  further  establishes  binding  targets  in  the  transport  sector.  Next  to  the
achievement  of  the  overarching  targets  of  either  a  share  of  29%  of  renewable  energy  in
transport  or  a  reduction  of  the  emissions  intensity  of  transport  fuels  by  14.5%,  by  2030,
Member States are required to increase the share of RFNBOs to at least 1%. RFNBOs also
contribute  towards  a  combined  target  of  5,5%  for  RFNBOs  and  advanced  biofuels.  The
Directive further sets out rules how RFNBOs contribute towards the targets and how Member
States  should  promote  the  use  of  renewable  energy  in  transport  via  an  obligation  on  fuel
suppliers.
This Notice is intended purely as a guidance document for the purposes of transposing and
implementing the revised RED. It does not provide interpretation in the context of other legal
acts.
Only the text of the EU legislation itself has legal force. Any authoritative reading of the law
has to be derived from the text of the Directive and directly from the decisions of the Court of
Justice of the EU.
2.  SCOPE OF APPLICATION OF THE RFNBO TARGET IN ARTICLE 22A
Article 22a of the revised RED provides that “Member States shall ensure that the contribution
of renewable fuels of non-biological origin used for final energy and non-energy purposes shall
be at least 42 % of the hydrogen used for final energy and non-energy purposes in industry by
2030, and 60 % by 2035”.
Regarding the scope of application of the new mandatory target for RFNBOs in industry laid
down in Article 22a, the following sub-sections clarify the following concepts: (i) the concept
of  industry  (section  2.1),  (ii)  the  addressees  of  the  RFNBO  target  (section  2.2),  (iii)  the
calculation of the numerator (section 2.3) and (iv) the calculation of the denominator for the
purposes of complying with the target (section 2.4).
2.1. Definition of industry
Article 2(18a) of the revised RED defines “industry” as “undertakings and products that fall
under sections B, C, and F and under section J, division (63) of the statistical classification of
economic  activities  (NACE  REV.2),  as  set  out  in  Regulation  (EC)  No  1893/2006  of  the
European Parliament and of the Council”.4
Sections  B,  C  and  F  include  respectively  “Mining  and  Quarrying”,  “Manufacturing”  and
“Constructing”. Section J, division (63) includes Information service activities. From the latter
activities,  data  centres  represent  the  most  energy-intensive  activity  and  are  therefore  a  key
sector for the purposes of the indicative target in Article 22a. The definition of industry under
Article 2(18a) of the revised RED goes beyond the scope of the Eurostat guidelines for final

4 Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 establishing
the statistical classification of economic activities NACE Revision 2 and amending Council Regulation (EEC) No
3037/90 as well as certain EC Regulations on specific statistical domains (OJ L 393, 30.12.2006, p. 1).

energy consumption in industry as it covers also Section J, division (63) which is not covered
under  the  Eurostat  guidelines  on  reporting  of  energy  consumption  by  industry.  Eurostat
guidelines require mandatory reporting for industry under Section B, C and F (with voluntary
reporting  for  its  Divisions  41,  42  and  43).5  Mandatory  reporting  of  the  final  energy
consumption  for  data  centres  is  covered  by  the  guidelines  for  final  energy  consumption  in
services.6 The statistical guidelines on oil and gas require the collection of data on the use of
oil and gas for non-energy purpose in industry.7
Refineries are included under the definition of industry (Section C of NACE REV.2). However,
they have a special status when it comes to the consumption of RFNBOs and how they are
accounted for under the different targets of the revised RED, namely the targets for the increase
of renewable energy in the industry and in the transport sectors set under Articles 22a and 25
of the revised RED. The majority of fuels produced in refineries are used as transport fuels and
therefore they are accounted towards the targets of renewables uptake in the transport sector.
However, there are also refineries that produce fuels used for power generation (i.e. heavy fuel
oils),  oil  products  for  the  chemical  sector  and  even  solid  materials  (like  coke)  used  in  the
production of aluminium, steel, or fertiliser production. Moreover. there is a small number of
refinery products that are used both as transport fuels and as industrial products, such as MTBE
(Methyl tert-butyl ether) and methanol.
The allocation of hydrogen consumption at refinery level should be done on the basis of all the
different products produced with hydrogen at the end of the process, on an energy content basis,
and on an annual  basis at  refinery level.  This  should be done after excluding  the hydrogen
produced as a by-product and consumed within the refinery. If the refinery does not have clarity
on whether a product is used in the transport sector or as an industrial product, Member States
should  use  EU-level  data  to  determine  the  ratio  of  products  used  for  transport  fuels  or  as
industrial product.
RFNBOs  used  in  a  refinery  therefore  partly  contribute  towards  the  target  for  RFNBOs
consumption in transport as set in Article 25.2.(a) of the revised RED and partly towards the
target for RFNBOs consumption in industry set in Article 22a of the revised RED. The share
of the contribution may be established on the basis of the annual ratio of refinery products used
in transport and in industry, without exceeding the amount of hydrogen consumption allocated
to industry at refinery level.
Section  D  (Electricity,  gas,  steam  and  air  conditioning  supply)  is  not  included.  Therefore,
hydrogen used as fuel in central power plants or hydrogen used to produce commercial steam
do not fall under the scope of Article 22a, including the RFNBO target.
Since  January  2022,  the  Energy  Statistics  Regulation8  also  covers  data  collection  on  the
production and consumption of hydrogen and since January 2024 the transformations between

5 https://ec.europa.eu/eurostat/documents/38154/16135593/energy-consumption-industry-reporting-
instructions.pdf
6 https://ec.europa.eu/eurostat/documents/38154/16135593/energy-consumption-services-reporting-
instructions.pdf
7 https://ec.europa.eu/eurostat/documents/38154/16135593/Natural_Gas_Questionnaire_Instructions.pdf &
https://ec.europa.eu/eurostat/documents/38154/16135593/Oil_Questionnaire_Instructions.pdf
8 Commission Regulation (EU) 2022/132 of 28 January 2022 amending Regulation (EC) No 1099/2008 of the
European Parliament and of the Council on energy statistics, as regards the implementation of updates for the
annual, monthly and short-term monthly energy statistics, OJ L 20, 31.1.2022, p. 208–271 and Commission

hydrogen and other fuels. Mixtures of hydrogen and other gases are not included yet in the
Eurostat reporting instructions on hydrogen9.
To calculate the RFNBO target for industry, it is important that hydrogen used in industrial
processes and transported in the form of a mixture is taken into account when calculating the
amount of RNFBOs that are consumed in industry: in particular, the hydrogen in syngas (a
mixture of hydrogen and carbon monoxide) used as a feedstock for the production of chemicals,
and  the  hydrogen  in  a  mixture  of  hydrogen  and  nitrogen  (N2)  used  as  a  feedstock  for  the
production of ammonia.
National  statistics  are  already  gathering  data  on  hydrogen  on  a  voluntary  basis,  although  a
reporting requirement only applies from the year 2024 on. The Eurostat reporting instructions
on hydrogen10 currently allow for voluntary reporting of ammonia consumption, and they do
not  include  voluntary  report  of  methanol  yet.  Both  ammonia  and  methanol  are  derivative
products of hydrogen, and voluntary reporting by Member States is already encouraged.
The  Commission  will  support  as  soon  as  possible  the  tracking  of  the  share  of  RFNBO  in
industrial  hydrogen  consumption  via  the  SHort  Assessment  of  Renewable  Energy  Sources
(SHARES)11 tool.
2.2. Obligation addressed to Member States
The  RFNBO  target  included  in  Article  22a  of  the  revised  RED  applies  to  Member  States,
meaning  that  it  is  the  responsibility  of  Member  States  to  ensure  that  the  contribution  of
RFNBOs reaches the target. This is clear from the text of Article 22a and it is motivated by the
two following reasons: first, there is no market for RFNBOs today, because there is limited
production  of  RFNBOs  and  they  are  still  relatively  expensive  compared  to  fossil-based
equivalents.  Consequently,  regulatory  incentives  at  Union  and  national  level  are  needed  to
make RFNBOs available to industry and to promote the creation of a market for these products.
Member States should design the measures to achieve the RFNBO target for industry according
to  their  national  circumstances,  taking  into  account  the  different  levels  of  hydrogen  use  in
different sectors as well as how the availability of RFNBOs to certain industrial consumers can
support  their  transition  to  renewables-based  production  processes.  Second,  the  volume  of
hydrogen consumption in industry and the number of industrial hydrogen consumers differs
significantly among the Member States. Consequently, Member States can adapt their policies
according to their own specific circumstances and can make sure that in the implementation of
this obligation they ensure a level-playing field for hydrogen consumers.
The  obligation,  therefore,  does  not  apply  directly  to  hydrogen  consumers.  This  does  not
preclude Member States from setting mandatory quotas for RFNBOs consumption as one of
the possible measures to achieve the target. In such a case, it is important for Member States to
take  into  account  the  impact  that  mandatory  quotas  can  have  on  the  competitiveness  of
industrial hydrogen consumers. Quotas that are not backed by adequate regulatory measures

Regulation (EU) 2024/264 of 17 January 2024 amending Regulation (EC) No 1099/2008 of the European
Parliament and of the Council on energy statistics, as regards the implementation of updates for the annual,
monthly and short-term monthly energy statistics, OJ L, 2024/264, 18.1.2024.
9  In this case, a mixture is simply hydrogen together with one or more chemical components, but that are not
chemically linked.
10 See footnote 8.
11 The Short Assessment of Renewable Energy Sources (SHARES) tool developed by EUROSTAT focuses on
the harmonised calculation of the share of energy from renewable sources.

and State-aid compliant support mechanisms to compensate for the cost difference between
RFNBOs and fossil-based fuels could lead to carbon leakage and additional intra-EU or extra-
EU imports of products produced with fossil-based hydrogen. This would be in contradiction
with the objective of Article 22a to decarbonise the Union’s industrial sector. Furthermore, all
national  implementing  measures  should  be  designed  without  prejudice  to  the  TFEU  and
notably Article 28.
2.3. Calculation of the numerator
Paragraph 1(b) of Article 22a provides that “for the calculation of the numerator, the energy
content of the renewable fuels of non-biological origin consumed in the industry sector for final
energy and non-energy purposes shall be taken into account, excluding renewable fuels of non-
biological origin used as intermediate products for the production of conventional transport
fuels and biofuels”.
Thus, only renewable hydrogen and its derivatives falling under the definition of RFNBOs in
the revised RED12 and used in industry can contribute to the numerator, based on their energy
content. RFNBOs include renewable hydrogen and its derivatives that are compliant with the
definition provided in Article 2(36) of the revised RED and with the RFNBOs delegated acts13.
For the purposes of calculating the numerator, derivatives are considered products obtained as
direct derivatives of hydrogen, i.e. resulting from a chemical link between hydrogen with other
molecules. Products containing hydrogen but which are not direct derivatives of hydrogen (e.g.
fertilisers), or products produced using hydrogen as a reducing agent (e.g. direct reduced iron14)
would not be considered RFNBOs.
Paragraph 1(b) refers to RFNBOs “consumed in the industry sector” and therefore the RFNBO
target  laid  down  in  Article  22a  is  a  “consumption”  target.  This  means  that  RFNBOs  are
accounted in the numerator of the Member State where they are consumed in their final form
in the industry sector. In the case of RFNBOs that are derivatives of renewable hydrogen, the
renewable  hydrogen  used  to  produce  them  must  not  be  included  in  the  numerator  of  the
producing Member State15 (whether this is the same Member State where the RFNBOs are

12 The revised RED defines in Article 2 (36) RFNBOs as “liquid and gaseous fuels the energy content of which
is derived from renewable sources other than biomass”.
13 Commission Delegated Regulation (EU) 2023/1184 of 10 February 2023 supplementing Directive (EU)
2018/2001 of the European Parliament and of the Council by establishing a Union methodology setting out
detailed rules for the production of renewable liquid and gaseous transport fuels of non-biological origin,
C/2023/1087, OJ L 157, 20.6.2023 and Commission Delegated Regulation (EU) 2023/1185 of 10 February 2023
supplementing Directive (EU) 2018/2001 of the European Parliament and of the Council by establishing a
minimum threshold for greenhouse gas emissions savings of recycled carbon fuels and by specifying a
methodology for assessing greenhouse gas emissions savings from renewable liquid and gaseous transport fuels
of non-biological origin and from recycled carbon fuels, C/2023/1086, OJ L 157.
14 To be noted that in the case of stell manufacturing through the DRI process, the renewable hydrogen used as
reducing agent for the direct reduction of iron would be considered an RFNBO used in the industry sector. The
pig iron resulting from the direct reduction of iron using renewable hydrogen would not be considered an
RFNBO.
15 Unless, as provided under Article 7(1) of the revised RED, Member States “agree, via a specific cooperation
agreement, to count all or part of the renewable fuels of non-biological origin consumed in one Member State
towards the share of gross final consumption of energy from renewable sources in the Member State where
those fuels are produced. In order to monitor whether the same renewable fuels of non-biological origin are not
counted in both the Member State where they are produced and in the Member State where they are consumed
and in order to record the amount counted, Member States shall notify the Commission of any such cooperation
agreement. Such a cooperation agreement shall include the amount of renewable fuels of non-biological origin

consumed or a different one). As a result, in a situation where certain RFNBOs (e.g. renewable
ammonia) are produced in a Member State and then exported to another Member State, the
importing Member State would account  the RFNBO in  its industry target  in  the numerator
while the exporting Member State would not account the renewable hydrogen used to produce
it in the numerator.
For  tracing  renewable  hydrogen  certified  as  RFNBOs  that  is  injected  into  the  Union’s
interconnected gas infrastructure, it is possible to apply a mass balance system in accordance
with Article 30 of the RED provided the consumer would physically separate the hydrogen
from  the mixture of gases. An allocation of the sustainability  and greenhouse gas emission
saving characteristics of hydrogen to natural gas is not possible in the absence of such physical
separation of renewable hydrogen from the mixture of gases. Apart from that, the same rules
for mass balancing apply. The relevant volumes of RFNBOs have to be entered into the Union
Database in line with Article 31a of the RED.
RFNBOs  used  in  refineries,  including  as  an  intermediate  product,  for  the  production  of
conventional transport fuels16 and biofuels17, do not count towards the industry target under
Article  22a,  but  to  the  transport  under  Article  25  (see  below).  However,  RFNBOs  used  in
refineries  to  produce  industrial  products  consumed  in  the  industry  sector  can  be  counted
towards the industry target.
Hydrogen produced as a by-product and which complies with the definition of RFNBO18 can
be accounted in the numerator.
2.4. Calculation of the denominator
Paragraph 1, 5th subparagraph, point a) of Article 22a provides that “for the calculation of the
denominator, the energy content of hydrogen for final energy and non-energy purposes shall
be taken into account, excluding: (i) hydrogen used as intermediate products for the production
of conventional transport fuels and biofuels; (ii) hydrogen that is produced by decarbonising
industrial residual gas and that is used to replace the specific gas from which it is produced;
(iii)  hydrogen  produced  as  a  by-product  or  derived  from  by-products  in  industrial
installations”.
Although this paragraph mentions hydrogen used for final energy and non-energy purposes
without mentioning the sector in which it is consumed, it is clear from the fifth subparagraph
of paragraph 1 that the denominator refers only to hydrogen consumed in the industry sector
by setting the target of “42 % of the hydrogen used for final energy and non-energy purposes
in  industry  by  2030”.  Therefore,  the  denominator  includes  only  hydrogen  consumed  in  the
industry sector as defined in Article 2(18a) and not hydrogen consumed in all sectors.
Furthermore, the denominator does not distinguish between the energy source of the hydrogen
production, and includes hydrogen produced through all the different pathways. It also includes
the  hydrogen  that  is  purposely  consumed  as  part  of  a  mixture,  for  example  the  share  of

to be counted in total and for each Member State and the date on which the cooperation agreement is to become
operational”.
16 Conventional transport fuels include fossil fuels such as diesel, petrol and kerosine that are consumed in the
transport sector.
17 To be noted that according to the revised RED “biofuels” are liquid fuel for transport produced from biomass.
18 For instance, hydrogen that is a by-product of the chloro-alkali production process where renewable
electricity was used in the production process and which complies with the RFNBOs delegated acts.

hydrogen in syngas (a common mixture of hydrogen and carbon monoxide used in the chemical
industry)  or  the  share  of  hydrogen  in  a  mixture  with  nitrogen  (N2)  for  the  production  of
ammonia.
Paragraph 1, 5th subparagraph, point (a) of Article 22a provides that the following three cases
of hydrogen consumption in industry are excluded from the denominator:
i)
“hydrogen used as intermediate products for the production of conventional transport
fuels and biofuels”. This includes any hydrogen that is consumed for the desulfurization
or hydrogenation of transport fuels and biofuels. This exclusion will mostly apply to
hydrogen consumption in refineries. Refineries that produce both transport fuels as well
as industrial products should only exclude the hydrogen consumed for the production
of conventional transport fuels and biofuels.
ii)
“hydrogen that is produced by decarbonising industrial residual gas and that is used
to replace the specific gas from which it is produced”. This includes any hydrogen that
is  produced  from  residual  gases,  and  which  is  subsequently  re-introduced  into  the
industrial  process  to  replace  the  residual  gas  from  which  it  was  produced.  This
exclusion is a subcategory that is also covered by the broader exclusion for “hydrogen
produced as a by-product or derived from by-products in industrial installations” (see
below).
iii)
“hydrogen  produced  as  a  by-product  or  derived  from  by-products  in  industrial
installations”. This exception covers hydrogen that is produced as an unavoidable and
unintentional consequence of the production of the main product, or hydrogen that is
produced from residual gases that are the unavoidable and unintentional consequence
of the production of the main product. This category includes hydrogen produced in
chloro-alkali or sodium chlorate production processes, hydrogen that is produced as a
by-product of the cracking of fossil fuels to produce alkanes or alkenes, hydrogen that
is produced in the dehydrogenation process for the production of styrene or ethylene,
or hydrogen that is produced during the production of coke oven gas or blast furnace in
iron/steel making.
The Eurostat reporting instructions on hydrogen statistics include hydrogen production whether
intentional and exclusive or as a by-product.
In addition to the above exclusions, recital 62 of the revised RED recognises the role of early
movers that have taken investment decisions with a view to retrofitting pre-existing hydrogen
production  facilities  based  on  steam  methane  reforming  technology  with  the  aim  of
decarbonising hydrogen production. It should be noted that  the recognition in this recital is
limited only to projects for which a grant under the Innovation Fund was awarded before the
entry into force of the revised RED i.e. 20 November 2023. Consequently, it would not apply
to new projects for which the award decision was taken after this date.
Regarding  the  scope  of  the  denominator,  the  fifth  subparagraph  of  Article  22a  refers  to
“hydrogen” used for final energy and non-energy purposes in industry. This contrasts with the
wording used in Article 22b which lays down conditions for the reduction of the RFNBO target
in  the  industry  sector  (further  explained  in  section  4  of  this  guidance).  Article  22b  allows
Member States to reduce the RFNBO target in the industry sector if they consume a limited
share of “hydrogen, or its derivatives” produced from fossil fuels.

The use of reference to “hydrogen” only in Article 22a appears to show a deliberate willingness
from the co-legislators to account only the consumption of hydrogen in the denominator and
not the consumption of its derivatives thus indicating the intention to target specifically the
decarbonisation of hydrogen in the EU. Hydrogen used to produce derivatives (regardless of
whether they qualify as RFNBOs or not) would be accounted in the denominator in the Member
State where the derivative is produced. For instance, if hydrogen is used in a Member State
(Member  State  A)  to  produce  ammonia,  which  is  then  exported  to  another  Member  State
(Member  State  B),  the  hydrogen  used  to  produce  the  ammonia  will  be  accounted  in  the
denominator in Member State A while the resulting ammonia would not be accounted in the
denominator in Member State B.
While  the  above  rules  on  the  denominator  apply  to  all  Member  States  for  the  purposes  of
accounting hydrogen consumption in industry to verify the compliance with the target set in
Article  22a,  Member  States  have  the  discretion  to  set  a  stricter  target  which  includes  the
consumption of derivatives in the denominator and would therefore increase the denominator
and, as a consequence, the RFNBOs target. In this case, however, they should report to Eurostat
the data aligned with the rules on the accounting of the denominator explained in the previous
paragraphs.
3.  RELATIONSHIP  BETWEEN  THE  RFNBO  TARGET  AND  THE  OVERALL  EU  RENEWABLE
ENERGY TARGET OF ARTICLE 3
Article 2 (4) of the revised RED defines “gross final consumption of energy” as “the energy
commodities  delivered  for  energy  purposes  to  industry,  transport,  households,  services
including public services, agriculture, forestry and fisheries, the consumption of electricity and
heat by the energy branch for electricity and heat production, and losses of electricity and heat
in  distribution  and  transmission”.  The  general  renewable  energy  consumption  target  set  in
Article 3 of the revised RED refers to the share of renewable energy out of the Union’s gross
final consumption of energy. This means that only renewable energy commodities (including
RFNBOs) used for energy purposes can contribute to the target but not those used for non-
energy purposes.
RFNBOs used for non-energy purposes contribute towards the indicative target for the increase
of renewable energy in the industry sector set in paragraph 1 of Article 22a, which refer to the
“share of renewable sources in the amount of energy sources used for final energy and non-
energy  purposes  in  the  industry  sector”  and  thus  they  contribute  to  the  achievement  of  the
RFNBO target set in the same article. However, based on Article 3 of the revised RED, they
do not contribute to the overall EU 2030 renewable energy target of at least 42.5%.
Furthermore, renewable electricity used to produce RFNBOs will not be counted towards the
overall EU renewable energy target (as referred to in Article 7(2) of the RED). RFNBOs used
for energy purposes are counted towards the overall renewable energy target, and within the
sector where they are consumed. Renewable electricity produced from RFNBOs will also be
counted towards the overall renewable energy target.
4.  ARTICLE 22B
Paragraph 1 of Article 22b  (1) states that “A Member State may reduce the contribution of
renewable  fuels  of  non-biological  origin  used  for  final  energy  and  non-energy  purposes
referred to in Article 22a(1), fifth subparagraph, by 20 % in 2030, provided that:

(a)  that  Member  State  is  on  track  towards  its  national  contribution  to  the  binding
overall Union target set in Article 3(1), first subparagraph, which is at least equivalent
to  its  expected  national  contribution  in  accordance  with  the  formula  referred  to  in
Annex II to Regulation (EU) 2018/1999; and
(b)  the  share  of  hydrogen,  or  its  derivatives,  produced  from  fossil  fuels  which  is
consumed in that Member State is not more than 23 % in 2030 and not more than 20
% in 2035”.
Article  22a  of  the  revised  RED  requires  Member  States,  from  2030, to  achieve  a  share  of
RFNBOs  consumption  in  industry  equal  to  42%  of  the  total  hydrogen  consumption  in  the
industry sector. This percentage will increase to 60% by 2035. Article 22b introduces flexibility
for the fulfilment of such target by allowing Member States to reduce it by 20% at two points
in  time,  i.e.,  in  2030  and  2035,  provided  that  they  are  on  track  towards  their  national
contribution  to  the  binding  overall  Union  target  and  that  their  share  of  hydrogen  and  its
derivatives produced from fossil fuels is not higher than 23% in 2030 and not higher than 20
% in 2035. If these conditions are cumulatively met, the RFNBO target laid down in Article
22a can be reduced to 33.6% in 2030 and 48% in 2035.
The numerator to calculate the share of hydrogen and its derivatives produced from fossil fuels
and consumed in the industrial sector includes all hydrogen production processes that use fossil
sources,  including  those  where  CO2  is  captured  and  used  or  stored.  The  denominator  is
calculated on the basis of the consumption of all hydrogen and its derivatives in the industrial
sector in a Member States, i.e. including RFNBOs, fossil-based and low-carbon hydrogen and
its derivatives. Given that hydrogen is naturally present in many substances used in industry,
such as methane (CH4) or even water (H2O), a distinction has to be made between hydrogen
derivatives and all other substances that contain hydrogen. For the purposes of the denominator,
only those products that are produced using hydrogen as an input are to be considered relevant
hydrogen  derivatives.  Products  that  contain  hydrogen  in  their  natural  condition  or  products
produced from products that contain hydrogen in nature should be excluded.
On the basis of the above, methane – which contains hydrogen in its natural condition – would
not fall under the denominator while synthetic methane (e-methane) would. The scope, though,
is  limited  to  products  obtained  as  direct  derivatives  of  hydrogen,  i.e.  resulting  from  the
combination of hydrogen with other molecules. Products containing hydrogen but which are
not direct derivatives of hydrogen (e.g. fertilisers), or products produced using hydrogen as a
reducing agent (e.g. direct reduced iron) would not fall under the denominator.
Article 22b does not explicitly exclude hydrogen by-product from the calculation of the share
of  hydrogen  and  derivatives  referred  to  in  Article  22b(1)  point  (b).  However,  taking  into
account that Article 22b is not a standalone provision, but it rather builds on Article 22a by
providing  flexibility  to  achieve  the  RFNBO  target  in  the  industry  sector,  and  to  ensure
consistency with article 22a, where hydrogen by-product is excluded in order not to account it
in the calculation of hydrogen consumption, it could be interpreted that the same exclusions
apply to both the numerator and the denominator of Article 22b, point b for hydrogen produced
as a by-product.
If a Member State decides to apply the flexibility provided under Article 22b, it has to notify
the  Commission,  together  with  its  integrated  national  energy  and  climate  plans.  The
notification  shall  include  information  about  the  updated  share  of  renewable  fuels  of  non-

biological origin and all relevant data to demonstrate that both conditions set out in Articlebe
22b are fulfilled.
5.  RFNBO TARGET IN ARTICLE 25
Article  25  sets  out  a  dedicated  biding  sub-target  for  RFNBOs  of  1%  of  transport  energy
consumption that is calculated in line with the rules set out in Article 27. In addition, RFNBOs
count towards the combined sub-target set out for RFNBOs and advanced biofuels as well as
the overall transport target. RFNBOs are eligible for counting towards the targets only if they
achieve at least 70% emissions savings.
Two main ways for compliance are possible:
i)
RFNBOs count towards the targets if they are supplied to any of the transport modes,
including to international marine bunkers, in the territory of a Member State.
ii)
RFNBOs count towards the targets if they are  used as intermediate products for the
production of conventional transport fuels and biofuels provided that the greenhouse
gas  emissions  reduction  achieved  by  the  use  of  RFNBOs  is  not  counted  in  the
calculation  of  the  greenhouse  gas  emissions  savings  of  the  biofuels.  s.  The  use  as
intermediate products covers cases where renewable hydrogen is used in refineries e.g.,
to  remove  impurities  during  the  hydro  treating  as  well  as  hydrogen  used  for  the
production of HVO and methanol that is use for the production of biodiesel.
RFNBOs that are used as intermediate products for the production of conventional transport
fuels and biofuels are counted towards the target in the country where they are used and are not
considered in the output of the facility that is producing conventional transport fuels or biofuels.
If RFNBOs that are used as intermediate products for the production of biofuels are counted
towards the targets, they must be considered as fossil input in the calculation of the greenhouse
gas emissions savings of the biofuels.
While the Directive clearly specifies that RFNBOs that are used as intermediate products for
the production of conventional transport fuels count towards the targets, it does not specify
how the use of RFNBOs for the purpose of the transport target is promoted. One promising
approach is integrating economic operators using RFNBOs as intermediate products for the
production of conventional transport fuels and biofuels in the supply obligation referred to in
Article 25 in a similar way as operators that supply renewable electricity to electric vehicles
under the credit mechanism as foreseen under Article 25.4.

ANNEX

Article 22a
Mainstreaming renewable energy in industry
1. Member States shall endeavour to increase the share of renewable sources in the amount of
energy  sources  used  for  final  energy  and  non-energy  purposes  in  the  industry  sector  by  an
indicative increase of at  least  1,6 percentage points as an annual  average calculated for the
periods 2021 to 2025 and 2026 to 2030.
Member States may count waste heat and cold towards the average annual increases referred
to in the first subparagraph up to a limit of 0,4 percentage points, provided that the waste heat
and  cold  is  supplied  from  efficient  district  heating  and  cooling,  excluding  networks  which
supply heat to only one building or where all thermal  energy is consumed only on-site and
where  the  thermal  energy  is  not  sold.  If  they  decide  to  do  so,  the  average  annual  increase
referred to in the first subparagraph shall increase by half of the waste heat and cold percentage
points counted.
Member  States  shall  include  the  policies  and  measures  planned  and  taken  to  achieve  such
indicative increase in their integrated national energy and climate plans submitted pursuant to
Articles  3  and  14  of  Regulation  (EU)  2018/1999  and  their  integrated  national  energy  and
climate progress reports submitted pursuant to Article 17 of that Regulation.
When electrification is considered to be a cost-effective option, those policies and measures
shall promote the renewable-based electrification of industrial processes. Those policies and
measures  shall  endeavour  to  create  conducive  market  condition  for  the  availability  of
economically viable and technically feasible renewable energy alternatives to  replace fossil
fuels used for industrial heating with the aim of reducing the use of fossil fuels used for heating
in  which  the  temperature  is  below  200  °C.  When  adopting  those  policies  and  measures,
Member States shall take into account the energy efficiency first principle, effectiveness and
international competitiveness and the need to tackle regulatory, administrative and economic
barriers.
Member States shall ensure that the contribution of renewable fuels of non-biological origin
used for final energy and non-energy purposes shall be at least 42 % of the hydrogen used for
final  energy  and  non-energy  purposes  in  industry  by  2030,  and  60  %  by  2035.  For  the
calculation of that percentage, the following rules shall apply:
(a) for the calculation of the denominator, the energy content of hydrogen for final energy and
non-energy purposes shall be taken into account, excluding:
(i) hydrogen used as intermediate products for the production of conventional transport fuels
and biofuels;
(ii) hydrogen that is produced by decarbonising industrial residual gas and that is used to
replace the specific gas from which it is produced;
(iii)  hydrogen  produced  as  a  by-product  or  derived  from  by-products  in  industrial
installations;

(b)  for  the  calculation  of  the  numerator,  the  energy  content  of  the  renewable  fuels  of  non-
biological origin consumed in the industry sector for final energy and non-energy purposes
shall  be  taken  into  account,  excluding  renewable  fuels  of  non-biological  origin  used  as
intermediate products for the production of conventional transport fuels and biofuels;
(c) for the calculation of the numerator and the denominator, the values regarding the energy
content of fuels set out in Annex III shall be used.
For the purposes of point (c) of the fifth subparagraph of this paragraph„ in order to determine
the energy content of fuels not included in Annex III, the Member States shall use the relevant
European standards for the determination of the calorific values of fuels, or where no European
standard has been adopted for that purpose, the relevant ISO standards.
2. Member States shall promote voluntary labelling schemes for industrial products that are
claimed to be produced with renewable energy and renewable fuels of non-biological origin.
Such voluntary labelling schemes shall indicate the percentage of renewable energy used or
renewable  fuels  of  non-biological  origin  used  in  the  raw  material  acquisition  and  pre-
processing, manufacturing and distribution stage, calculated on the basis of the methodologies
laid down either in Commission Recommendation (EU) 2021/2279 (*) or in ISO 14067:2018.
3. Member States shall report the amount of renewable fuels of non-biological origin that they
expect to import and export in their integrated national energy and climate plans submitted
pursuant to Articles 3 and 14 of Regulation (EU) 2018/1999 and in their integrated national
energy and climate progress reports submitted pursuant to Article 17 of that Regulation. On
the basis of that reporting, the Commission shall develop a Union strategy for imported and
domestic  hydrogen  with  the  aim  of  promoting  the  European  hydrogen  market  as  well  as
domestic  hydrogen  production  within  the  Union,  supporting  the  implementation  of  this
Directive  and  the  achievement  of  the  targets  laid  down  herein,  while  having  due  regard  to
security of supply and the Union’s strategic autonomy in energy and level playing field on the
global hydrogen market. Member States shall indicate in their integrated national energy and
climate plans submitted pursuant to Articles 3 and 14 of Regulation (EU) 2018/1999 and in
their integrated national energy and climate progress reports submitted pursuant to Article 17
of that Regulation how they intend to contribute to that strategy.
Article 22b
Conditions for reduction of the  target for the  use of renewable fuels  of non-biological
origin in the industry sector
1. A Member State may reduce the contribution of renewable fuels of non-biological origin
used for final energy and non-energy purposes referred to in Article 22a(1), fifth subparagraph,
by 20 % in 2030, provided that:
(a) that Member State is on track towards its national contribution to the binding overall Union
target set in Article 3(1), first subparagraph, which is at least equivalent to its expected national
contribution  in  accordance  with  the  formula  referred  to  in  Annex  II  to  Regulation  (EU)
2018/1999; and
(b) the share of hydrogen, or its derivatives, produced from fossil fuels which is consumed in
that Member State is not more than 23 % in 2030 and not more than 20 % in 2035.

Where  any  of  those  conditions  are  not  fulfilled,  the  reduction  referred  to  in  the  first
subparagraph shall cease to apply.
2. Where a Member State applies the reduction referred to in paragraph 1, it shall notify the
Commission thereof, together with its integrated national energy and climate plans submitted
pursuant  to  Articles  3  and  14  of  Regulation  (EU)  2018/1999  and  as  part  of  its  integrated
national  energy  and  climate  progress  reports  submitted  pursuant  to  Article  17  of  that
Regulation. The notification shall include information about the updated share of renewable
fuels of non-biological origin and all relevant data to demonstrate that conditions set out in
paragraph 1, points (a) and (b), of this Article are fulfilled.
The Commission shall monitor the situation in Member States benefitting from a reduction
with a view to verifying the ongoing fulfilment of conditions set out in paragraph 1, points (a)
and (b).
_____________
(*) Commission Recommendation (EU) 2021/2279 of 15 December 2021 on the use of the
Environmental Footprint methods to measure and communicate the life cycle environmental
performance of products and organisations.

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