We provide the latest update about the RED3 transposition process reported by our local sources. In parallel, BAFA data covering 11M24 confirmed the dramatic cut in physical blending in Q4-24.
This article was published on March, 12 2025 on our platform
Sources confirmed that the level of uncertainty regarding RED3 was high. The agreement reached this week between the two leading political parties (CDU/CSU and SPD) was only a broad one, which will take weeks before leading to the formation of a new government. It is not expected that the talks will be finalized before the end of April, opening the way for a new legislative period in early May.
It was confirmed that a draft amending the Federal Immission Control Act, reflecting on RED3 changes for transport, has been agreed between the ministries still in place but not publicly disclosed. This version is, however, likely to be modified depending on the Ministry allocation to be agreed on in the coming couple of months.
Sources familiar with the federal procedures commented that the new draft may not be forwarded to the Parliement before the end of May or early June. This will leave no time to finalize the transposition before the summer break, so the finalization of the transposition may not occur before the end of Q3, at the earliest.
In parallel, the BAFA released figures for October and November 2024 that confirmed the steep cut in biodiesel blending after the carry-over proposal was made in September (and confirmed in November).
In October, only 111 kt of biodiesel (Fame + HVO) was blended, down 46% YoY and 42% MoM. In November, the figure was even lower at 107 kt, down 49% YoY. During those two months, ethanol blending was only marginally impacted.
During 11M24, biodiesel blending was cut by 16% YoY at 1.98 M t, erasing 385 kt of demand. Ethanol recorded a small positive growth during the same period.
