Verbio SE: RED III decision: strong market incentives for cost-efficient achievement of climate targets and secure energy supply

RED III decision: strong market incentives for cost-efficient achievement of climate targets and secure energy supply 

• The German Bundestag has adopted the implementation of the revised
  Renewable Energy Directive (RED III)
• Implementing RED III creates a clearer, robust regulatory framework
  for a fair biofuels market
• Bioenergy combines climate protection with reliable energy supply 

Leipzig, April 24, 2026 – The German Bundestag has adopted the implementation of the revised Renewable Energy Directive (RED III). With this decision, the Federal Government paves the way for fair market conditions and strengthens the potential of bioenergy to ensure energy security and climate protection in the transport sector. At the same time, it corrects the systemic misaligned incentives that in recent years have caused significant market distortions in the biofuels market and a loss of confidence in the GHG quota system.

Ambitious increase of the GHG quota through 2040

The decision raises the greenhouse gas reduction quota (GHG quota) from the current 12 percent to 17.5 percent in 2027. This increase will be continued until it reaches 65 percent by 2040. In addition, the double counting of advanced biofuels will be abolished. The cap on the use of cultivated biomass for biofuel production will be extended to 5.8 percent until 2032. At the same time, mandatory on-site inspections to prevent fraud will be introduced from 2027 onward.

“The German Government has even increased the ambitious long-term development of the GHG quota proposed in the draft legislation by an additional 1.5 percentage points over the entire period. That came as a positive surprise to us,” comments Verbio CEO Claus Sauter on the decision.

Combined with the elimination of double counting for advanced biofuels and the extension of the cap on biomass-based biofuels, this means a strong signal to the biofuels industry and the market opportunities for both conventional and advanced biofuels.

The ambitious design of the GHG quota not only lays the foundation for a sustainable reduction of CO₂ emissions in transport. It also creates additional demand for green molecules from sustainably produced regional biomass, thereby reducing dependence on fossil sources from fragile international supply chains.

Solid foundation for a sustainable and crisis-resilient energy supply

With these measures, the German government has responded to previous market distortions. In recent years, the market for renewable fuels has been characterized by uncertainty and structural misaligned incentives. Fraud in the accounting of greenhouse gas reductions has significantly worsened the framework conditions for biofuels since 2023. RED III now effectively addresses these distortions: the elimination of double counting and mandatory on-site inspections place the focus back on actual emission reductions and ensure fairer market conditions.

With the return to stable market conditions, structural demand for renewable energy sources can fully develop, and the bioenergy sector can once again fulfill its central role in ensuring price stability and resilience in domestic energy supply through forward-looking investments.

“In times of energy crisis, the biofuels industry acts as an emergency power generator. We reliably provide affordable and climate-friendly energy for transport and industry. With the new RED III, we will become an integral part of a forward-looking energy concept. In the future, we will not only receive a climate protection premium for our products, but also a resilience premium,” explains Verbio CEO Claus Sauter regarding the significance of the decision for industry and consumers.

He adds: “Biofuels are not only climate protection in practice. They are also an important support for agriculture and for a secure energy supply. Our raw materials do not have to pass through the Strait of Hormuz. They grow directly in the fields next door in Saxony-Anhalt, Saxony, or Brandenburg.”

Regulatory impulses unlock additional potential

Beyond RED III, further regulatory initiatives at both national and European level open up additional potential for consistently strengthening regionally produced biofuels and green molecules for a wide range of applications.

In Germany, the blending of bioethanol into gasoline is currently limited to a maximum of 10 percent. The biofuels industry has long been advocating an increase to 20 percent in order to unlock additional CO₂ savings potential and stabilize fuel prices independently of geopolitical price fluctuations in fossil energy sources.

EU Agriculture Commissioner Christophe Hansen also advocates higher blending quotas for renewable components in fuels, particularly in light of high fuel costs and the still untapped potential of regionally produced biomass. Farmers worldwide are suffering from low prices for their products. He therefore points out that higher blending quotas could also improve the economic viability of agricultural producers and thus have a stabilizing effect on food prices.

At the same time, the German government is working to ensure that advanced biofuels are taken into account in the calculation of European fleet emission targets. This would mean that, in addition to direct emissions from vehicle operation, the greenhouse gas balance of fuels across their entire value chain would also be included.

Biomethane remains a multi-talented focus area

These advanced biofuels include, for example, biomethane produced from residues. In the transport sector, it powers truck fleets cost-effectively and in a climate-friendly way as BioCNG and BioLNG. At the same time, it can also realize its potential as a substitute for fossil natural gas in the heating sector or in industrial processes.

In this context, the ongoing regulatory processes concerning the design of the German Energy Industry Act (EnWG) and the introduction of a green gas quota in the German gas market are of central importance.

Images for download (34.7 MB © Verbio SE) (external link)

About Verbio

At Verbio we make more from biomass. In our biorefineries we convert raw materials and residual products from regional agriculture into climate-friendly fuels, green energy, and renewable products for the chemical industry and agriculture. In addition, we create high-value components from sustainably-generated biomass for the animal feed and foodstuff industries. We employ more than 1,400 people at our locations in Europa, Asia, and North America. Our motto “Pioneering green solutions” sums up what drives our international team: with innovative technologies and green solutions, we are shaping the social and industrial transformation toward climate neutrality and ecological production. We contribute to preserving natural resources and to safeguarding the planet’s environment for future generations. We combine global growth with commercial success. For us, climate protection is an expression of social responsibility. At the same time, we contribute to security of supply by converting locally available biomass into renewable energy sources and sustainable chemicals. Verbio shares (ISIN DE000A0JL9W6/WKN A0JL9W) have been listed in the prime standard segment of the Frankfurt Stock Exchange since October 2006. Our headquarters are in Zörbig, Germany.

www.verbio.de | www.verbiogas.de | www.strohklug.de | www.verbiolifechemicals.com

Facebook & Instagram: @verbio.se | LinkedIn: @verbio-se | LinkedIn: @claussauter

Contact:

Ulrike Kurze                                                                                 
Verbio SE, Global Marketing & Communications                  
Ritterstraße 23 (Oelßner’s Hof), 04109 Leipzig                           
Tel.: +49 176 13085404                                                               
E-Mail: ulrike.kurze@verbio.de                                                   

Constanze Reinsberg
WeichertMehner GmbH & Co. KG
An der Dreikönigskirche 5, 01097 Dresden
Tel.: +49 351 50140-205
E-Mail: verbio@weichertmehner.com