RED III, the EU Renewable Energy Directive, keeps waste oils and animal fats in a capped box. Feedstocks in Annex IX Part B -- used cooking oil, categories 1 and 2 animal fats -- count toward a member state's renewable transport target, but only up to 1.7% of transport energy per country, with the option for a member state to ask the Commission to raise its cap. At the same time the directive raises the overall transport target to 29% renewable energy by 2030 (or a 14.5% greenhouse-gas-intensity reduction) and sets a combined sub-target of 5.5% for advanced biofuels and RFNBOs, including a binding 1% RFNBO share. The practical effect for a seller: demand for Part B material stays strong but is structurally capped, while the growth premium sits with Part A feedstocks -- and with the national implementation choices that each member state is making right now.
- 1Feedstock listed in Annex IX, part A or B
- 2Certified with a proof of sustainability
- 3Blended into fuel in a member state
- 4Counted toward the target, double where allowed
- 5Part B stops earning above the 1.7% cap
The physical cargo is only half the deal; the other half is where it counts. A feedstock in the wrong box for the wrong country earns its heating value and nothing more.
The architecture, in one view
The directive works like nested buckets. Material counts toward the overall transport target unless it is capped or excluded; some feedstocks count double; and separate sub-targets must be met with specific material. Where your feedstock sits in that structure decides who wants it and how hard.
| Annex IX Part A (advanced) | Counts toward the 5.5% combined advanced/RFNBO sub-target. Includes feedstocks such as algae, biomass fractions, and specific waste streams. |
|---|---|
| Annex IX Part B (UCO, cat 1/2 fats) | Counts toward the overall target but capped at 1.7% of transport energy per member state; a member state can request a higher cap from the Commission. |
| Used cooking oil | Part B. Double counting applies where the member state has kept that option. The cap is the structural limit on how much UCO-biodiesel can earn. |
| Category 1 and 2 animal fats | Part B, same cap. Category 3 fat is not in Part B and is treated differently. |
| Food and feed crop biofuels | Frozen at 2020 levels plus a margin, capped at 7% or the 2020 share, whichever is lower per member state. |
| RFNBOs (renewable fuels of non-biological origin) | 1% binding by 2030 within the 5.5% combined sub-target. |
Why the cap matters even when it is not binding
The 1.7% cap is not new in RED III -- it carried over from the previous directive -- but it now sits under a higher overall target, which changes what it does. With transport pushed toward 29% renewable by 2030, everything outside the caps has to grow faster, and the capped box becomes the marginal one.
For sellers of UCO and category 1 and 2 fats this cuts two ways. Demand stays: the material still counts, still earns double in several countries, and biodiesel and HVO plants are built to run on it. But headroom above the cap earns a member state nothing, so buyers in a capped country cannot pay mandate-driven premiums for marginal Part B volume. The industry association for waste-based biofuels, EWABA, has publicly asked the Commission to revisit the cap level -- which tells you where the pressure sits.
National implementation is where the real differences show up. Member states transpose the directive into their own quota systems, and several add sub-caps or country-specific rules for UCO and fats. The annual USDA GAIN overviews of EU member state biofuel mandates track those differences, and they change often enough that a current read is part of any serious feedstock conversation.
What we tell sellers in practice
If you collect or aggregate UCO, render fats, or trade acid oils, the quota system decides which buyers are hungry this quarter and which are long.
Know which box your material is in. The Part A / Part B question is worth real money, and stream classifications are exactly where paperwork and reality drift apart. See our Annex IX feedstock page for the lists.
Watch double counting country by country. The same cargo earns materially different value depending on where it is blended, because member states use the double-counting option differently.
Sell the certificate with the cargo. Proof of sustainability is what converts a physical cargo into quota value; without it the buyer is buying feedstock, not compliance.
Expect Part A premiums. The growth in the sub-targets has to come from Part A and RFNBOs, which is why advanced feedstock commands the premium it does.
Frequently asked questions
What is the transport target?
The renewable energy share transport must reach, the directive's headline number, implemented nationally with local instruments. The target is the ceiling's ceiling.
Can caps be traded between countries?
Member states implement within the framework, the caps defining what counts where, trading happening between operators not governments. The map is fixed, the cargo chooses its country.
What is a multiplier in RED terms?
The counted-value factor certain feedstocks' energy carries, waste-based double counting being the famous one, the arithmetic of encouragement. Multipliers are policy in mathematics.
Does RED III affect heating fuels?
The directive reaches beyond transport into heating and cooling, the feedstock family's markets multiplying again. One regulation, many chimneys.
What comes after RED III?
Implementation now, revision later, the policy cycle already drafting the next chapter, the market reading drafts as weather forecasts. RED IV is a rumour with a committee.
What is an advanced fuel target?
A minimum share of energy from Part A feedstocks and renewable fuels of non-biological origin, the quota that keeps demand pointed at the streams nobody eats. Advanced is the EU's word for no-food, and it carries a price.
What are RFNBOs in three sentences?
Renewable fuels of non-biological origin, e-fuels built from renewable power, hydrogen and captured carbon, with their own sub-mandates in transport and aviation. The eSAF obligation is their flagship, and it is synthetic chemistry with a subsidy-shaped hole where cost should be.
How do caps change a cargo's value?
Capped material counts toward targets only up to a limit, so beyond it buyers pay energy value without compliance value, a cliff that pricing strategies must see coming. The certificate is worth what the cap allows, not what the molecule deserves.
Does RED III affect marine fuels?
Yes, the directive extends into maritime transport energy while FuelEU Maritime runs its own intensity regime, two instruments pulling the same ships in complementary directions. Shipping now files two kinds of homework.
What is RED III in plain language?
The European Union's third renewable energy directive: it sets the renewable energy targets for 2030 and rewrites the rules for transport fuels, including what counts, how much waste-based material may be double counted, and the sub mandates for advanced fuels and aviation. Almost every price on this site traces back to a line in it.
What are the Part B caps?
Limits on how much biofuel from Annex IX Part B feedstocks, the used cooking oils and fats of this world, may count toward the transport target. The caps do not ban these feedstocks, they ceiling their counting value, which reshaped who competes for every litre.
When do RED III rules apply in my country?
European directives reach you through national law: each member state transposes RED III into its own implementing rules, and the dates shift with that process. We track the national state of play because a cargo's value depends on the destination's implementation, not on Brussels alone.
Does RED III ban used cooking oil as a feedstock?
No. UCO remains eligible and counts toward renewable transport targets; it is capped, not banned. The 1.7% cap limits how much of a member state's target Part B feedstocks can cover, which affects the premium buyers can pay for marginal volume, not the legality of the trade.
What is double counting?
A mechanism from the directive that lets certain waste-based fuels count twice toward the targets. Member states apply it differently, so the same certified cargo can be worth more blended in one country than in its neighbour.
Has RED III been implemented everywhere?
The transposition deadline was 21 May 2025, and the Commission noted member states were required to have the transport provisions in national law by then; in practice implementation is uneven and the national systems are still moving. For a seller, that means the map of which buyer values what changes quarter by quarter.
Which feedstocks are in Annex IX Part B?
The short list for our markets: used cooking oil, category 1 and 2 animal fats, and a few others including tall oil pitches and corn husks. The full lists and the practical differences are on our Annex IX feedstock page.
Market news
Recent headlines from across the feedstock and renewable fuel sector. Nothing specific to this market has come through the wires lately, so this is the wider view. The links go to the publisher; we do not host or edit their reporting, and a headline here is not our endorsement of it. Scroll for more.
- Introducing Green Value Chain Connect: From WCEF learnings to value chain action
- Ashland unveils vegetable oil-based crop protection dispersant
- Polybion’s cultivated cellulose debuts on the runway
- Maersk successfully bunkers vessel with US corn-based ethanol
- California Bioenergy acquires Sevana Bioenergy’s interest in South Dakota Biogas LLC
- Nord Gas Solutions wins tech contract for Polish biogas liquefaction plant
- Island Oil rebrands as Island Energies
- ContiTech to Use BolderBlack for Conveyor Belt Production in the Americas
- Plastics Recycling: TotalEnergies Becomes the Sole Owner of the Grandpuits Advanced Plastics Recycling Plant
- Stargate Hydrogen secures 21 million Euros from the EU Innovation Fund to further scale up its operations
- I’m green™ bio-based Helps Deterra® Win Multiple Industry Awards for Pharmaceutical Packaging
- „I’m green™ bio-based” verhilft Deterra® zu mehreren Branchenauszeichnungen für pharmazeutische Verpackungen
- World’s Largest Green Methanol Project Achieves ISCC EU Certification
- Bundesumweltministerium startet Innovationsplattform “Circular AI Hub”, Künstliche Intelligenz soll Unternehmen der Kreislaufwirtschaft helfen
- Brazil sorghum output surges as China exports and ethanol demand grow
- Hong Kong opens first hydrogen fuel testing lab
- NAW appeals Oregon EPR ruling
- Industry stakeholders urge EU to retain RED III binding RFNBO targets post-2030
18 headlines, updated automatically. Last refreshed .
Sources and further reading
Primary sources for the rules and figures on this page, so you can check them yourself. Legislation is amended: always read the consolidated text on the date that matters to you.
Who to ask about RED III quotas
Just ask. Selling UCO or fats into Europe and wondering what the caps do to your buyer list? Ask us: this is the demand side we read every day. You get Bart van den Brug on the other end, same working day, in English or Dutch, and across the team also in French, Portuguese, Polish, Czech and Russian.
On how we work: on the feedstocks and fuels on this site we are a broker. We never take title, we do not trade our own book, and we are paid a commission on business that concludes. Additives are the one exception: those we also buy and sell for our own account, and we say in which capacity we are acting before you commit to anything. Either way you will hear it from us when the answer is no, or when your parcel is not ready for the conversation you want to have. A market read or a second opinion on a specification costs nothing and commits you to nothing.
Happy to look at whatever you have, even if it is half an analysis and a question.
+31 6 115 83 448
bart@sustainablecommodities.eu
Sustainable Commodities 3 B.V., Lemmer, the Netherlands
Ask about RED III quotas
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Or e-mail us directly: bart@sustainablecommodities.eu
Last reviewed 29 September 2026. Regulatory references are given for orientation and are not legal advice: verify against the current Official Journal text before contracting.