The Renewable Energy Directive (RED) sets sustainability standards and quantity limits for biofuels and bioliquids in order to avoid negative environmental impacts. In the European Emissions Trading System (EU ETS), however, fuels can continue to be counted with an emission factor of zero – even if they are subject to the volume limits of the RED. This regulation undermines environmental policy goals and creates false incentives. The article therefore calls for the “RED cap” to be integrated into the EU ETS monitoring regulation in order to coherently combine climate protection and nature conservation.
