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
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.
- Singapore, Brazil move to build green fuel shipping corridor
- Auramarine builds business on marine fuel flexibility
- Stargate Hydrogen Strengthens Nordic Expansion with Petri Sarnes, Former Siemens Power Sector Director of FinBaltic region
- Econetix Adds New Biochar And Bamboo Project To Its Portfolio
- Open call for the second Circular Economy Awards for the Western Balkan region
- TFG Marine installs ISO-certified mass flow meters on two US Gulf bunker barges
- DNV flags ‘strong summer’ for alternative-fuelled vessel orders
- Everllence launches engine-supported air lubrication tech
- Continental Develops Tyre with More Than 40% Recycled Materials for EU Project
- Evaluating the Health Impact Assessment on the UK’s Tyre Recycling Sector
- Oiltraining’s Visser joins IBIA as new Training & Technical Advisor
- Global hydrogen fuel cell market to reach $13.1 billion by 2031, research finds
- OMV Petrom expands Its green hydrogen production capacity at the Petrobrazi refinery to 55 MW
- Innovation funding awarded for next phase of Northern Gas Networks hydrogen storage project
- Haffner targets deal for 12 biomass-to-hydrogen units in western US
- Alfa Laval selected as technology provider for electrolyzer cooling in one of Europe’s largest renewable hydrogen projects
- ABO Energy and the City of Oulu sign agreement to advance hydrogen plant zoning
- SK Innovation E&S and Deokyang Energen to build five combined hydrogen refueling stations in South Korea
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
Specification, volume, location and certification are enough to start.
Or e-mail us directly: bart@sustainablecommodities.eu
Last reviewed 03 September 2026. Regulatory references are given for orientation and are not legal advice: verify against the current Official Journal text before contracting.