THE ROLE OF INTERNATIONAL OFFSETS IN THE FUEL QUALITY DIRECTIVE

The briefing examines the use of Upstream Emission Reductions (UERs) to meet the Fuel Quality Directive's (FQD) target of reducing transport fuel greenhouse gas intensity by 6% by 2020. It warns that the current implementing measure lacks additionality requirements and oversight, creating a high risk of double counting across EU Member States, between the EU and third countries, and between the FQD and the EU ETS. The author highlights that projects from the Alberta Offset System, including road construction for tar sands mining, could potentially qualify. To ensure environmental integrity and reduce administrative burdens, the document recommends that Member States restrict UERs to CDM projects in Least Developed Countries, noting that a single project in Angola could potentially meet the entire estimated 0.8% gap in the FQD target.

• The Fuel Quality Directive (FQD) aims to reduce the greenhouse gas intensity of road transport fuels by 6% by 2020 compared to 2010, which equates to a total reduction of 54.8 million tonnes of CO2-eq per year.
• Upstream Emission Reductions (UERs), defined as emissions occurring before raw materials enter a refinery or processing plant, can contribute significantly to the FQD target, potentially providing 15% to 50% of the overall 6% goal depending on first-generation biofuel use.
• The FQD's implementing measure explicitly excludes the requirement for additionality, meaning projects do not have to prove that emission reductions would not have occurred without the directive's incentives.
• There is a substantial risk of double counting offset credits in three ways: across different EU Member States due to lack of central oversight, between the EU and third-country compliance systems (such as Alberta's), and between the FQD and the EU Emissions Trading System (EU ETS).
• The Alberta Offset System could allow credits from tar sands operations to count toward the FQD; specifically, two road paving projects registered after January 1, 2011, claimed approximately 600,000 tonnes of CO2 savings for roads connecting Shell oil sands mining to highways and harbors.
• The author recommends limiting UERs to Clean Development Mechanism (CDM) projects in Least Developed Countries (LDCs) to align with EU ETS restrictions and reduce administrative burdens by using the existing EU-centralized registry.
• A single CDM project in Angola for the capture and utilization of gas from oil wells could potentially generate 137 million tonnes of CO2-eq over ten years, which would be sufficient to meet the estimated 0.8% gap (7.8 Mt CO2) in the FQD target.

APA

Carbon Market Watch (2014). THE ROLE OF INTERNATIONAL OFFSETS IN THE FUEL QUALITY DIRECTIVE. https://carbonmarketwatch.org/wp-content/uploads/2014/12/Role-of-International-Offsets-in-FDQ_final.pdf

Chicago

Carbon Market Watch. THE ROLE OF INTERNATIONAL OFFSETS IN THE FUEL QUALITY DIRECTIVE. 2014. https://carbonmarketwatch.org/wp-content/uploads/2014/12/Role-of-International-Offsets-in-FDQ_final.pdf.

Wikipedia

{{cite report |author=Carbon Market Watch |title=THE ROLE OF INTERNATIONAL OFFSETS IN THE FUEL QUALITY DIRECTIVE |date=December 2014 |url=https://carbonmarketwatch.org/wp-content/uploads/2014/12/Role-of-International-Offsets-in-FDQ_final.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{carbonmarketwatch2014role, author = {{Carbon Market Watch}}, title = {{THE ROLE OF INTERNATIONAL OFFSETS IN THE FUEL QUALITY DIRECTIVE}}, institution = {Carbon Market Watch}, year = {2014}, month = dec, url = {https://carbonmarketwatch.org/wp-content/uploads/2014/12/Role-of-International-Offsets-in-FDQ_final.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }