Lifecycle GHG Emissions – Malta Resources Authority

Lifecycle Greenhouse Gas Emissions from Fuels Regulations

DISCLAIMER: The information hereunder is intended to facilitate the implementation of Subsidiary Legislation 423.48. It is itself not legally binding. Any authoritative reading of the law should only be derived from Subsidiary Legislation 423.48, Council Directive (EU) 2015/652, Directive 2009/30/EC, Regulation (EU) 2018/1999 and other applicable legal texts or principles. This note is solely intended to help suppliers by explaining the applicable law.

European legislation addressing fuels used for road transport in the EU requires that such fuels meet strict quality requirements to protect human health and the environment and make sure that vehicles can safely travel from one country to another in the EU on the basis of compatible fuels.

Subsidiary Legislation 423.48, Lifecycle Greenhouse Gas Emissions from Fuels Regulations (as amended by Legal Notice 410 of 2017) transposes Article 7a of the Fuel Quality Directive “by setting, in respect of road vehicles, non-road mobile machinery (including inland waterway vessels when not at sea), agricultural and forestry tractors, and recreational craft when not at sea, a target for the reduction of life cycle greenhouse gas emissions, and transpose Council Directive (EU) 2015/652 by laying down rules on calculation methods and reporting requirements.” (Sub-regulation 2 of regulation 1 of the Lifecycle Greenhouse Gas Emissions from Fuels Regulations)

The Lifecycle Greenhouse Gas Emissions from Fuels Regulations require a reduction of the greenhouse gas intensity of transport fuels by a minimum of 6% by 2020. This target should be respected even after the year 2020. Furthermore, indicative additional reductions, up to 10%, may also be required by the MRA. However, to date, indicative additional reductions are not required.

Emissions reporting covers full life cycle

The greenhouse gas intensity of fuels is calculated on a life cycle basis, covering emissions from extraction, processing and distribution. Emissions reductions are calculated against a 2010 baseline of 94.1 gCO2eq /MJ.

The likely compliance options to fulfil the reduction obligation are currently:

the use of biofuels which fulfil the sustainability criteria specified in the Biofuels, Bioliquids and Biomass Fuels (Sustainability Criteria) Regulations;
the use of electricity;
the use of less carbon intense fossil fuels;
the use of renewable fuels of non-biological origin (such as e-fuels); and
a reduction of upstream emissions (such as flaring and venting) at the extraction stage of fossil feedstocks (upstream emission reductions or UERs).

It should be pointed out that:

suppliers of biofuels for use in aviation may choose to become contributors to the reduction obligation;
providers of electricity for use in road vehicles may choose to become contributors to the reduction obligation if they can demonstrate that they can adequately measure and monitor electricity supplied for use in those vehicles; and
a group of suppliers may choose to meet the reduction obligation jointly.

The calculation method to be applied and the details for the reporting of the greenhouse gas intensity of regulated fuels is defined by Council Directive (EU) 2015/652 as transposed by the Lifecycle Greenhouse Gas Emissions from Fuels Regulations and as modified by Regulation (EU) 2018/1999.

Suppliers shall report annually to the Malta Resources Authority on the greenhouse gas intensity of fuel and energy placed on the market by filling the template: Art 7aFQD template Supplier v3.7 MRA . (This template is an adaptation of the original template developed by the European Environment Agency and reflects the discussions of the informal expert meetings on the transposition of Council Directive (EU) 2015/652 implementing Article 7a of the Fuel Quality Directive involving the Commission services and experts from the Member States.) This report shall be submitted by the end of March of each year in respect of the previous calendar year. It should be pointed out that this reporting obligation remains applicable after the year 2020.

Information for Suppliers

Fuels intended for the use of road vehicles, non-road mobile machinery (including inland waterway vessels when not at sea) and agricultural and forestry tractors (and recreational craft when not at sea) (sub-regulation 2 of regulation 1 of S.L.423.48) that are placed on the market should be reported under the Lifecycle Greenhouse Gas Emissions from Fuels Regulations and are included in the 6% reduction obligation. Such fuel types include petrol, diesel and biofuels used in road transport and the different gasoils intended for use by non-road mobile machinery and agricultural and forestry tractors. In cases where these fuels are intended for any different use (e.g. marine, heating or industrial), they should not be reported under S.L.423.48, provided that they are marked differently from the fuel intended for road transport. (Please note that fuel intended for road transport is clear with national marker.) In the absence of such distinctive fuel marking, the MRA is inviting you to submit to the Authority a list of your clients and the products and the quantities sold to each, provided that you wish to reveal this information to the MRA. The Authority would then try to determine what should be reported under S.L. 423.48 with your assistance.

Any information submitted shall be subject to verification and to sharing with other government entities to ensure coherence of related data in the fulfilment of the various reporting obligations and to carry out regulatory functions.

Each delivery or batch of fuel should be reported separately. Given the scope of S.L. 423.48, the term “LPG” refers to “Autogas”. Explanatory notes are available in the reporting template itself; in tab “Notes”, as well as in the tabs used for reporting, especially in the blue cells. Moreover, it should be pointed out that note 7 of the reporting template provides the currently applicable CN codes for gasoil and diesel, as well as instructions on how these should be reported.

It is important to note that with the adoption of Regulation (EU) 2018/1999 (particularly Articles 47 and 56), reporting of certain information that was previously obligatory has become voluntary. This information is listed below:

“Place of purchase – Country”,
“Place of purchase – Facility name”,
“Country of origin”,
“Feedstock Trade Name”, and
“API gravity” (in tab “1 Fossil and other non biofuels”); and
“Country of origin of feedstock”, and
“Place of purchase Country” (in tab “2 Biofuels” ).

Should suppliers wish to report on the information listed above, columns may be added in the respective tabs of the same template, as applicable.

Information for Groups of Suppliers Choosing to Meet the Reduction Obligations Jointly

According to sub-regulation 5 of regulation 3 of S.L. 423.48, a group of suppliers choosing to meet the reduction obligations pursuant to sub-regulation (3) of regulation 3 of S.L. 423.48 (henceforth, “reduction obligations”) jointly shall be considered as a single supplier for the purposes of the same sub-regulation. Thus, a group of suppliers choosing to meet the reduction obligations jointly shall report together to the Malta Resources Authority on the greenhouse gas intensity of fuel and energy placed on the market by filling and submitting jointly one reporting template, making sure of the following.

In the “Summary” tab, reference should be made to all the suppliers.
In the other tabs where data is entered, reference should be made to the supplier placing the respective entry on the market, under the header “Reference code” or “User reference code”.

Moreover, the suppliers choosing to meet the reduction obligations jointly shall update accordingly and submit jointly the Sample Declaration for a Group of Suppliers Choosing to Meet the Reduction Obligations Jointly before the 31^st December of the calendar year prior to the one for which the reduction obligations would be met jointly. (For calendar year 2022, only, the suppliers choosing to meet the reduction obligations jointly shall update accordingly and submit jointly the above-mentioned declaration throughout the year 2022, itself.)

Once the above-mentioned declaration is submitted to the Malta Resources Authority, it would be the responsibility of all the suppliers in the group to meet the reduction obligations.

If, for any reason whatsoever, the reduction obligations are not fulfilled, all fuel suppliers shall be liable jointly and severally for the fulfilment of the total joint reduction obligations and for any action that might be taken by the Malta Resources Authority.

The above is in addition to the observance of all the guidelines and directions that the Malta Resources Authority has established and will establish in the future.

Sustainability Criteria for Biofuels

Biofuels can be used to fulfil the greenhouse gas emission reduction obligation, only if they meet certain sustainability criteria to minimise negative impacts from their production.

Among others, the following requirements have been set:

greenhouse gas emission from biofuels must be lower than the emissions from the fossil fuel they replace …
- … by, at least, 50% if produced in installations in operation on or before 5 October 2015;
- … by, at least, 60% if produced in installations starting operation from 6 October 2015 until 31 December 2020; and
- … by, at least, 65% if produced in installations starting operation from 1 January 2021.
the feedstocks for biofuels cannot be sourced from land with high biodiversity or high carbon stock.

Taking account of indirect land use change

As the demand for biofuels rises, their production can displace the production of food and feed crops and induce the conversion of land, such as forests and wetlands, into agricultural land, indirectly leading to increased greenhouse gas emissions. These emissions from indirect land use change (ILUC) can significantly reduce or even cancel the greenhouse gas savings from biofuels.

To account for this, the Authority may provide that the maximum contribution of biofuels produced from cereal and other starch-rich crops, sugars and oil crops and from energy crops grown on agricultural land that can be counted for the purpose of the fulfilment of the reduction obligation be limited to 7% of the energy in transport in 2020.

Classification of Biofuel Feedstock

As from the end of the year 2020, the biofuel feedstock palm fatty acid distillate (PFAD) is being considered to be a “product” and not a “waste/residue”.