For: Netherlands Ministry of Infrastructure and Water Management
[March – August 2025]
The Ministry of Infrastructure and Water Management (DG Mobility) has asked studio Gear Up to conduct an exploratory study into the impact of the introduction of the European Emissions Trading System (ETS2) on the so-called A-B-C deliveries of transport fuels. This scheme allows for flexibility in deliveries of renewable fuels to the market. The report contains an explanation of this construction.
This study shows that the introduction of the new ETS2 emissions trading system can have important consequences for these constructions. Because these A-B-C supply constructions play a major role in the Dutch fuel market, this is expected to make the use of A-B-C supplies less attractive for fuel suppliers, with market shift and concentration likely to result.
According to the Dutch Emissions Authority (NEa), about half of biofuel deliveries go through A-B-C constructions, while the trade association of independent fuel suppliers, NOVE, estimates that this share is even considerably higher.
Read more details in the report. (Report is written in Dutch language).
Findings of the study
In short, the A-B-C delivery construction means that different fuel suppliers, successively called the A-, B- and C-party, trade and logistically process the transport fuel before it is finally delivered to the end user. This set-up makes it possible for smaller suppliers, who do not have a depot or blending capacity of their own, to be more flexible in trading fuels and serving their customers.
The later parties (the B and C parties) in the trade chain cannot provide sustainability information about the renewable fuels supplied as evidence for their ETS2-obligation and then their entire volume is considered fossil, for which the corresponding CO2-rights must be purchased, even if it actually concerns a quantity of renewable fuels supplied. Only the A-party – with a depot (excise goods party) physically storing the renewable fuels and mixing them with a fossil fuel into a suitable petrol and/or diesel mixture – has the sustainability information of the renewable fuels supplied and saves the purchase of an emission allowance.
As a result, it could mean that the dynamics in the market for Renewable Fuel Units (HBEs) and, from 2026 for Emission Reduction Units (EREs), may mean that the dynamics in the market for Renewable Fuel Units (HBEs) and, from 2026, for Emission Reduction Units (EREs) will decrease, potentially leading to a decreasing innovation orientation in the sectorThe report was expressly intended as an exploration: it documents practice and possible consequences, without policy recommendations.
Letter to Parliament on progress on sustainable transport
On 8 September 2025, the State Secretary for Infrastructure and Water Management informed the House of Representatives about the progress of sustainable transport. In the letter to parliament, the State Secretary addressed the investigation and wrote: “Based on current insights, there is no reason for changes in legislation and regulations. The Ministries of Infrastructure and Water Management and Climate and Green Growth will continue to monitor developments and can propose alternatives if there is reason to do so. The results of the study strengthen the Ministry of Infrastructure and Water Management to continue its efforts on current initiatives. These initiatives provide more clarity in the fuel chain and help to improve sustainability in the chain. Examples of initiatives are the Union database, the product passport and the Clean Fuel Contracts project. This project aims to provide more insight and clear agreements within the chain.”
The letter to Parliament can be be found here.
Aside
In the letter, the State Secretary noted: “The study outlines the effects but does not provide much numerical explanation with regard to the impact on the sector”.
Upon inquiry with the Ministry of Infrastructure and Water Management, it was confirmed that the scope of the assignment of the research to studio Gear Up was to map out the practice and to explore the possible consequences. The project scope did not allow extensive quantitative analysis or scenario modelling to be carried out. In the study, studio Gear Up conducted interviews with various market parties, held a work session with NOVE members and consulted with the NEa. This provided a widely supported and representative picture of concerns, expectations and possible consequences among the parties involved.
