Mandatory Renewable Fuel Blending Ratio Raised to 3.5% Starting July

[Sejong=Asia Economy Reporter Kwon Haeyoung] The government plans to gradually increase the mandatory blending ratio of renewable fuel from the current 3% to 3.5% starting this July, and further expand it to 5% by 2030.

The Ministry of Trade, Industry and Energy announced on the 31st that it will give prior legislative notice from the 1st of next month on a partial amendment draft of the "Enforcement Decree of the Act on the Development, Use, and Promotion of New and Renewable Energy."

This amendment mainly aims to gradually raise the blending obligation ratio under the currently operating "RFS system" to expand the use of renewable energy fuels, and to improve the domestic sales volume calculation criteria for determining the annual blending obligation amount. The RFS (Renewable Fuel Standard) system mandates obligated parties (oil refiners, importers/exporters) to blend a certain percentage or more of biodiesel into transportation fuel (automotive diesel) for supply.

Accordingly, the current blending obligation ratio of 3% will increase to 3.5% starting this July, and will be raised by 0.5 percentage points every three years, expanding to 5% by 2030. The Ministry of Trade, Industry and Energy explained that even with the 5% increase in the blending ratio, there is no impact on vehicle performance above the legal standard (-18 degrees Celsius), and although the obligated parties’ costs will increase somewhat, considering the ▲creation of a renewable energy market ▲reduction of greenhouse gases, it is economically viable.

The ministry also plans to change the domestic sales volume standard for oil refiners used to calculate the annual blending obligation amount from the previous "prior year" to the "current year," the same as oil importers/exporters. Through this, oil refiners will be able to respond flexibly to market fluctuations such as ▲changes in sales volume compared to the previous year (e.g., whether discount gas stations win bids) and ▲expected decrease in diesel sales due to the expansion of eco-friendly vehicles.

An official from the ministry said, "We are also reviewing the introduction of a flexible obligation fulfillment system requested by the refining industry (allowing deposit of excess blending obligation and deferral of shortage)." They added, "We plan to complete the amendment of the Enforcement Decree of the New and Renewable Energy Act by the end of June and implement it starting in July."

This content was produced with the assistance of AI translation services.