Navigating the certification landscape: Understanding RED III, ISCC PLUS and CORSIA

For businesses operating in the renewable fuels sector, the regulatory landscape has never been more complex – or more promising for those who navigate it successfully.

Three certification frameworks are reshaping market access and opportunities:

• EU Renewable Energy Directive III (RED III)
• International Sustainability and Carbon Certification PLUS (ISCC PLUS)
• Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)

In various ways, these frameworks determine which fuels qualify for premium pricing, government incentives, and market access across the world’s largest energy markets. For businesses in the renewable energy and renewable fuels industries, understanding what they mean and how they interrelate is essential.

RED III

The EU’s RED III, adopted in October 2023, is the latest revision of the bloc’s flagship renewable energy directive. It mandates that by 2030, at least 42.5% of the EU’s energy must come from renewable sources, with an additional 2.5% indicative target. But RED III goes far beyond headline numbers. For the transport sector, it sets out dual obligations: member states must either ensure that renewables account for 29% of transport energy or achieve a 14.5% reduction in greenhouse gas intensity. There are also binding targets for advanced biofuels and renewable fuels of non-biological origin (RFNBOs), which must together account for at least 5.5% of transport energy, with a minimum of 1% coming from RFNBOs specifically.

In industry, RED III is equally demanding, requiring that at least 42% of hydrogen used in industrial processes be derived from RFNBOs by 2030, rising to 60% by 2035. The directive also introduces new sustainability criteria for biomass and bioenergy, tightens rules on forest biomass, and lowers the reporting threshold for new bioenergy installations from 20 MW to 7.5 MW.

Compliance with RED III is not optional for businesses operating in or exporting to the EU. The directive is legally binding, with member states required to transpose its provisions into national law by May 2025. For companies, this means a renewed focus on traceability, sustainability verification, and supply chain transparency. Certification schemes such as ISCC EU, 2BSVs or REDcert play a central role, providing the necessary documentation to prove compliance with the directive’s stringent criteria.

ISCC PLUS

While RED III is limited to the European market, many businesses – particularly those with global supply chains or operations outside the energy sector – are turning to voluntary certification schemes like ISCC PLUS to demonstrate their sustainability credentials. It is increasingly recognised as a market differentiator, enabling companies to proactively address consumer expectations for sustainability. ISCC PLUS has become a popular choice for firms seeking to future-proof their operations in an environment where sustainability standards are only set to rise.

The ISCC PLUS regime is particularly relevant for producers in markets that are not regulated by RED, or for products that do not qualify as biofuels. For example, in the fuels and chemicals industry this may include products like bio-LPG, bio-naphtha or base oils. These products can either be produced from organic raw materials or from circular fossil-based materials, such as car tyres. Many of the original feedstocks for these can be extracted again at the end of their lifecycle, for instance by pyrolysis. The newly-produced circular oil can then be introduced into the existing manufacturing process. The increasing demand for bio-based monomers, as well as the option to introduce a circular economy, makes ISCC PLUS a popular choice in the chemicals industry to demonstrate a commitment to sustainability. Other industries, such as tyre manufacturers, cosmetics, packaging or the food and feed industry, are also increasing the demand for this certification standard.

ISCC PLUS is governed by ISCC itself. There are competing schemes, such as RedCert2, but currently these do not have the same relevance as ISCC PLUS. Being ISCC PLUS certified does not ensure compliance with any EU regulation, but demonstrates a credible and third-party verified sustainability claim. A refinery may have both schemes in place: RED III to certify its biofuels and ISCC PLUS to certify other products, such as bio-naphtha.

CORSIA

The aviation sector, meanwhile, faces its own challenges and obligations, embodied in the CORSIA scheme. Developed by the International Civil Aviation Organisation (ICAO), CORSIA aims to cap and offset CO₂ emissions from international flights. While voluntary until 2027, it will soon become mandatory for all ICAO member states, requiring airlines to offset emissions above 2020 levels through the purchase of approved carbon credits. The scheme also incentivises the use of sustainable aviation fuels (SAFs), known as ‘CORSIA Eligible Fuels’ (CEFs). Notably, the criteria for classifying CEFs are different to those laid out in RED III. SAF can also be certified under ISCC EU as it counts as a biofuel. EU certification for SAF is required to fulfil the blending obligation on obligated parties.

For airlines operating within, to, or from the EU, as well as airports, the interplay between CORSIA and RED III is complex. Both frameworks require robust traceability and certification, but their sustainability criteria and GHG savings thresholds are not always aligned. As a result, airlines and fuel suppliers must navigate a patchwork of overlapping and sometimes conflicting requirements, often relying on certification schemes such as ISCC CORSIA or the Roundtable on Sustainable Biomaterials (RSB) to demonstrate compliance. The reporting obligations for airlines (as well as  shipping companies) have also introduced a new proof: the proof of compliance document.

Early engagement can reap rewards

Understanding the relationship between these frameworks is vital. Compliance with RED III is now a prerequisite for market access in the EU, requiring not only the adoption of renewable energy sources, but also the implementation of rigorous traceability and certification systems. The introduction of the EU’s Union Database (UDB) is expected to enhance transparency and reduce fraud, but it also adds a layer of complexity, particularly for companies with global or multi-tiered supply chains.

At the same time, voluntary schemes like ISCC PLUS are becoming essential tools for companies seeking to differentiate themselves in increasingly sustainability-conscious markets. They offer flexibility and global applicability, but also require ongoing investment in supply chain management and data collection. For the aviation sector, the dual demands of CORSIA and RED III mean that airlines and fuel suppliers must stay abreast of evolving standards and ensure that their certification strategies are robust enough to satisfy both EU and international requirements.

Ultimately, while RED III, ISCC PLUS, and CORSIA each serve different purposes and sectors, they make similar demands for traceability, transparency, and credible sustainability claims. For businesses, the message is clear: early engagement, proactive adaptation, and a holistic approach to certification and compliance will be critical in navigating the rapidly evolving global sustainability landscape