Verbio SE: Positive momentum for biofuels: Regulatory developments in the EU and the US

Positive momentum for biofuels: Regulatory developments in the EU and the US

• The EU and US are providing important regulatory impetus for climate-friendly fuels such as ethanol and biomethane
• Global developments are driving demand: biofuels are gaining in importance internationally – not only in transport, but also in industry and shipping
• Verbio is strategically well positioned to benefit from regulatory normalisation and growing market interest

Leipzig, August 6, 2025 - Verbio continues to closely monitor developments in the European and US bioenergy markets. Current challenges – for example with regard to the reliability of sustainability certificates, market transparency and investment security – highlight the importance of robust and enforceable regulatory frameworks. The ongoing implementation of the EU's RED III directive, the confirmation of key elements of the IRA in the One Big Beautiful Bill Act (OBBBA) in the US, and initiatives in India, Japan, China and other parts of the world are providing important impetus in this regard and underscore the growing importance of renewable fuels such as ethanol and biomethane – both in the transport sector and in industrial applications. At the same time, Verbio emphasises the importance of active diversification and entrepreneurial agility in order to capitalise on opportunities in a changing environment.

Germany: National implementation of RED III

The planned national implementation of the revised Renewable Energy Directive (RED III) is a key lever for greater climate protection in the transport sector. The current draft bill from the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMUKN) dated June 19, 2025, addresses key weaknesses in the existing regulatory framework, particularly with regard to fraud prevention and long-term investment security. The draft takes a clear stance with restrictive measures against ongoing fraud. The continuation of the GHG quota until 2040 and the planned extension to additional sectors, namely aviation and shipping, create a more reliable framework for planning and capital commitment (source: BMUKN). The draft is therefore to be regarded as an important first step, the content of which is likely to be further refined in the course of the legislative process.

A revised draft for German implementation is expected by the beginning of October at the latest, with the aim of adopting the regulations by the end of December 2025. Due to this tight timeline, it cannot be ruled out that certain provisions will have to be implemented retroactively at the beginning of 2026. The implementation as of January 1, 2026, is a clearly stated objective of the BMUKN.

USA: Political decisions as potential market drivers

In the USA, new regulatory frameworks are creating additional opportunities for climate-friendly technologies. Among other things, the Inflation Reduction Act (IRA) provides tax support mechanisms for low-emission fuels produced in the USA and for CO₂ capture and storage. These measures will encourage new investment and further strengthen existing projects. Although individual details of the specific design are still open, the basic direction with a clear focus on improved greenhouse gas savings through the use of biofuels is clear and opens up attractive prospects. This will enable the US to expand its dominance as the world's largest, most efficient and cost-leading producer of low-emission biofuels. US ethanol is already the liquid fuel with the lowest production cost and remains significantly cheaper than fossil gasoline, even at current low crude oil prices. Our bioethanol and biomethane projects will benefit from these developments in the medium term.

At the same time, ethanol is also gaining strategic importance internationally: as part of several trade agreements (e.g. with the United Kingdom, Vietnam and Japan), existing trade barriers are being specifically removed, particularly for ethanol. This is likely to lead to an expansion of US ethanol exports in the medium term, especially as rising demand and improved margins are already evident today.

Global trends support long-term demand

Internationally, there is a clear upward trend in demand for biofuels. Countries such as India already blend 20% first-generation bioethanol into petrol (source: Ministry of Petroleum and Natural Gas, India) and are planning a further increase. Japan has decided to introduce E10 (petrol with 10% ethanol blend) nationwide by 2030. In the long term, the aim is to expand this to E20 by 2040 (source: USDA: Market Research GAIN Report).

Likewise, interest in biomethane is growing in industry and energy supply. In addition to regulatory requirements, security of supply and regional availability are key drivers of this development reinforced by geopolitical uncertainties in recent years. In China, the share of methane-powered trucks (LNG and CNG) in new registrations for heavy-duty trucks will exceed 35% in 2024 (source: The International Council on Clean Transportation, November 2024). This development shows a clear trend in China: while the passenger car sector is becoming increasingly electrified, heavy diesel trucks are being replaced by methane trucks – with the potential for the use of biomethane. We are observing similar developments in India.

At Verbio, biomethane sales outside the transport sector are growing steadily. Additional demand is being generated by specialised applications, such as in international shipping, where the IMO actively supports the use of bio-LNG to reduce emissions (source: IMO Strategy 2023). Biomethane also offers flexibility as an energy carrier: it can be converted into bio-methanol or renewable hydrogen – a structural advantage with a view to cross-sector decarbonisation.

Verbio: Strategically well positioned for growing demand

With existing capacities in Europe, North America and India, Verbio is well positioned. The combined ethanol and biomethane plant in Nevada is in a structured ramp-up phase and is showing a promising development.

Verbio is currently exploring partnerships and export options in the context of growing blending quotas and international programmes. This puts Verbio in a strong operational and strategic position to benefit directly from a normalisation of the regulatory environment and rising demand.

About Verbio

At Verbio we make more from biomass. In our biorefineries we convert raw materials and residual products from regional agriculture into climate-friendly fuels, green energy, and renewable products for the chemical industry and agriculture. In addition, we create high-value components from sustainably-generated biomass for the animal feed and foodstuff industries. We employ more than 1,400 people at our locations in Europa, Asia, and North America. Our motto “Pioneering green solutions” sums up what drives our international team: with innovative technologies and green solutions, we are shaping the social and industrial transformation toward climate neutrality and ecological production. We contribute to preserving natural resources and to safeguarding the planet’s environment for future generations. We combine global growth with commercial success. For us, climate protection is an expression of social responsibility. At the same time, we contribute to security of supply by converting locally available biomass into renewable energy sources and biobased chemicals. Verbio shares (ISIN DE000A0JL9W6/WKN A0JL9W) have been listed in the prime standard segment of the Frankfurt Stock Exchange since October 2006. Our headquarters are in Zörbig, Germany.

Important notice

This publication contains forward-looking statements that are based on assumptions and estimates made by the management of Verbio SE. Although the Company’s management is of the opinion that these assumptions and estimations are realistic, actual future developments and actual future results may differ significantly from these assumptions and estimates due to a variety of factors. For example, these factors can include changes to the overall economic climate, changes to the legal and regulatory framework in Germany and the EU, and changes in the industry. Verbio can give no guarantee and accepts no liability as to whether future development and the results actually achieved in future will match the assumptions and estimates made in this publication.