The Radiative Transfer Model (RTM) is an explicitly resolved three-dimensional multi-reflection radiation model integrated into the PALM modelling system. It is responsible for modelling complex radiative interactions within the urban canopy. It represents a key component in modelling energy transfer inside the urban layer and consequently PALM's ability to provide explicit simulations of the urban canopy at metre-scale resolution. This paper presents RTM version 3.0, which is integrated into the PALM modelling system version 6.0. This version of RTM has been substantially improved over previous versions. A more realistic representation is enabled by the newly simulated processes, e.g. the interaction of longwave radiation with the plant canopy, evapotranspiration and latent heat flux, calculation of mean radiant temperature, and bidirectional interaction with the radiation forcing model. The new version also features novel discretization schemes and algorithms, namely the angular discretization and the azimuthal ray tracing, which offer significantly improved scalability and computational efficiency, enabling larger parallel simulations. It has been successfully tested on a realistic urban scenario with a horizontal size of over 6 million grid points using 8192 parallel processes. © 2021 Pavel Krč et al.