Energy Efficiency: A deal, but not a great one

New features like “Renovation roadmaps” must now be turned into reality in member states. Photo: lenets_tan  / Fotolia

On Thursday June 14 all three branches of EU government reached agreement on the  Energy Efficiency Directive (EED). Formal adoption will be completed later this year.¹

The final deal is an improvement compared to earlier versions proposed by member states, but falls a long way short of the ambition required to meet the EU’s 20 per cent target. The Coalition for Energy Savings estimates that the directive will deliver just 15 per cent savings by 2020 compared to business as usual. Member states are thus set to deny themselves many of the potential benefits that a stronger directive would have brought.

It seems that opposition to reducing energy waste, and a failure to see the bigger picture, have prevented a truly ambitious agreement from materialising.

Nevertheless, it is an important step forward in realising the potential of energy savings in the fight against climate change, and should inspire other countries in the world to take action on energy efficiency.

Perhaps the most revolutionary achievement of this directive is that – for the first time ever – it puts a precise definition of the 20 per cent by 2020 target into legal text. Specifically,  the EU’s energy use in 2020 must not exceed 1474 million tons of oil equivalent (Mtoe) of primary energy, or 1078 Mtoe of final energy (energy after transformation from its raw form). To put this into context, China’s primary energy consumption in 2004 was 1379 Mtoe; in 2009 it was 2270 Mtoe.

Regrettably however, despite the best efforts of the European Parliament, the directive does not require legally binding overall national targets. This is the one thing that past experience tells us would have given the best chance of the 20 per cent target being met. Instead, member states must adopt indicative, i.e., voluntary, targets. In 2014 the Commission will review progress towards the 2020 target and if necessary they will propose further measures to ensure the target is met.

Member states must also establish schemes that will oblige energy companies or distributors to deliver cumulative annual energy savings equivalent to 1.5% of the previous year’s final energy sales. These will help to establish clear financing and delivery mechanisms for energy efficiency measures, whilst inducing a shift in the business models of energy companies towards the provision of energy services, and not just selling large amounts of energy.
Unfortunately, this provision is much weaker than originally intended: energy sold to transport is excluded, and member states managed to introduce a wide range of loopholes which, taken together, effectively reduce the savings rate to more like 1 per cent.

Member states’ desire to diminish the impact of the directive also resulted in the 3 per cent annual renovation rate for public buildings being squeezed to only cover central government buildings. Provisions on public procurement, industrial audits and combined heat and power generation are now also little more than voluntary.

On the other hand, the Parliament managed to win some important amendments in at least three areas.

First, whereas the Commission’s proposal included no direct provisions addressing the EU’s residential and commercial buildings, the final text requires member states to prepare long-term “renovation roadmaps” for their entire building stock.

Second, member states are obliged to facilitate the establishment of ‘financing facilities’, designed to raise money for energy efficiency purposes and to help ensure that it is spent effectively.

Finally, the Parliament also managed to secure a written statement from the European Commission which details the steps it will take to make adjustments to the EU’s Emissions Trading System to take account of the EED’s emission-reducing impacts.

Marks of the NGO effort to obtain the strongest possible directive are clear in many places. For instance the fact that the 2014 review must now be accompanied by – and not just ‘followed by’ – proposals for further measures; the clear expression of the savings rate to be delivered by energy company obligations, and the introduction of new concepts such as the renovation roadmaps and financing facilities.

But of course, any directive is only as good as the way it is transposed into national law, and implemented on the ground. As a network we will now be working hard to ensure that this is done as ambitiously and as effectively as possible – and also to make sure that whatever comes forward in 2014 will actually deliver the 20 per cent target.

Erica Hope, CAN-Europe senior policy officer

This article has previously been published in HotSpot #65, a newsletter from CAN-Europe.

1) The directive was formally approved by the Parliament on 11 September and will be processed by the Council of Ministers in October