Energy targets need to be bolder

The European Commission’s proposal “Fit for 55” includes new targets for renewable energy and energy efficiency.  They have to go further to be in line with the 1.5°C goal.

The European Union is getting ready for a major update of its climate and energy legislation to make the EU “Fit for 55” – its new 55 per cent greenhouse gas reduction target for 2030. On 14 July the European Commission presented its package of proposals including the Renewable Energy Directive (RED) and the Energy Efficiency Directive (EED).

Reducing greenhouse gas emissions entails a significant increase in the share of renewable energy production as well as improvements in energy efficiency.

Investing in energy savings and renewable energy clearly brings about benefits for people and the environment. The costs of the required transformation are far outweighed by the costs of inaction or delayed action. The avoided costs of environmental damage in the EU, e.g. from weather extremes, amount to €10,000 billion by 2050. The continued use of fossil fuels would only increase the bill for our economies.

One of the world’s biggest insurance groups estimates that a 2.5°C temperature increase will cause 8.0% GDP loss in Europe by 2050. With the revamped EU budget and the Recovery and Resilience Facility, member states have a once-in-a-life-time opportunity to ensure funding for a sustainable and inclusive investment process that promotes a just and clean transformation.

The Renewable Energy Directive (RED) was originally set up in 2001 to promote renewable energy use in electricity generation and was amended in 2018.

The new RED proposal increases the overall renewable energy share from at least 32% to at least 40% by 2030. However, as action in the next ten years will be vital in reaching the 1.5°C objective, the revised RED should propose an EU binding renewable energy target of at least 50% by 2030.

The RED revision does not reintroduce binding national targets, which would provide certainty and push governments to bolder climate action. Furthermore, even though no fundamental changes are proposed for permit granting and administrative procedures, according to a new provision the Commission will review these procedures one year after the entry into force of the Directive. This is a positive development, but the date or the review might come too late. Moreover, the review should also look into ensuring that citizens and communities are engaged in the energy transition. With a cross-cutting approach, it also needs to be ensured that the increased use of renewable energy potentials really mobilises synergies with biodiversity protection.

The proposal also tries to incentivise system integration of renewable electricity. Despite some positive additions, there is too narrow a focus on the transport sector. A general approach to encourage the direct use of renewable electricity in heating and cooling and in industry is missing. The proposed provisions for hydrogen currently promote hydrogen produced with renewable electricity and not with fossil fuels (if the upcoming Delegated Act confirms this principle). However, provisions that already exist in the current RED and leave the door open to fossil-based fuels (e.g. so-called ‘recycled carbon fuels’) have not been deleted. Finally, even though some changes are being proposed, the bioenergy criteria are not sufficiently strengthened.

The Energy Efficiency Directive (EED) aims to promote energy efficiency measures to improve energy savings throughout Europe. The European Green Deal together with the commitment to climate neutrality and to a higher climate ambition for 2030 require the EU to update its energy efficiency target. The revision includes a higher and EU binding energy efficiency target of 36% for final and 39% for primary energy consumption for 2030 (9% if compared to the new 2020 Reference Scenario projections).

This level of ambition is in line with the 55% greenhouse gas emission reduction target for 2030 but is not enough to help bring the EU in line with the 1.5°C goal. The NGO coalition CAN Europe calls for an EU binding energy efficiency target of 45%. Furthermore, the proposal does not include national binding targets. However, it introduces a delivery mechanism in case there is insufficient progress to achieve the national contributions, which is similar to the Renewable Energy Directive. This is an improvement compared to the current situation where no corrective action is foreseen.

In terms of measures, the proposal foresees a higher annual savings rate of 1.5% for the Energy Savings Obligation from 2024 onwards and more stringent provisions for the renovation of buildings owned by public bodies. Furthermore, there is a new obligation to reduce the energy demand in the public sector by at least 1.7% annually, and new rules that are relevant to tackling energy poverty are set. A new overarching provision introduces a stronger legal basis for the implementation of the Energy Efficiency First principle.

Finally, the heating and cooling provisions related to planning, highly efficient cogeneration and efficient district heating are updated. Unfortunately, they still fail to trigger a quick and extensive shift away from fossil fuels and towards an energy system based on renewable energy.

In its response to the “Fit for 55” package, CAN Europe calls for the EU to increase the level of ambition of climate and energy legislation well beyond the current proposals, if the EU is to fulfil its Paris Agreement commitment to limit global temperature rise to 1.5°C.

“While we keep witnessing the devastating impacts of climate change on people’s lives, the environment and our economy, we expect the EU to recognise the urgency to act and live up to the commitments made in the Paris Agreement. To limit temperature rise to 1.5°C, the EU would need to reduce its greenhouse gas emissions by at least 65%. The Commission proposal does increase the target to -58% which is good but this increase is not even halfway what is needed to make the package fit for 1.5 and in line with the Paris Agreement,” commented Wendel Trio, Director of CAN Europe.

“It’s now Member States’ and the European Parliament’s roles to improve the different pieces of law and enable the EU to further overshoot the 55% emission reductions target towards -65%. Only with further ambition will the package be turned into a policy framework that will bring us all to the 1.5°C target,” added Wendel Trio.

A welcomed proposal by the Commission’s proposal to keep national emission reduction targets in the Effort Sharing Regulation (ESR) to tackle emissions from road transport, buildings, agriculture and waste, but regrets the absence of similar targets in the proposed energy legislation such as the RED and EED. Some additional energy and climate laws are expected to be revised in the coming months: Revision of the Energy Performance of Buildings Directive (EPBD); Revision of the Third Energy Package for gas (Directive 2009/73/EU and Regulation 715/2009/EU) to regulate competitive decarbonised gas markets, scheduled for December 2021.

By Emilia Samuelsson

Vased on CAN Europe’s rapid assessment of the ‘Fit for 55’ main files, 20 July 2021, https://caneurope.org/can-europes-rapid-assessment-fit-for-55-main-files...