Revision of the Energy Efficiency Directive for stronger climate action

By: Emilia Samuelsson

The Energy Efficiency Directive 2012/27/EU (EED), which was adopted in 2012, established a common set of measures for the promotion of energy efficiency. Originally the aim was to ensure the achievement of the 20% headline target for energy efficiency. In 2018, as part of the Clean energy for all Europeans package, the EED was revised to update the policy framework, and a headline energy efficiency target was set for 2030 at a level of at least 32.5%.

Although the EED strengthened the EU energy efficiency policy framework, it still has some significant weaknesses. For example, the EU energy efficiency targets for both 2020 and 2030 are non-binding. This sends a weak signal to investors about the priority that should be given to energy efficiency.

This is also indicated by the current trends. After a gradual decrease since 2005, the trend reversed in 2014. This worrying overall development was most prevalent in buildings and transport. In 2018, final and primary energy consumption in the EU were 3.5 percent and 4.6 percent respectively above the 20 percent efficiency target set for 20201.

The indications for beyond 2020 are also far from ideal. According to the European Commission’s assessment, the sum of these contributions leaves a gap of around 3 percentage points to the current EU energy efficiency target for 2030. This underlines the importance of binding targets.

With the Commission’s proposal to increase the climate target for 2030, there is a new opportunity to improve and strengthen the level of ambition for energy efficiency as well as for renewable energy. This is also indicated in the Commission’s Impact Assessment accompanying the 2030 Climate Target Plan, which foresees among things, the revision of the EED and the Renewable Energy Directive in summer 2021.

Ambition levels and targets

The European Commission proposes the increase of the climate target to a 55% greenhouse emission reduction for 2030. However, as action in the next 10 years will be decisive in reaching the 1.5°C objective, the EU needs to increase its 2030 climate target to at least 65% by the end of 2020. According to the Commission, with a 2030 climate target of 55%, the energy consumption in end use sectors should fall by 36–37%, while primary energy consumption would need to decrease by 39–41%, by putting stronger policies in place2. AirClim supports CAN Europe’s call for an increase in the level of ambition of the EU’s 2030 energy savings target to at least 45% and to make the target binding.

Reducing energy demand offers multiple benefits beyond greenhouse gas emission reductions, such as lowering dependency on energy imports, job creation and improving health. A stronger and binding target is also a key enabler for the success of other Commission initiatives such as the Renovation Wave, the Energy Sector Integration Strategy, the Industrial Strategy and the Circular Economy Action Plan.

Other provisions and measures

Beyond the energy efficiency target, the revision of the EED needs to make sure that the Energy Efficiency First principle, a core focus of the energy policy in the EU, is supported by binding implementing legislation and regulations. Enforcement has not been fully effective, and some rules need to be reinforced, including on monitoring and reporting. The recommendations below could help in that direction.

Article 5

Article 5 sets rules for the renovation of public buildings by requiring member states to renovate 3% of the total area of heated and/or cooled buildings owned and occupied by central government. The building sector is the single largest energy consumer in Europe, responsible for more than one third of EU emissions. But less than 1% of buildings undergo energy efficiency renovation every year, so timely action is crucial.

Currently, roughly 75% of the building stock is energy inefficient, yet almost 85–95% of today’s buildings will still be in use in 20503. Public buildings should become an example of how this sector can be transformed. Therefore, the 3% renovation requirement of the EED should be expanded to all public buildings, prioritising deep renovations. This would help create a “renovation wave” in the public sector and deliver on its leading role, for example through the renovation of schools and hospitals.

Article 7

The EED revision needs to consider adjustments to the legal architecture set by the energy savings obligation in Article 7. This is a key provision of the Directive, as it is intended to contribute more than half of the total energy savings needed to achieve the EU’s 2020 and 2030 energy efficiency targets4. Under Article 7 of the EED, member states are required to deliver a minimum level of energy savings through national energy efficiency policies and measures implemented among final energy consumers.

During the 2014–2020 period, member states had to achieve 1.5% energy savings per year. However, the implementation of this provision was largely linked to the use of loopholes, which reduced its level of ambition from 1.5% to around 0.75% energy savings per year.

In 2018, this provision was revised and extended beyond 2020. For the new period beyond 2020, although the use of loopholes has been practically eliminated, the level of ambition for annual energy savings to be achieved was set at 0.8% instead of 1.5%.

Taking into account the importance of this provision for the energy efficiency target, the increase in the level of the energy savings obligation should be considered, together with a reinforced monitoring system and a simplification of its implementation to guarantee its enforcement.

Article 14

Under Article 14, all member states need to perform a comprehensive assessment of their heating and cooling potential, focusing on the application of high-efficiency cogeneration and efficient district heating and cooling. In 2019, the requirements for these assessments were updated to state more precisely what information member states should provide, and ensure that the analysis also addresses more technologies and heat sources. The European Commission has also published recommendations to help member states in the development of these assessments.

The updated requirements are a good starting point for a more systematic consideration of the need to tap into the energy efficiency potential. However, it needs to be ensured that they lead to the implementation of policies that form a holistic approach. The aim should be to reduce demand and move towards a fully renewable energy system, while phasing out fossil fuels. Furthermore, many provisions of Article 14, which are largely linked to promoting combined heat and power (CHP) generation, often using fossil fuels, are outdated. They need to be revised so that they facilitate the energy transition and the achievement of the EU’s long-term climate goals.

In summary, the EED should be revised to include an increased level of ambition for the 2030 energy efficiency target within a mutually reinforcing climate and energy policy framework. Reducing the overall energy consumption is the foundation for accelerating climate action and achieving carbon neutrality. In short, energy efficiency is a key element for a sustainable, resilient and equitable post-COVID recovery that can support a profound transformation of the economy and the energy system in line with the Paris Agreement goals. Strengthening the EED will help to achieve this.

 

Emilia Samuelsson with contribution from Dora Petroula, CAN Europe

 

Based on  The Coalition for Energy Savings feedback the roadmap on the Energy Efficiency Directive and CAN Europe’s feedback to the roadmap on the Energy Efficiency Directive

1. https://ec.europa.eu/energy/sites/ener/files/progress_report_towards_the...

2. https://www.euractiv.com/section/energy/news/europes-new-climate-plan-he...

3. https://ec.europa.eu/energy/topics/energy-efficiency/energy-efficient-bu...

4. http://energycoalition.eu/sites/default/files/20200911_Article%207%20EED...

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