Energy savings – Will the energy efficiency directive allow the European Union to meet its 2020 targets?

energy savings, energy efficiency directive, energy efficiency, European commission, European Parliament What is at stake ?

The clock is ticking for Europe to achieve its 2020 objectives

In 2010, EU Member States set the objective of 20% primary energy savings by 2020, which is a 368 Mtoe (Million tonnes of oil equivalent) of Europe’s final energy consumption.

However, the European Commission indicated that according to current trends,  Europe would only achieve half of the objective by 2020. In this perspective, the European Commission submitted a proposal for a directive on energy efficiency on 22 June 2011, which is currently being examined by the European co-legislators (the Parliament and the Council).

The European Parliament agrees on an ambitious draft

On 28 February, the Parliament’s committee on Industry, Research and Energy (ITRE) adopted a report drafted by Claudes Turmes, a Green member of the European Parliament from Luxemburg.  The vote paves the way for an informal trialogue with the European Commission and the Council, in order to reach a first reading agreement on the energy efficiency directive.

The week before, a compromise had been found between the main European parties on the draft text, during the plenary Session in Strasburg. The deal allowed the committee to adopt the draft Turmes report by a large majority, 51 voted for, 6 against and 3 abstained.

The European Parliament stands for an ambitious reform with long term perspectives

National binding targets for energy savings (Article 3)

Unlike to the European Commission’s proposal, which refrained from introducing binding energy savings targets, the European Parliament followed the trail blazed in a 2010 resolution calling for the introduction of such objectives. The European Parliament thus calls upon the adoption of binding objectives, by Member State, to bridge the energy savings gap and meet the 20% target by 2020.

For example, the reference value proposed for France is 68.9 Mtoe, 58.7 Mtoe for Germany, 48.1 for the United Kingdom and 49 Mtoe for Italy. Through this initiative, the European Parliament intends to introduce a cap on energy consumption: it shall not exceed a cumulative 1474 Mtoe for the EU-27. In addition, the European Commission would be asked to define equivalent targets for 2030, as early as 2014.

Renovating public buildings remains a key priority (Article 4)

At first glance, the text adopted by the ITRE committee seemed to be giving ground on the renovation of public buildings. Though it reduces the annual renovation rate from 3% proposed by the Commission to a mere 2.5%, it also compells public authorities to undertake more significant refurbishment. The text introduces the concept of “deep renovation”, which means a reduction of at least 75% of the final consumption of a building. Given the European Council’s notorious reluctance on this matter, negotiations promise to be tough in the months to come.

A Roadmap to renovate the entire building stock by 2050 (Article 3a)

The Parliament did not refrain from including the entire building stock within the scope of the directive, in a move to increase the pressure on Member States to systematically renovate existing buildings. To this end, an amendment sets an objective to renovate 80% of existing buildings by 2050, based on 2010 levels. If this amendment is adopted, Member States would also have to submit roadmaps to lay out how they will achieve the objective.

Energy end use saving schemes (Article 6): stimulate “energy services”

The ITRE committee found a compromise on one of the most controversial proposals from the European Commission. Indeed, energy distributors would have to achieve cumulative annual enduse energy savings equal to at least 1.5% of their annual energy sales, by volume, averaged over the most recent three-year period for that Member State.“ In other words, energy companies are asked to help their customers to save energy. However, the European Parliament’s text would allow Member States to consider alternative measures to reach the same amount of savings.

Towards a CO2 allowance set-aside?

One of the main novelties in the Parliament’s text is the introduction of an article requiring the European Commission to present an impact assessment on incentives for low-carbon technologies incentives and carbon leakage as early as 2013. Futhermore, MEPs opened the door to a CO2 quota freeze before the beginning of the third phase of the European Emission Trading Scheme (ETS). The reference to a potential quota freeze was introduced under pressure from the European Parliament Environment committee. This was made obvious by a statement from two German MEPs from the European People’s Party, Peter Liese and Richard Seeber, who claimed victory over the introduction of a reference to allowance set-aside in the text.

Next steps

The rapporteur is granted a mandate to negotiate with the European Council

On 28 February, Members of the European Parliament have not only voted on the Turmes report but, by a separate vote, also granted him a mandate to kick start negotiations with the European Council. This parliamentary practice is used to try to secure a first reading agreement and thus speed up a legislative process, often criticized for its slow pace.

It means that the rapporteur informally negotiates directly with the Council and the Commission on a compromise text, ready to be adopted by both institutions. This procedure’s specificity is that the compromise text never goes back to the parliamentary committee’s docket and is directly put for a vote in plenary session. This procedure gives a considerable amount of power to the rapporteur, nonetheless Claude Turmes obtained a negotiating mandate, though by short a majority (31 for, 23 against and 5 abstentions), suggesting a form of reluctance in allowing Mr. Turmes to negotiate in their name.

The negotiations to come: uncertainty over a June deal

Though the Danish presidency recently affirmed that a quick deal on the directive was still in sight, it seems almost impossible given the gaping hole separating the two institutions. The Council introduced its propositions, which weaken the main provisions of the project. Article 6 in particular has been re-designed, towards a limited ambition of 1% or 1,25% instead of 1,5%. In reply, the Commission published on April 24th a “non-paper”, in which it compared the original directive draft with the directive project established on April 4th by the Council. According to this latter, “the Council version should […] reduce the primary energy consumption by 58,1 Mtoe while the Commission proposal should cut the consumption by about 151,5 Mtoe, necessary to close the gap (in line with the measures in the transport sector) and reach the  objective of 20%. The impact of the Council version is likely to account for 38% of the expected impact of the Commission proposal.” Having become a crucial actor for the directive, the debate is raging over in the Member States: associations for the protection of the environment, consumer advocacy groups and those promoting energy efficiency (Greenpeace, CLER, FNE, Fondation pour la Nature et l’Homme, Réseau action climat, effinergue, WWF, Gimélec, Isolons la Terre contre le CO2) asked the French State to “take a constructive position so that the Directive could be ambitious”. Without a break after this standpoint, the French Ministry of Ecology, Sustainable Development, Transport and Housing specified that “France fully supports this measure and confirms to non-governmental organizations, welcomed on April 13th, its commitment to obtain an ambitious directive.

Useful links:

European Parliament subject file on the energy efficiency directive

European Union 2020 objectives

Coalition for Energy Savings Gapometer

Procedure file of the European Parliament for the Energy Efficiency Directive

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