European directive on energy efficiency: an assessment

energy efficiency, european union, renewable energy, energy transitionThe energy efficiency directive from 4 December 2012 could have been instrumental in meeting the EU’s “3×20” goals: 20% reduction in greenhouse gas emissions, 20% cut in energy consumption, and 20% renewable sources in the European energy mix by 2020. Unfortunately, with barely more than half of Member States having complied with their obligation to submit their “national energy efficiency action plan” by 30 April 2014, the whole scheme has little chance of success.

Energy efficiency, a low priority for governments?

National plans, or NEEAPs, are roadmaps in which Member States set out their specific targets and the means to meet them. They include a schedule, the reforms they contemplate and funding sources. It is a typical process where the EU defines general goals and deadlines, while governments choose the best way to get there. Member States’ lack of interest in energy and environmental issues is also typical. It is all the more true as EU countries have been undergoing a fiscal crisis for a number of years, therefore lacking the necessary investment capabilities. No wonder Spain, given such circumstances, explained it could not make any significant effort.

Some national energy efficiency action plans still missing

The directive’s implementation is all the more difficult as it was poorly managed. During the negotiation phase, Member States gained a lot of room for manoeuvre by rejecting any binding target, which the European Parliament advocated, while accepting some binding measures and an indicative target of 20% energy savings. Besides, there are no sanctions for Member States that failed to submit a plan on time, such as Germany, Ireland, Italy and Poland, among others.

In the face of such delay, the Commission did not deem it useful to establish accurate goals for 2030, but rather created some confusion by recently organizing a public consultation on the directive in order to change some of its elements, although it has just come into force and must still be transposed into national law as early as June 2014. In this already difficult context, such mistakes undermined the political efficiency of the legislative process.

According to a study conducted by the Coalition for Energy Savings on all of the reports submitted by Member States to the Commission, most NEEAPs are incomplete, and therefore difficult to fully assess, and/or include unrealistic targets.

What is more, Member States take full advantage of possible exemptions, such as including energy savings achieved before or after the directive’s timeframe, not exceeding 25% of the latter. The UK’s failed attempt to include energy savings from three of four years before the 2014-2020 period is an example. The directive, however, tolerates a margin of error of 25% of the target figures, which leads Member States to aim at goals that are reduced by a quarter.

Energy efficiency, an urgent issue

Nevertheless, the stakes are high. To begin with, this is about the political credibility of the Commission and EU institutions at large. After the failure of the Lisbon strategy, whose aim it was to make the EU “the most competitive and dynamic knowledge-based economy in the world”, the EU must now fulfil its commitments, or else it will lose its credibility.

Energy efficiency is also a geostrategic issue: the UE spends 545 billion euros on energy every year. It imports 60% of its gas, half of which from Russia. It relies on imports for 80% of its oil. Reducing this dependency by saving energy will therefore foster competitiveness and stability.

Above all, this is an economic issue. Although initial investments are high, improving energy performance in buildings can yield significant returns. Public buildings renovation targets and the obligation for energy providers to reduce their sales to businesses and households by 1.5% yearly will not suffice. The EU also bets on consumer awareness and smart metres to help users save energy and boost purchasing power. This is a good idea, since user behaviour is decisive for energy efficiency in buildings; any energy efficiency policy likely to succeed must put it at its core.

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