EU tuning in to energy efficiency? 

Energy efficiency should be the "cornerstone of public, energy and climate policies," according to a French EU Presidency press release that cited the conclusions of a working session held in parallel to the Council meeting.

"This is essential for reducing greenhouse gases and is one of the necessary mediums to long-term solutions to rising oil prices. The advantages of this choice are therefore three-fold: the reduction of greenhouse gas emissions, consumer savings, and on a strategic level, the easing of pressure on Europe's energy supply and in the medium-term, energy price tensions", according to the statement.

But despite these and similar declarations about the need for energy efficiency upgrades, the EU has not set any legally binding targets on energy efficiency. In contrast, legally binding targets for renewable energy uptake and CO2 reduction are currently being finalised as part of the EU's climate and energy package, proposed on 23 January (EurActiv LinksDossier).

Looking for incentives

Part of the problem is that, unlike regulating energy supply sources and emissions from large industrial installations, energy efficiency improvements are spread throughout the economy, involving a wide range of stakeholders, including a panoply of small firms. Wide variations in public incentive measures at national and even municipal level in EU countries complicate the situation further, as does the requirement for member states to agree unanimously upon any EU-wide changes to tax policy, such as reduced value added tax (VAT) rates for 'green' products and services. 

In addition, energy efficiency improvements can require large up-front investment which only pays off after several years, and the issue of who provides funding and how best to implement it remains the subject of a complex and far-reaching debate. 

Some argue that the EU and individual member states should provide more funds and/or tax breaks for efficiency upgrades, others argue that private or public-private financing should do more, and still others point to the potential of changing energy-wasting habits among consumers. 

The best solution, most experts agree, is an "integrated approach" that combines policy and fiscal incentives with technological advances, more favourable financing conditions and changes to consumer behaviour (see EurActiv's LinksDossier on energy efficiency funding).

Sustainable production

But setting a regulatory framework that effectively combines these elements is not easy. 

The Commission has once again delayed the release of its Sustainable Consumption and Production (SCP) action plan, which, together with an action plan on a Sustainable Industrial Policy (SIP), was originally scheduled for release in December 2007 (EurActiv LinksDossier).

It is unclear what the cause of the delay is, though stakeholder sources speculate that the Commission is divided internally on the extent to which energy-related products should be subject to 'eco-design' and labelling requirements, the main legislative part of the plans. Repeated EurActiv enquiries to the Commission's press service have produced little more than vague responses. And official announcements about publication dates by top EU officials – including most recently EU Industry Commissioner Günther Verheugen – have not been honoured. 

The plans are now expected "over the next couple of months," according to a 4 July speech by EU Energy Commissioner Andris Piebalgs before energy and environment ministers. 

In the meantime, a special EU regulatory committee will vote on standards for standby devices and other energy-using products, part of the implementation of the EU's eco-design requirements for energy-using products (EuP) Directive. The Commission is also planning to put forward a revised action plan on energy efficiency by spring 2009.

Nuclear's the answer?

One of the most commonly cited arguments in favour of greater energy efficiency is that it will reduce the EU's dependence on imported energy, notably oil and gas from Russia and the Middle East.

France is convinced nuclear energy is a key part of the solution to the problem. The country already relies on nuclear for 77% of its energy, and French President Nicolas Sarkozy on 3 July announced the construction of a new 'second-generation' nuclear reactor.

The plans will lead France to "experience a new industrial revolution," he said. His announcement infuriated French environmentalists, who said the pledge was a "catastrophic sign" for the environmental part of France's six-month EU Presidency mandate.

The extent to which other EU member states will follow France's nuclear lead remains to be seen. The issue still evokes heated controversy in EU official and public circles, and member states like Germany are reluctant to build new reactors (EurActiv 04/07/08). The UK and Italy, on the other hand, are moving ahead with new plant constructions in the coming years.

Going for 30

There is some speculation that France's decision to invest further in nuclear energy, which is considered a 'low carbon' technology, may also be tied in with the country's apparent willingness to up the EU's greenhouse gas (GHG) reduction ambitions from 20% to 30% by 2020 before an international climate change deal is in place.

The announcement to up the target, made on 3 July by French Environment Minister Jean-Louis Borloo, came as a surprise to Peter Hennicke, a researcher at the Wuppertal Institute in Germany. "I'm not sure exactly what is behind this decision," he told EurActiv France.

Under current plans, the EU would only increase its GHG reduction target if an international deal to fight climate change is agreed. Borloo did specify, however, that the 30% would not be attempted in the absence of a deal. The announcement is rather meant as a positive signal that is designed to act as a vote of confidence in the negotiations, he said.  

Please also visit EurActiv France for further coverage of this issue.