The European Commission plans to impose binding energy-efficiency targets on EU member states, according to a draft of the EU's revised Energy Efficiency Action Plan obtained by EurActiv.
Entitled '7 Measures for 2 Million New EU Jobs', the draft seeks to simplify the 2006 Action Plan for Energy Efficiency by concentrating on a few effective measures.
It acknowledges that the EU is set to fall short of its 2020 target to slash energy consumption by 20%, instead achieving only 11% by the deadline.
The most controversial initiative in the draft is a plan to introduce mandatory energy-saving obligations on member states "in line" with the EU's aspirational goal of using 20% less energy in 2020. The paper suggests that the targets could be either sector-specific, potentially limited to buildings, or cover all aspects of the economy.
However, the Commission stops short of specifying whether the EU should set an absolute cap on each member state's emissions by 2020 or whether the savings would be in relation to their projected energy consumption. The final shape of the plan will emerge after an impact assessment has explored these options, as well as the likely need for burden-sharing measures between member states.
Unlike the EU's mandatory greenhouse gas reduction and renewable energy targets, legally binding energy-efficiency goals have proven controversial. Few member states have expressed their support for the fear that it would come at a high cost, Sweden being the exception (EurActiv 25/06/09). Moreover, there are disagreements within the Commission, with DG Environment even arguing that member states have already been asked to do enough in the energy and climate package without binding efficiency targets.
Nevertheless, the EU executive maintains that the additional measures in its revised plan will achieve energy savings cost-effectively so that any financial burden will be "strictly limited".
Reburbishing 15 million buildings
The second measure in the draft targets buildings as the highest priority. The sector represents 40% of Europe's energy consumption, but so far little has been done to harness the immense savings potential.
The Commission proposes to refurbish 15 million buildings by 2020. Insulating the millions of existing buildings and fitting them with double-glazing and appliances using less energy would save Europe 66 million tonnes of CO2, while creating 300,000 direct and 1.1 million indirect jobs each year, it says.
The draft does not earmark any money for the project, only referring to support from the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD). It states that funding would have to be found from the EU's next Financial Perspectives, and unused money from the economic recovery fund could be used for the start-up phase before 2013.
Moreover, the Commission invites member states to set up a National Energy Efficiency Fund and use revenues from emissions trading to improve the efficiency of their buildings.
Other initiatives in the plan include a network of smart cities to pioneer new technologies in a bid to cut emisissions by more than 20% by 2020.
The power sector is also addressed, the intention being to provide incentives beyond the emissions trading scheme to cut energy use. The EU executive plans to propose a directive obliging each member state to set up a white certificate scheme. However, the schemes would remain national instead of an EU-wide system in which certificates could be traded between member states.
One major omission from the action plan is the transport sector, which the EU executive plans to deal with separately. It plans to table a White Paper next year, detailing measures targeted specifically at transport, which accounts for almost a fifth of EU primary energy consumption.
The Commission plans to table the Action Plan this month, but sources say this looks unlikely and expect delays.
Environmentalists welcomed binding energy efficiency obligations but added that these would have to be absolute reduction targets.
Friends of the Earth Europe stressed that energy efficiency holds by far the cheapest emissions reduction potential and any efficiency targets would have to match overall EU CO2 cuts "based on climate science and the EU's historical responsibility for causing climate change".
"That the new Energy Efficiency Plan will finally set binding energy efficiency targets for member states is a big step forward since the non-binding target has so far failed to deliver. But it will be very disappointing if the binding targets are only in line with a 20% emission reduction target for the EU," said Sonja Meister, climate campaign coordinator at Friends of the Earth Europe.
WWF was not impressed by the draft, questioning whether the "vague" document without a clear timetable or specifications on funding needs and sources is ready for publication.
"This document opens more questions than it answers. There's no doubt that the revision of the Energy Efficiency Action Plan and of the energy conservation policy of the EU is needed, but what we are questioning is the adequacy of this text in comparision to the challenge we have ahead," said Mariangiola Fabbri, WWF's senior energy policy officer. "We would support an absolute energy saving target because we really need to know against what we are measuring ourselves," she added.
Business also expected commitments to financial support for the measures.
The Energy Efficiency Industrial Forum (EEIF) argued that the energy-efficiency industry poses a challenge for existing financial structures. It argued that measures incentivising the purchase of modern energy-efficient goods may not promote major building renovations or public sector investment for reasons like consumer preferences, inertia or market failures.
The business group called on the Commission to create, in collaboration with the EIB, "necessary tools and intermediate structures that would bridge the
gap between the EIB and local actors, facilitating financing access to smaller projects, and new member-state projects".
Veolia Environnement, an environmental service provider, called for financial support mechanisms to "fully exploit the energy saving potential presented by urban heating/cooling schemes, cogeneration and the energy restructuring of the EU's existing building stocks". It argued that large institutional investors are focused on large projects while the needed "energy revolution" requires the aggregation of small projects.
"However, albeit limited, a number of financial products, including from the EIB, are targeting this kind of operation but do not seem to be known enough by the market. The EU can play a role to promote and encourage the use of products adapted for the financing of small projects," Veolia said in a statement.