The energy efficiency bill is entering its final round of amendments, as the first talks between the European Commission, Parliament and Council will commence in an informal meeting tomorrow (11 April).
Member states have given the Danish presidency an open mandate to negotiate the energy efficiency bill, but their position has been described by activists and MEPs as weak and confusing.
Governments have refused binding targets and have watered down the main provisions of the directive, but the Danish presidency accepted this mandate in order to start discussions and accelerate decision-making by 1 July, when it hands the rotating presidency to Cyprus.
Tomorrow’s talks mark the beginning of what Green MEP Claude Turmes (Luxembourg), in charge of negotiating the bill for Parliament, called “the real fight”. The Danish presidency will have to balance discussions between its two aims: reaching an agreement in the next couple of months and convincing member states to sign up to ambitious binding goals or measures.
The benefits of the Energy Efficiency Directive are not only environmental, but also economic, according to the European Commission’s director general for Energy Efficiency, Philip Lowe. The bill would serve as the EU's main tool in reaching its desired 20% energy savings target for 2020.
At the moment, the EU is lagging behind at only 9% energy savings. Missing the target at this level will cost member states at least €34 billion by 2020, and the opportunity to create more than 400,000 “green” jobs, Lowe said.
This shortfall in energy savings, Lowe said, will also mean the continuation of avoidable capital outflow from the EU economy via energy imports. The EU’s energy import costs soared last year to €400 billion.
Eroding the foundations
The 20% energy-savings goal was recently rejected by member states. In a text that saw 2,200 proposed changes, ending up as 18 compromise amendments, the Parliament asked member states to set binding national primary energy savings targets that would amount to the overall Union target of at least 20% primary energy savings in 2020.
In its negotiations, the Council asked for final energy consumption also to be covered in the national efforts to reach the targets. Allowing the generation and distribution processes to be included makes national binding goals easier to meet.
“On the targets, the member states are now going absolutely backwards,” said Matthieu Ballu, of the Coalition for Energy Savings, a coalition of campaign groups representing businesses and environmentalists.
The main pillar of the directive from the beginning has been an obligation requiring utility companies to achieve savings equivalent to 1.5% of energy sales in the previous year.
The EU’s 20% energy savings target amounts to a reduction of the Union's primary energy consumption of 368 Mtoe by 2020. Current efforts are expected to deliver just half that target. This leaves a gap of 190 Mtoe savings, out of which 110 Mtoe could be reached just through the energy obligation alone.
However, Germany, together with a few other countries, asked for “stable, working” alternatives to the energy savings obligation. Also, the base against which the 1.5% savings are calculated was further reduced by other member states’ requests to exclude from it 40% of the energy that is sold to the Emissions Trading System (ETS).
The energy cake covered by this main provision was further sliced by excluding the sales of energy, by volume, used in transport.
To satisfy the countries that already have a history in energy efficiency, savings from actions implemented since 31 December 2008 will be counted towards the 1.5% energy savings obligation scheme.
“Without the magnitude of article 6 [energy companies’ savings obligation scheme], it is impossible to reach the 20% savings,” Turmes said.
Further watering down
Another focus of the directive, the energy efficient renovation of buildings, was also reduced in scope. The initial proposal was to renovate 3% of the existing building stock owned by public authorities with a total usable floor area of over 250m2.
However, member states asked for this requirement to apply only to buildings occupied and owned by central government, which considerably reduces the number of structures falling under this provision.
“They did manage to destroy the Commission’s ambition on that,” said Ballu of the Coalition for Energy Savings.
Buildings account for 40% of Europe’s primary energy consumption and 36% of its carbon dioxide emissions. Experts consider that in terms of energy savings, the 3% target proposed in the energy efficiency directive is already very limited and that consumers’ bills will not see a reduction unless the target applies to all buildings.
In the last text agreed by member states, as seen by EurActiv, governments agreed on the importance of having energy efficiency measures in place. However, a few of them are mainly opposing the Energy Efficiency Directive because they already have similar national systems in place and further EU regulation would mean they would have to change.
“It is done selfishly against the interests of the EU,” said Ballu. “If we don’t get in shape by 2020, we won’t be on the path that allows us to do what we want for 2050.”
Erica Hope, of Climate Action Network Europe, said: “There is simply no way this version of the Directive would ensure delivery of the 20% target. We'll have to seriously hope the Parliament can put something resembling ambition and substance back into the mix.”
MEP Fiona Hall, reporting on the directive for the Liberal-Democrat group in the European Parliament, said: “This directive has to bring a mandatory element on what we do with energy efficiency if we are to make it work.We could end up with white elephants of infrastructure in the future that we won’t need if we don’t act now.”
Conservative MEP Vicky Ford said the 1.5% energy savings obligation scheme imposed on utility companies is “key” to her, adding: “Countries sign up to targets and then they do not achieve them. I want them to sign up to strong binding measures. If countries start to water down in the discussions binding measures, we have to go back to binding targets, but to me that would be a far weaker option.”
- 1 July 2012: Cyprus takes over the six-month EU presidency.