Commission ‘wake up call’ on energy savings law

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Member states have watered down the draft Energy Efficiency Directive so much that only 38% of the initial savings proposed by the European Commission can now be achieved, according to a “non-paper” by the EU Executive seen by EURACTIV.

The European Commission wants to place EU member states in front of their responsibilities ahead of an informal meeting of energy and environment ministers taking pace in Horsens, Denmark, today (19 April).

In a paper circulated amongst the ministers, the EU executive contrasts the member country's accepted provisions on the draft energy savings bill with its initial proposals. This is the first time the Commission has done this since it put the draft on the table more than a year ago.

The European Commission wants to place EU member states in front of their responsibilities ahead of an informal meeting of energy and environment ministers taking pace in Horsens, Denmark, today (19 April).

In a paper circulated amongst the ministers, the EU executive contrasts the member country's accepted provisions on the draft energy savings bill with its initial proposals. This is the first time the Commission has done this since it put the draft on the table more than a year ago.

The Energy Efficiency Directive entered its final phase of negotiations last week. But the Danish EU presidency, under pressure to reach an agreement by the end of its term on 1 July, was handed a weak and confusing negotiation mandate by EU national governments.

Silent approach

Brook Riley, an environmental activist at Friends of the Earth Europe, said the Commission's damning assessment “comes with authority, but with no noise" and recommends circulating it to economic and finance ministers, who are also involved in the decision-making process on energy efficiency measures.

Member states have taken a commitment to reduce consumption of primary energy by 20% by 2020, which translates into an additional 202 million tonnes of oil equivalent (Mtoe). The Energy Efficiency Directive is seen as the EU's main tool in achieving this target.

The Commission's proposals, published in June 2011, together with measures in transport, were meant to close the gap by delivering savings of 151.5 Mtoe. But the Council of Ministers, which represents the 27 EU member states, produced a version of the directive which is estimated to reduce primary energy consumption by about only 58.1 Mtoe, the Commission paper says.

The Commission’s position on the way the Council has been watering down the main provisions of the energy efficiency bill is not yet official, since the assessment was circulated only amongst interested EU stakeholders, MEPs and energy and environment ministers. 

“It is a good sign, but it is influential only in the trialogue meetings. It is not directly going to influence member states,” Riley said. “Everything is getting blocked about concerns on how we are going to finance energy savings, especially since there is no budget around Europe. I don't think there is an understanding among finance ministers that energy savings are beneficial.”

Economic benefits

The upfront costs needed for energy efficiency improvements are seen as an offset for electricity companies, which have called it an “energy-cutting” directive that “hampers growth”. They claim the draft is being too prescriptive and harmful to energy companies which are already taking actions on savings.

The Commission, for its part, begs to disagree. Voluntary energy savings agreements have failed so far, it argues, and the EU is not even half way to reaching its 2020 targets, with current energy savings of only 9%.

In its original version, the directive was supposed to trigger an increase in the EU's Gross Domestic Product of €34 billion by 2020, create almost half a million "green" jobs and reduce fuel expenditure by €38 billion annually reduced energy use.

In addition, the total cost impact of the directive over the 2011-2020 period is negative since it would create an annual average reduction in overall energy spending of about €20 billion, the Commission paper argues.

Cutting the roots of the directive

Attention has focused on Article 6 of the directive, which aimed to deliver over half the anticipated savings by obliging utility companies to cut their energy sales to consumers by 1.5% each year. However, the Council has watered down the scope of this obligation from 74.9 to 29.1 Mtoe, the Commission shows in its assessment.

“Without the magnitude of Article 6, it is impossible to reach the 20% savings,” said Claude Turmes, the Green MEP in charge with drafting the Parliament's position on the directive.

Article 6 was not the only one to suffer. A provision that would have obliged government authorities to renovate public buildings was reduced from 4.2 to 0.4 Mtoe, by including only “central government owned and occupied” structures. Similarly, other key articles of the directive were watered down by introducing conditionality clauses and opt-outs.

“The Commission coming out just before the Energy Council is not a coincidence," Riley said. "It's a wake up call for member states on why they need to change.”

In a joint letter sent yesterday (18 April) to energy and environment ministers, a coalition of environmental NGOs, local authorities and industry associations in the energy-savings sector called on EU ministers to uphold the Commission's initial proposal.

"Whittling away every article of the directive will help no-one except the fossil fuel exporters that benefit from Europe’s energy wastefulness. As ministers, you cannot continue to support the benefits resulting from energy savings while – with a few exceptions – opposing the policy measures that would lead us there."

Signatories include WWF, the European Insulation Manufacturers Association, Energy Cities, Climate Action Network (CAN) Europe and Friends of the Earth Europe.

"Member States thus far seem intent on creating a directive that efficiently achieves next to no action on energy savings,They all say they support efficiency but if you add up their actual positions, the result could be a Directive that is even weaker than existing legislation," said Erica Hope, of CAN Europe.

Europe aims to reduce its primary energy use by 20% by 2020, a target which is not legally binding.

The Energy Efficiency Directive was proposed by the European Commission in mid-2011 as part of its effort to reach this objective.

The 20% target will not be reached, unless the EU more than doubles its energy savings efforts.

In its draft directive, the Commission proposed individual measures for each of the sectors that could play a role in reducing energy consumption, including a controversial obligation on energy companies to reduce their deliveries to customers by 1.5% each year.

  • 1 July 2012: Cyprus takes over the six-month EU presidency.

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