Although newly crunched numbers make a strong case for setting a higher energy efficiency target, EU member states were unable to sign up to a compromise on Wednesday (30 May) that would have sealed an agreement before the end of Bulgaria’s presidency.
During the fourth instalment of talks between the European Commission, Parliament and Council on updated energy efficiency rules on Wednesday afternoon, negotiators failed to broker a deal.
It was always going to be a hard ask, given the different positions of the parties on the overall target and the annual energy savings mechanism, known as Article 7.
But fresh numbers produced by Ecofys on investment costs sought to help break the deadlock by convincing national reps that previous estimates were very conservative and that a higher target would be possible for the same amount of money.
The issue is tied to discount rates, used by the EU and member states to calculate the amount of funding needed to achieve certain benchmarks and targets.
When the Commission produced its initial energy efficiency proposal, it used a discount rate of 10% to come up with its 30% binding target, judging it to be the most cost-effective option.
However, an April study by the European Council for an Energy-Efficient Economy (ECEEE) insisted that 10% was too high compared to a member state average of just 5.7% for buildings.
The study added that if the Commission had used the member state average, costs would have been lower and negotiators could have been freer to push for even higher targets and annual savings.
Ecofys’s findings reiterate that point and show that a 40% target, calculated using the member state average, requires the same level of investment as the Council’s initial 27% target, reached by using the Commission’s old 10% rate.
The study also factors in health costs and benefits, given that increased energy savings should mean lower emissions and better air quality. Annual savings of €55 billion could be reached on an additional €28 billion investment, making a 33% target very feasible.
Experts told EURACTIV that when factors like GDP and employment benefits are factored in, the case for an even higher figure becomes stronger and stronger.
Although the Commission presented its own freshly crunched numbers, which sources say come to the same conclusions as the Ecofys figures, the Bulgarian presidency was unable to cajole enough countries into showing more ambition.
By the end of Wednesday’s trilogue, the Council was only willing to back a non-binding 32% target. Numerous EU sources told EURACTIV that the Parliament would not even consider anything below 33% and that a binding benchmark is still very much the objective.
Bulgaria’s presidency went into the talks with the same mandate it had for the last trilogue in mid-May. That means it could only negotiate a target “close to 30%”. The vagueness of the wording left it open to interpretation but clearly some convincing still needs to be done.
But there is still some hope of a deal before Bulgaria hands over to Austria in July. Member states now accept an Article 7 that is close to what the Commission already proposed and an 11 June energy summit might provide Bulgaria with a fresh mandate.
Shadow rapporteur on the file MEP Benedek Jávor told EURACTIV after the talks wrapped up that “Parliament made a significant move that respects the political commitment and also takes into account realities in the member states: we offered a 1% effective savings while giving the MS the flexibility to use limited exemptions and include a corresponding transport share.”
But the Greens/EFA lawmaker added that “the Presidency was not quite constructive, I sincerely hope they can step up their game for the next phase – Europe needs to deliver on the Paris Agreement.”
With a fifth trilogue already scheduled for the afternoon of 13 June in Strasbourg, Bulgaria will hope to leave the 11 June summit with permission to go even higher on the overall target and close the file.
Ultimately, Bulgaria could use the support it already has from progressive nations like Sweden and France to strong-arm the others into accepting a deal that is more palatable to the Parliament, as it could be one of the presidency’s last major acts.