EU climate rules a missed opportunity to drive energy efficient building renovation

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

The Effort Sharing Regulation is a missed opportunity to drive building renovation, according to Shradha Abt. [Aapo Haapanen/Flickr]

The EU must focus its legislation on policies that have the most potential to bring change. Unfortunately, its new Effort Sharing Regulation to cut greenhouse gas emissions missed an opportunity to drive energy efficient building renovation, which has huge potentital to cut CO2, writes Shradha Abt.

Shradha Abt is Energy Efficiency Manager at the European Insulation Manufacturers Association (Eurima). 

With post ‘Brexit’ fever still one of the most dominant political conundrums being discussed in Europe, many believe that the strategic question is as simple as this; more or less EU? By which you can read, more or less EU regulation?

It’s a bit more complicated than that, in particular with the geopolitical difficulties at stake which are best solved collectively.

At time when the EU’s value-added and even legitimacy are put into question (warranted or not) – it’s time to rethink things both at European as well as national level.

The EU must focus on those policies which have the most cost effective potential to be a real ‘game changer’ for business, the people, government and the planet alike, but also deepen the engagement with the layer between the EU and the people – the regions, cities and municipalities to help bridge the trust gap.

On 20 July 2016 the European Commission published its ESR (formerly known as the Effort Sharing Decision) – on binding annual greenhouse gas (GHG) emissions targets for member states.

It aims for a 30% emissions reduction by 2030 from 2021-2030 for the transport, buildings, agriculture, waste, land-use and forestry sectors.

To put it simply, the 2030 GHG emissions targets are divided into two sub targets. One for the Emissions Trading System sector covering 45% of EU emissions and another for the non-ETS sectors, now the ESR, covering 55% of the EU’s CO2 emissions for the next decade.

The main issue with the ESR, is that it is based on the principal mechanism of GDP per capita, where basically low income countries get room to catch up with high income countries by allowing them to have higher emissions. That is instead of being based on bottom up assessment of the sectoral potentials, which would have drastically different results and much higher gains for society overall.

First, there is no mention, let alone prioritisation of ‘energy efficiency first’ as the abiding principle to achieve a decarbonised EU or the COP21 goals.

Setting an ambitious energy efficiency target, will ensure consistency between EU and national climate and energy targets, help restore a vision for today’s buildings and homes and scale up renovation activities.

An ESR based on bottom-up assessment of the cost-effective sectoral potentials for GHG emission reduction in combination with a clear long term vision for the buildings sector, would drive energy security, job- and growth-enhancing investments in low-carbon innovation and resource efficiency, and provide businesses with certainty and confidence in the construction market.

Second, due to the GDP per capita rule, the highest burden is carried by the richest nations Luxembourg (40%), Sweden (40%), Denmark (39%), Finland (39%), Germany (38%), France (37%) and the UK (37%). As a result some of the Eastern European member states with the most cost-effective potential to decarbonise and those that would have the most to gain such as: Lithuania (9%), Poland (7%), Romania (2%) and Bulgaria (0%) are not incentivised to reduce emissions.

In a nutshell, the current proposal provides imbalanced incentives for member states to tackle building renovation where it can be the solution to much more acute problems (pollution/energy dependency/energy poverty etc).

Richest countries take lion's share of emissions cuts under EU plan

The EU on Wednesday (20 July) unveiled national targets for cutting greenhouse gases by 2030, placing the burden on richer northern countries including exit-bound Britain to help meet the bloc’s UN goal.

Now you could argue that the setting of national binding targets is in itself an important governing tool to keep the EU in line with its 2030 climate journey.

But when you know that cost-effective energy savings are the dominant abatement option and choosing that pathway would have brought not only more savings but also enormous co-benefits both from a micro and macroeconomic perspective – the ESR appears to be a missed opportunity.

The multiple benefits of building renovation would bring health, wellbeing, comfort to consumers, tackle energy poverty affecting about 10 million people in the EU, increase air quality, lower energy bills but also reduce energy dependence, all while creating jobs in the construction sector (which is made up of 90% SMEs) and even bring new opportunities for SMEs to upgrade facilities and reshape skills, and for industry as a whole.

Third, instead of enhancing annual monitoring, reporting and compliance rules, the proposal actually allows for enhanced flexibilities to address cost-effectiveness by offering member states the possibility to bank and borrow allowances, and loosening the reporting/compliance measures so the more formal compliance check will be organised every five years, rather than annually.

What is also striking is that the Commission omits entirely the previous Article 4 on energy efficiency where the Commission assesses and reports on the progress on energy efficiency towards the 2030 targets and where appropriate, proposes strengthened or new measures to accelerate energy efficiency improvements.

Member states offered EU climate target flexibility in bid to cut emissions

EU member states will be able to bank annual emissions savings from sectors such as agriculture and transport, and use them in later years to meet their climate targets, under EU legislation set to be put forward on Wednesday (20 July).

Whether some of the deletions are shifted into the Energy Union Governance piece due later this year and/or whether the energy efficiency targets will be revised to stay on course with our COP21 commitment –  can only be fully appraised once the proposals  are published.

In the meantime, the revision of the Energy Performance of Buildings Directive (EPBD) is a landmark opportunity to commit to the renovation of buildings to nZEB (nearly zero energy) level by2050.

If the EU is serious about upscaling the energy renovation of our inefficient buildings, we need EU political will, vision and leadership and 2016 is the year for Europe to walk the renovation walk.

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