The EU’s Energy Efficiency Directive (EED) was approved in European Parliament this month, a package of mandatory measures the EU claims could help cut energy consumption by 20% and save €50 billion a year.
It is hoped the directive, approved by a majority of 632 MEPs to 25, will help the EU hit its 2020 20% energy efficiency target. The seeds of the EED were sown at the March 2007 EU summit, when Member States agreed a 20% energy efficiency target by 2020, together with a 20% renewable energy target and a 20% CO2 reduction target. The latter two targets were binding and implemented immediately; the energy efficiency target – politically agreed but not yet legislated – is taking much longer to thrash out.
While the EED legislative odyssey is not complete – it has yet to be finally approved by the European Council – this stage is little more than a formality, and the text is not expected to change. Unfortunately, weaknesses in the EED will make it very difficult to achieve the ambitious 20% target. Other provisions – such as overhauling Europe’s public buildings to make them more energy efficient – also lack teeth.
Member States are required to make certain changes, among these: energy companies must make new savings equivalent to 1.5% of annual sales every year from 2014 to 2020; governments must renovate three per cent of their buildings each year; and businesses must undertake energy-use audits every four years.
The most important measure in the EED package is the 1.5% annual savings target for energy companies, which has the potential to create significant savings and encourage energy efficiency financing. However, these improvements alone are unlikely to achieve the 20% saving the Commission seeks. With no binding national energy saving targets and weak energy efficiency measures, the EU will struggle to cut the cost of energy imports, which stood at €488 billion in 2011, or 3.9% of GDP.
If the directive is wholeheartedly embraced by Member States it could bring major savings. Energy efficiency measures can also create jobs, and therefore offer a welcome boost to struggling European economies. However, implementation will be key. The EED is a good starting point, but until Member States finalise their National Energy Efficiency Action Plans and transpose the directive into national law, we can’t be sure how effective it will be.
UK citizens could look to Westminster for an indication of how serious their government is about saving energy. When Conservative MP Zac Goldsmith recently asked Energy and Climate Change Minister Gregory Barker what the UK had done to meet EU energy efficiency targets, he received this flaccid response: “The target to reduce primary energy consumption by 20% by 2020 relative to business as usual applies to the EU as a whole. The UK does not currently have a target to reduce primary energy consumption by 20% by 2020 relative to business as usual.”
Barker’s comments suggest the UK’s implementation might be less than ambitious; and if the ‘greenest government ever’ doesn’t fall in line, isn’t it optimistic to expect other Member States will?