The Draft Energy Efficiency Directive: a missed opportunity?

Making the most of the few calm moments that can be enjoyed in the European quarter in the month of August, we will reflect today on what will be a significant item in the European Council and the European Parliament’s agendas in September. We’re thinking about the Energy Efficiency Directive or EED, because nothing remains without an acronym very long in Brussels.

The European Commission published its draft proposal on 22 June 2011, settling speculations over what the acronym would be, but most importantly allowing a first glance at how the Commission’s initial plans in the Energy Efficiency Plan 2011 had been enacted, if at all.

The EED will repeal the Cogeneration directive (2004/8/EC) and the Energy Services directive (2006/32/EC) and puts a strong emphasis on buildings. Admittedly, the directive was aimed at putting member states back on track to meet their 20% energy savings objectives for 2020 – Europe is only on its way to meet half of the indicative objectives set by the Europe 2020 strategy. However, reading the Commission’s proposal, one can be sceptical as to the impact it will have.

Binding measures, not (yet) binding targets – Unsurprisingly, the European Commission did not include binding targets for energy savings; Member States were indeed vehemently against it. The approach favoured by the European Commission is therefore to propose binding measures to compel member states to take concrete steps in favour of energy savings. For detailed analyses of all the provisions in the directive, we encourage you to have a look at the ECEEE’s dedicated webpage, but we will focus here on the two “landmark” proposals made by the European Commission:

  • The energy savings obligation, which would compel member states to adopt schemes in order for energy companies to save 1.5% every year of their energy sales, via energy efficiency measures.
  • The requirement for public authorities to refurbish 3% of their building stock (buildings with a useful floor area of =/+ 250 m²) per year, to minimum energy performance requirements.

A lukewarm proposal – The Commission’s proposal is hardly what one would call a “watershed” piece of legislation, and to emulate the metaphor, the proposal was clearly watered-down between the publication of the energy efficiency plan and the several rounds of discussions in the European Council in May and June. For example the EEP published on 8 March 2011, already envisaged a compulsory 3% yearly refurbishment rate for public authorities but it did not mention any useful floor area and the standard was not “minimum energy performance requirement” but to the level of the best  10% of the entire national building stock. Last but not least, the Commission’s proposal on public authorities would not come into play before 1 January 2014.

And as for the energy companies savings obligation, the scheme has always been slightly overrated because 1.5% savings per year is essentially a “business as usual” scenario.  In its yearly Energy Outlook, Exxon Mobil made the point that the world has improved its energy efficiency by 1.2% per year since the 1980’s and expects this figure to rise to 1.5%; therefore the 1.5% obligation is only a matter of implementing the status quo, a difficult job indeed…

It should also be mentioned that member states are free not to implement the energy savings obligation as long as they reach the 1.5% saving by other means. As said in this post by Eoin Lees, energy savings obligations have been successfully implemented in several EU member states such as the UK, Italy, France, Denmark, and in the Belgian region of Flanders; hopefully other member states will follow suit.

Between member state pressure and internal disputes: a besieged European Commission - It is true that the European Commission was in a delicate position, with member states wary of seeing any legislation with potential budgetary implications coming from Brussels, in a time of austerity and debt crisis. And member states did try to strip the Commission’s proposal from its substance, as evidenced by the Council conclusions on the EEP, which left the Plan only as the shadow of itself.

However what is more difficult to understand is that the European Commission weakened its very own proposal because of internal discrepancies, a week only before the proposal was adopted. Brook Riley (Friends of the Earth Europe) and Erica Hope (Climate Action Network) documented the feud between DG ENERGY and DG CLIMA in a guest blog for Blogactiv.

Fertile ground for a passionate legislative battle? - Despite its weaknesses and as some of the people we talked to rightly pointed, the European Commission managed to keep binding measures, weak though they are, within the legislation. It could prove fertile ground for the Parliament to push for a more ambitious EED, though certainly at the expense of an intense stronghold with the European Council.

We’re just reading from a crystal ball here, but Poland will be carrying the dossier forward until January 2012 and is notoriously lukewarm about an ambitious energy efficiency agenda; on the other hand, Claude Turmes (Green/Luxembourg) will lead as rapporteur for the European Parliament along with the influential Fiona Hall (Liberal Democrat/UK) who will be one the shadow rapporteurs. Both Turmes and Hall are strong proponents of an ambitious energy efficiency agenda; therefore one can expect some intense negotiations between Europe’s two legislative institutions.

Keep following us if you are interested in developments on the energy efficiency directive, we will cover the matter quite frequently in the coming months as it will be one of the “hot topics” in Brussels. We will also start a European tour of energy efficiency legislation shortly, to broaden the debate outside the Brussels bubble. As usual, your thoughts and comments are very welcome!

The Polyurethanes Team

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