EU Energy Efficiency Directive Approved by Parliament

On Tuesday the European Parliament adopted in first reading a new Energy Efficiency Directive, which shall help to reach the Union’s 2020 target of increasing energy efficiency by 20% compared to 1990 levels. To this end the Directive provides for energy-saving measures, including the renovation of public buildings, energy-saving schemes for utilities, and energy audits for all large firms.

The directive, which had been discussed controversially for months, establishes a common framework for energy-efficiency measures. EU Member States have to set themselves national energy efficiency targets. By June 2014, the Commission will assess the progress achieved to date.

Energy-efficiency measures covered by the directive include

  • A renovation target for public buildings covered by the directive of 3% or alternative means to achieve equivalent energy savings
  • A long-term strategy for national building stocks
  • An energy savings target for utilities with certain exemptions (see below)
  • Provisions on public procurement
  • Energy audits for large enterprises
  • Provisions on smart metering and individual consumption meters in multi-apartment buildings
  • Provisions on billing and consumer information
  • A comprehensive assessment” of the scope for applying high-efficiency cogeneration and efficient district heating and cooling
  • Provisions on the risk of carbon leakage and the Emissions Trading System

According to the directive, energy companies covered will have to achieve a cumulative end-use energy savings target by 2020. This target has to be at least equivalent to achieving new savings, each year, from 2014 to 2020, of 1.5% of annual energy sales to final customers, by volume, and averaged over the most recent three-year period before the directive takes effect. Sales of energy used in transport can be excluded and alternative ways to achieve equivalent energy savings will be permitted, provided that equivalence is maintained. 

Member States can choose to exclude from the target calculation energy used in industrial activities that are covered by the ETS emission trading scheme (e.g. mineral, steel iron industry), or count towards this target savings resulting from “early” energy-saving actions (those implemented since December 2008 which still have an impact in 2020). The sum of these “flexibility” measures shall account for no more than 25% of the total national energy savings target. The provision on energy efficiency exemption schemes will be reviewed by the Commission in 2016.

Hans-Joachim Reck, head of the Association of German Municipal Enterprises (VKU), called the 1.5% energy savings target per final customer ambitious and asked the Federal Ministry of Economics and Technology, which is responsible for drafting the legislation transposing the Directive, to make use of the above-mentioned flexibility measures.

The directive will repeal Directives 2004/8/EC and 2006/32/EC. It will enter into force 20 days after its publication in the EU’s Official Journal. Member states will have 18 months to transpose it into their national laws.

Source: European Parliament; VKU

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