European Parliament discusses binding EU energy-saving target

As also with the current directive (EED), future increases in energy efficiency will be linked to EU limits on primary and end energy consumption. It has hitherto been sufficient for EU Member States to reach collectively the EU-thresholds in the field of primary or end energy According to the new Commission’s proposal they would need to respect the EU consumption limits in both areas. What is also new is that EU countries should in future decide for themselves to what extent they would like to invest in energy efficiency or in the development of renewable energies – provided that the EU as a whole reaches its targets for 2030 in both areas. In addition, Member States should set out their objectives and strategies in national energy and climate plans and hence provide greater predictability and transparency.  

Whereas the Council would like to accept the 30 percent increase in energy efficiency only as an indicative target, binding EU-wide requirements of up to 40 percent together with binding objectives for the national level are being discussed in the European Parliament. However, there are not yet any signs of a cross-party approach in the Parliament.  

Energy-saving obligation remains in existence also after 2021

There are also sharp differences regarding the question of the level and structure of the energy-saving obligation for energy distributors. The obligation for energy providers to achieve efficiency improvements among their final customers has not been fundamentally brought into question in either the Council or the Parliament as long as EU countries are allowed to achieve efficiency increases through alternative measures. These could consist in support programmes for companies or for the buildings sector, for instance.  

Since many EU countries would like to see the 1.5 percent annual saving requirement attenuated, the Council agreed in June to decrease the saving obligation to 1 percent annually for the period 2026-2030, unless the mid-term review in 2024 concludes that the EU is not on track to meet its targets. EU countries have so far been able to exclude from the saving obligation energy use in the transport sector and to some extent also in industrial installations which fall under EU emission trading. Member States do not want this flexibility to be taken away in the future, especially since it enables double regulation to be avoided. Rather, they would like their discretion to be widened through the possibility of crediting savings from the current decade to the subsequent period or of deducting part of the renewable energies generated in or on buildings from the energy volume to be saved.  

European Parliament still divided: ambition versus flexibility  

By contrast, several Members of the European Parliament are calling for the energy-saving obligation for energy providers to be increased and for the flexibility mechanisms described above to be phased out after 2021. Here too, nothing has yet been decided across the political groups. In these discussions, the fundamental questions are always about ambition and control versus flexibility, and energy efficiency versus fixed saving limits.  

German industry in third position for energy efficiency

Long-term efforts in reducing energy intensity in the industry sector in Germany have proved their worth. The most recent report of the Cologne Institute for Economic Research (available in German) shows German industry in third position for energy efficiency matters in a comparison between 23 industrialised countries – with Germany having a markedly higher industrial share than both frontrunners, Denmark and Great Britain. However, there is no question that many areas still have great potential to increase their energy efficiency, e.g. the buildings sector. These sectors should be addressed in a targeted way and given political flanking – otherwise there is no point in thinking about a higher energy efficiency objective.   

The European Parliament’s Industry and Energy Committee will vote on the energy efficiency directive on 28 November 2017; the vote in plenary is expected to follow in January 2018.