EU countries reach tentative deal on landmark energy savings law

The EU’s 27 energy ministers will aim to formalise a tentative deal on the bloc’s energy efficiency directive at their meeting on Monday (27 June), opening the door to the first-ever legally binding target to increase energy savings in Europe.

Ministers will meet in Luxembourg on Monday and Tuesday (27-28 June) to finalise as much of the EU’s climate package as possible, including laws on renewable energy, energy efficiency, carbon pricing and land use and forestry.

At a meeting on Wednesday (22 June), national representatives made significant progress towards an agreement on the energy efficiency directive, which is hoped to be formally adopted by EU energy ministers on Monday, although this is not certain.

“There is still a discussion ongoing on the headline targets for EU energy efficiency. And unfortunately, it’s a bit hard to predict how the discussion will go tomorrow and what at the end will be on the table,” said an EU diplomat.

Tentative deal The energy efficiency directive has seen improvements from the previous version, according to Brook Riley, head of EU Affairs at Rockwool, the insulation company.

This time round, it is set to include a binding target for increasing energy efficiency and a mechanism drawn up by the European Commission and the French presidency to ensure the EU stays on track to reach it.

“When you think about it, this is a big step forward compared to the last energy efficiency directive where you had an indicative target and no delivery mechanism at all,” Riley told EURACTIV.

While there will be a binding target, the exact figure will be decided during negotiations with the European Parliament. The only certainty is that it will not drop below the 9% originally proposed by the European Commission for the year 2030.

However, the tentative deal reached on Wednesday also contains some watered down elements.

First among them is that the target for primary energy consumption – how much energy goes into the energy production, conversion and transmission process before it reaches the end consumer – will be indicative, and therefore not legally binding on EU member states.

This means that only the target for final energy consumption – how much energy is consumed by the end consumer or application – will be retained as a legally binding objective for 2030.

“Dropping a binding primary energy target means that energy conversion losses are kind of off the balance sheet – they don’t count,” Riley explained.

“As you can imagine, this suits countries with nuclear, it reassures those with big plans for hydrogen, and it means others can expand coal as an energy security stopgap,” he added.

The proposal to drop the binding target for primary energy consumption was a last-minute addition that came from Spain, EURACTIV understands. It was later accepted by other EU countries, even though many had already agreed to the primary target – such as Austria, Croatia, Cyprus, Czechia, Denmark, Estonia, Germany, Italy, Luxembourg, the Netherlands, Portugal, Sweden, and Slovenia.

In the end, most national representatives jumped on the Spanish idea, with the exception of Luxembourg and the Netherlands.

Not having a binding target for primary energy consumption would benefit inefficient energy production methods like hydrogen, which entails considerable energy conversion losses. It would also make other energy sources like nuclear and coal power look more efficient than they actually are.

“Member states have agreed they need to promote efficient end-use of energy – that is a good thing, that means a strong focus on residential, industrial transport services,” Riley explained.

“But there’s no obligation to make the production process more efficient,” he added. “The danger is that, in this whole push to go into electrification, efficient resource use, efficient production of energy just doesn’t matter very much,” he warned.

There are also concerns that a separate target to renovate 3% of buildings occupied by public bodies every year has been watered down. Under the tentative deal reached on Wednesday, this requirement would exclude social housing and re-introduce a softer alternative approach to achieve this obligation.

“While past timid action on saving energy is one of the root causes of today’s energy security crisis, energy ministers are likely to repeat the same old mistake of not prioritising energy efficiency enough,” said Arianna Vitali, secretary general of the Coalition for Energy Savings, a multi-stakeholder platform bringing together civil society and industry groups.

“The European Parliament, on the contrary, is moving towards strengthening the Commission’s proposal on the Energy Efficiency Directive to cut fossil fuel imports, energy bills and emissions,” she added.

The coalition also outlined positive elements that strengthen the directive, including a mechanism to ensure that EU countries collectively meet their target for final energy consumption.

While the national contributions to the EU-wide target are not binding, the European Commission will use a formula to work out which countries have met their fair share.

If the collective contributions do not reach the EU level target, countries which did not propose a fair share will have to fill the gap.

By Kira Taylor

June, 27, 2022

Originally published by Euractiv