EU loses nerve to tackle climate change, fuel poverty & slashes 2030 energy efficiency goal

Energy efficiency – you know it makes sense, right?

While paying lip service to the Paris Agreement, the European Union has let a minority of countries slash its energy efficiency targets by 90 per cent on the grounds that even modest targets are too expensive. The EU’s commitment to tackling climate change and fuel poverty is now seriously in doubt.

A version of this article was first published in The Fifth Estate on 5 July.

At a meeting of the Energy Council of EU energy ministers on 26 June, where several energy efficiency policies were discussed, agreement on the energy saving target from 2020 to 2030 was hard to achieve, and reaching consensus came at great cost to the level of ambition.

The new target

Currently the energy saving target is a non-binding one of 20 per cent by 2020, compared to baseline projections. A legally binding target of achieving 30 per cent energy use reduction by 2030 had been on the table.

Originally the European Parliament was calling for a 40 per cent target because the EU is already on track to achieve 24 per cent savings by 2030, and deeper savings are easily available and cost-effective. Earlier this year there was wide expectation that the final compromise might be between 30 per cent and 40 per cent.

But at the meeting, some countries demanded that the target should be only voluntary – and other countries demanded that it should be as low as 27 per cent.

In the end a non-binding 30 per cent target was agreed.

This compromise means the new target is less ambitious than the current 20 per cent by 2020 target. Currently countries would have to save 1.5 per cent energy a year. A 30 per cent target by 2030 decreases it to just one per cent between 2026 and 2030, assuming all countries co-operate.

Further loopholes were also added, specifically permitting:

• the double counting of energy savings from new buildings standards/codes – even though those are already covered by the Energy Performance in Buildings Directive
• double counting in the period 2021-2030 savings from energy efficiency measures installed before 2021 with lifetimes longer than 23 years – as if they were new savings
• 15 per cent of on-site renewable energy generation to be treated as energy savings
• excess savings from the current Article 7 (Energy Efficiency Obligation) period 2014-2020 towards the minimum savings 2021-2030

Observers Jan Rosenow and Richard Cowart calculate that together this will reduce the actual energy savings mandate in the EED from an effective level of 443 million tonnes of oil equivalent (Mtoe) a year to just 52 Mtoe – a reduction of almost 90 per cent.

Rogues and heroes

The rogue countries that argued for this result were the UK, which allied itself with eastern states Poland, Bulgaria, Hungary, Slovenia, Slovakia and Romania. The WWF said these countries “could not even support the final weak deal”.

The British negotiator was Conservative MP Richard Harrington. Where other countries sent their secretaries of state for energy, Britain sent an under-secretary from the business, energy and industrial strategy department, who had only been appointed a week earlier.

Richard Harrington

The heroes of the day were France, Germany, Luxembourg, Sweden and Ireland, who were congratulated by Greens MEP Claude Turmes for fighting hard for a strong deal. He said afterwards that he would use his place on the European Parliament’s Industry Committee to “raise the ambition” of the targets.

EU Energy and Climate Commissioner Miguel Arias Cañete commented that finding agreement on the Energy Efficiency Directive was “not easy” and that as a result it fell “below the ambition of the Commission”.

Miguel Arias Cañete

Others were equally disappointed. Clémence Hutin, climate justice and energy campaigner at Friends of the Earth Europe, said: “These negotiations should have been about ramping up the EU’s climate efforts for 2030, instead we are risking a decade of inaction. EU governments have expressed deep regret at Donald Trump’s withdrawal from the Paris Agreement, yet they are turning their backs on the main tool for cutting emissions – energy efficiency.”

Benedek Jávor, Greens/EFA MEP said: “There is an engaged energy efficiency community that stands ready to raise ambition levels and invest massively in the energy transition. They just need the right signals from policymakers. To fully unlock this potential, all member states need to give their support. Where some countries lag behind, there is a real risk of higher energy costs and serious competition gaps.”

The European Parliament’s own Impact Assessment had shown that higher levels of ambition would deliver significantly greater benefits, as revealed in the table below.

Level of energy savings:	30 per cent	33 per cent	35 per cent	40 per cent
Reduction in gas imports	12 per cent	23 per cent	29 per cent	41 per cent
GDP increase in 2030	0.39 per cent	1.45 per cent	2.08 per cent	4.08 per cent
Additional jobs	396,950	1,587,800	2,428,400	4,856,800
Savings in fossil fuel import bills (bn) for 2021-2030	69.6	147.3	199.3	287.5
Reduction in pollution control and health damage costs (bn/year )	4.5-8.3	15.2-28.4	19.9-36.6	30.4-55.9
Total GHG emissions reductions ( per cent to 1990)	41 per cent	43 per cent	44 per cent	47 per cent

These are consistent with figures from the De-Risking Energy Efficiency Platform (DEEP) database, which contains close to 6000 individual energy efficiency projects across the member states of the EU. Overall, it shows the cost per kilowatt-hour saved in buildings is 2.5 eurocents and in the industry sector 1.2 eurocents.

Fuel poverty is an issue in all member states. It affects tens of millions of Europeans (between 50 million and 125 million depending on how you measure it). Of the main causes – low income, high energy costs and poor insulation of European dwellings – the directive could do much to affect the latter two.

The Energy Union strategy and the Paris Agreement

The Energy Efficiency Directive forms part of the EU’s Energy Union Strategy.

The general aim of the Energy Union strategy is to move towards the decarbonisation of the EU economy by 2030 and beyond, while strengthening economic growth, consumer protection, innovation and competitiveness. The Commission proposal on energy efficiency updates the current Energy Efficiency Directive 2012/27/EU and was presented in November 2016.

Buildings are the largest single energy consumer in Europe, consuming 40 per cent of final energy.

Even before this meeting, the EU was not on a trajectory to meet its self-assigned 2030 greenhouse gas emissions reduction target of “at least” 40 per cent by 2030 below 1990 levels under the Paris Agreement.

According to Climate Action Tracker – which monitors individual countries’ plans to achieve the global aims of the Paris Agreement of limiting warming to 1.5°C – the EU’s domestic emissions are projected to be cut by only 30-39 per cent.

The EU’s target is, anyway, not consistent with limiting warming to below 2°C, let alone with the Paris Agreement’s stronger 1.5°C limit, says Climate Action Tracker. Extrapolating the current trend to 2050 would give an emissions reduction of 64 per cent below 1990. The EU’s goal is 80-95 per cent.

Looking at energy savings alone, by totalling the amount of savings reported by member states in 2014 and 2015, the total savings target is currently on track to be less than zero.

Factoring in the new, seriously unambitious targets under the Energy Efficiency Directive would make achieving Europe’s goal under the Paris Agreement much harder and more expensive to achieve.

The extra expense comes because it is cheaper to take action now than in the future, and because it is generally cheaper to install measures to save energy than to build new generation plant.

The European Union is now seriously lacking credibility in its position on tackling climate change. What is always puzzling is why energy efficiency – which has been shown innumerable times to have multiple benefits and mostly be more cost-effective than building more generation capacity – has so few friends.

Perhaps we should stop energy ministers deciding such matters and let those unswayable by lobbying from energy suppliers do so instead.

David Thorpe is the author of a number of books on energy efficiency, building refurbishment and renewable energy. See his website here.

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