Will Member States aim for a gold in energy savings?

On the evening of 13 June, after months of difficult political negotiations, an agreement was achieved in Brussels on the Energy Efficiency Directive (EED). “We fought like lions”, said Martin Lidegaard, the Danish Minster of Climate and Energy who was largely responsible for getting the legislation passed.

The obscure sounding law is important because it holds the key to huge financial and energy savings across the EU – €200bn per year by 2020 according to the European Commission’s own calculations. In this Olympics year, those involved completed their leg of the race in a state of exhaustion. They passed the baton on to the 27 member states of the EU who must now make it towards the finish line with an added sense of determination to ensure that benefits of the law are passed on to the citizens and businesses of Europe.

In 2007, the European Union set itself a target of achieving 20% energy savings –in buildings, industry and transport – by the year 2020. There was a belief at the time that this would be achieved with relative ease. Being largely cost-effective and bringing an array of benefits to both the consumer and the economy, it was simply assumed that a binding target was not necessary. Why would consumers, businesses and governments hesitate to implement measures that cut energy costs, create thousands of jobs, and reduce the dependency on energy imports? As a result the target was not made binding. There were those arguing at the time that this was a mistake. It turns out that they were right. Because of the short-sighted nature of politics and policy making, the EU is currently way off course to meet its goal.

Two other targets were set at the same time. Unlike the energy savings these were binding targets. The first, for emissions reductions, was a goal to reduce greenhouse gas emissions 20% below 1990 levels by 2020. The second on renewable energy, was a decision that 20% of all Europe’s energy needs must come from renewable sources by 2020. Together these three targets would put the EU on the path to achieving a low carbon economy.

But it became clear that without targeted efforts the EU was likely to achieve only half of its energy savings target by 2020. The European Commission therefore proposed legislation to get the EU back on track to achieving the goal. The EED was the outcome of this legislative effort.

So, now that the Directive has been passed, what needs to happen to unlock the savings that we know exist? The answer to this can be summed up in three clear ways.

First the European Commission must provide Member Sates with a solid implementation framework to ensure consistent interpretation and transposition of the EED into national law. This guidance must include rules for calculating energy savings and comprehensive templates for the National Energy Efficiency Action Plans. These are plans in which Member States outline how they will implement the Directive. In other words, it is about providing a framework for turning a legal document into national strategies and measures for saving energy.

For their part Member States must implement the energy saving measures set out in the EED. They must for instance renovate 3% of central government buildings each year to minimum energy performance standards, thereby reducing those buildings’ energy use and saving taxpayers money. They must also introduce an obligation for energy providers to save their customers energy (1.5% of their previous year’s energy sales every year). This creates an incentive for energy companies to identify and implement energy saving measures with their customers, whether that be through more efficient appliances, better insulation, or more informed usage of energy. Doing so will increase the overall efficiency of the energy system and cut energy costs for households and businesses.

Last but not least the European Commission must monitor the implementation of the EED by Member States and assess whether the EU is on track to achieve its 20% energy saving target as a result of the measures implemented and plans adopted. If not, it must propose additional measures to ensure the 20% target will be met.

If properly implemented, the positive effect of this important law will soon begin to be felt across the EU.

But we cannot be complacent. The current EED is still not strong enough. When added together, the measures outlined in the new directive will only achieve 15% of the required 20% savings by 2020. To deliver on the 20% target and its many benefits, it is in Member States interest to be ambitious when implementing the Directive and outperform the minimum requirements it sets out. If they don’t do this they risk having, binding targets ore measures imposed on them by the Commission.

In this Olympics year, let’s ensure that Member States aim for a gold in energy savings.