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Energy ministers will be discussing the revision of the Energy Efficiency Directive and the Renewable Energy Directive as part of the “Fit for 55 package” of legislative proposals prepared by the European Commission, during the Informal Energy Council on the 22nd of September 2021.
Ministers are expected to discuss how the two directives link with the Member States’ and EU’s climate and energy objectives, targets and contributions. To put the EU on track for fulfilling its commitment under the Paris Agreement to limit global temperature rise to 1.5°C, all pieces of legislation under the “Fit for 55 package”,including the Energy Efficiency Directive (EED) and the Renewable Energy Directive (RED), need to reflect the highest level of ambition and integrity, enabling the EU to overshoot the -55% net emission reductions target towards -65%.
For both the EED and the RED, the level of ambition should increase starting with the 2030 targets for energy efficiency and renewable energy. An EU energy efficiency target of at least 45% and an EU renewable energy target of at least 50% are better aligned with the Paris goal. The EU Commission proposes to make the EU energy efficiency target binding as it is already the case for the EU renewable energy target, which is a step in the right direction, but for both energy efficiency and renewable energy, national binding targets should be set to increase the accountability of Member States. Furthermore, strong measures are needed to deliver on those targets.
Everything at one glance: the Energy Efficiency Directive proposal
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The Commission’s recast proposal of the Energy Efficiency Directive makes the EU energy efficiency target binding, which has long been overdue and strengthens several aspects of the directive. It includes a higher and EU binding energy efficiency target that corresponds to a level of ambition of 36% for final and 39% for primary energy consumption for 2030. The current 2030 EU energy efficiency target is set at 32.5%. To help the EU get in line with the 1.5°C goal, the 2030 energy efficiency target should increase to at least 45%.
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The proposal does not include national binding targets, which can make the Member States accountable for reaching the overall EU target. However, it introduces a delivery mechanism in case there is insufficient progress to achieve the national contributions, which is an improvement to the current situation.
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The more comprehensive provisions for energy savings in the public sector include a new annual obligation to save energy in the public sector and a broader renovation scope covering buildings owned by public bodies, both of which can showcase the public sector as a frontrunner.
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A higher annual energy savings requirement for the Energy Savings Obligation from 2024 onwards coupled with the provision that excludes measures promoting the direct combustion of fossil fuels from being eligible under the obligation, are also a step into the right direction. To achieve more energy savings among final consumers, the level of ambition for the annual energy savings requirement needs to increase further than the proposed 1,5% from 2024 onwards The Energy Savings Obligation has been the most important tool in the Energy Efficiency Directive, delivering most of the energy savings.
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The updated heating and cooling provisions under the Energy Efficiency Directive are not in line with Europe’s efforts towards achieving climate neutrality and will not lead to a quick shift towards a truly efficient and fully renewables based energy system.
In short: the Renewable Energy Directive proposal
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The proposal to amend the Renewable Energy Directive increases the overall renewable energy share from at least 32% to at least 40% by 2030. However, as action in the next ten years will be decisive in reaching the 1.5°C objective, the revised RED should propose an EU binding renewable energy target of at least 50% by 2030.
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The RED revision proposed by the European Commission does not reintroduce binding national targets, which would provide certainty and push governments to bolder climate action.
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Furthermore, even though no fundamental changes are proposed on administrative procedures, the European Commission is supposed to review these procedures one year after the entry into force of the directive. The review should also look into ensuring that citizens and communities are engaged in the energy transition. With a cross-cutting approach, it also needs to be ensured that the increased use of renewable energy really mobilises synergies with biodiversity protection.
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The proposal also tries to incentivise system integration of renewable electricity. Despite some positive additions, there is a too narrow focus on the transport sector. A general approach to foster the direct use of renewable electricity in heating and cooling and in industry is missing.
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The proposed provisions for Renewable Fuels of Non-Biological Origin (renewable hydrogen and its derivatives) currently exclude fossil fuels (if the upcoming Delegated Act confirms this principle). However, provisions that already exist in the current RED and leave the door open to fossil based fuels (e.g. so-called ‘recycled carbon fuels’) have not been deleted.
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Finally, even though some changes are being proposed, the bioenergy criteria are not sufficiently strengthened.
Policy makers’ statements often highlight the benefits that come along with energy transition, through boosting energy savings and the deployment of renewable energy. Indeed, the reduction of energy consumption through the implementation of energy efficiency measures can lead to reduced greenhouse gas emissions, jobs creation, lower energy bills and improved health through air pollution reduction.Besides their greenhouse gas emissions abatement potential, sustainable renewables can help reduce health costs and environmental damages and increase local added value, by boosting tax income of municipalities and regions among others.
As the energy ministers start discussing the Fit for 55 legislative package and how to turn words into action, they must keep in mind that the revision of the Energy Efficiency Directive and the Renewable Energy Directive presents a unique opportunity for Europe to maximise those benefits and accelerate the urgently needed transition towards a sustainable, socially just and fair society.
