Danish approach to energy efficiency disappoints activists

Activists expressed disappointment at the EU Danish presidency’s version of the proposed Energy Efficiency Directive, which is likely to become the most important piece of legislation to date on the issue.

The proposed directive, which is to be negotiated between member states and the European Parliament, has no binding targets, no “meaningful review” in 2014 and easy opt-outs, independent groups working closely with the EU institutions on the bill have said.

Although the proposal takes the Polish presidency’s ambitions further by allowing less interference from the industry into the way targets are distributed among member states, it lacks a solid base for the tough negotiations to come.

The most important measure in the bill is the obligation scheme for energy companies to have 1.5% energy savings each year, calculated as a total at national level, industry and civic sources said.

In its proposal, the Danish presidency makes it clear that these savings should accumulate each year. That is an improvement over existing legislation, such as the Energy Service Directive (2006), which allowed member states to count savings as old as 10 years towards their annual targets.

However, Denmark has included an option for member states to count savings from the energy transformation sector towards their national 1.5% target. “This particular target was meant to trigger savings at the end use, not in the transformation sector,” said Erica Hope, of the Climate Action Network-Europe pressure group.

Consumers should be given the chance to save energy, whilst using as much as they need, through efficiency improvements in their homes, Hope said. "Barriers to energy saving in end-use sectors are diverse and need tailor-made solutions - which energy company obligations are flexible enough to provide."
Number crunching on targets and deadlines

The Danish presidency has introduced an overall target in the energy efficiency bill, which says that the measures should ensure the achievement of the European Union’s 2020 target of 20% energy efficiency and pave the way for further improvements after that date.

Another way to look at the ambitions of the Danish presidency with this bill is by placing in the broader picture of energy savings the EU is aiming for in the coming years. Denmark wants the European Commission to set a 2030 milestone for delivery of the reductions in the Low-Carbon Economy Roadmap to 2050.

The European Commission asked for a 2014 review of the Energy Efficiency Directive in its initial proposal, but Denmark  - as well as the former Polish presidency -has instead introduced a 2013 and a 2015 deadline, which would only assess whether the Union is on track to achieve its 2020 energy efficiency target, the paper reads.

This is far from the European Commission’s proposal to introduce a 2014 deadline, which would trigger mandatory national targets if the 2014 is not respected, Hope said.
Don’t mention the money

Another hiccup is that the Danish presidency has not included financing options in its version of the bill, as MEPs have urged.

The so-called “financing facilities”, which would see a pooling of different sources of funding at EU level and then their distribution at national level, have not made it in the text proposed by Denmark. EU officials have told EurActiv that it is unlikely such an idea “would see the light of day”, since the member states in the Council are reluctant to any binding numbers, be it targets and even more so money.

The industry association BusinessEurope recently said that even the target options currently being discussed in the Danish proposal would not be accepted because they hamper economic growth.

“Such an approach provides the wrong incentive to 'consume less' instead of 'being more efficient' and comprises serious risks. If the future brings stronger economic growth than projected, this cap would be difficult to achieve without a lowering of industrial activities within Europe, while it could become meaningless if Europe slides into a phase of economic depression,” BusinessEurope said in a statement.

Claude Turmes, who leads the European Parliament's work on the energy efficiency bill is, however, likely to use his target- and financing-packed proposal as a negotiation tool and seek to include as many binding measures as possible.

Industry group BusinessEurope asked for "genuine" energy efficiency targets: "Notwithstanding the choice for binding 20% CO2 and 20% renewable targets, EU heads of state in 2007 however decided to keep the 20% energy efficiency target non-binding. There were good reasons for this". It added : "This situation remains as valid today as it was in 2007."

Commenting on the economic growth potential of the Energy Efficiency Directive, Climate Action Network-Europe said : "According to the Commission's Impact Assessment accompanying the EED, Europe's GDP will be higher if the 20% savings target is met. This is besides the other benefits listed in the March 2011 energy efficiency plan such as, for example, 2 million new jobs and €1,000 annual savings on energy bills."

The European Association of local authorities Energy Cities said financing was "crucial" for the proposed measures to be delivered:

"Energy Cities calls on the European institutions and Member States to foresee a separate article on 'Financing and Technical support' including a wide range of possibilities for directing European funding to municipalities’ and regions’ energy efficiency projects."