EU asks member states to improve energy savings by nearly a third

The European Commission has called on member states to make energy savings of 30 per cent by 2030, giving a signal to the market to encourage further investments in energy-saving technologies and reduce dependence on imported fuel.

Announcing the target Günther Oettinger, EU commissioner for energy said, “Our proposal is the basis to drive the EU towards increased security of supply, innovation and sustainability, all in an affordable way.”

According to Commission sources, the 30 per cent target, a source of intense political jockeying between governments, industry and green lobbies in the last few months, was only set at the last minute – so late that the press conference to announce the proposal was delayed.

Amid speculation that the figure would be around 27 per cent, the views of the European Commission President-elect, Jean-Claude Juncker, appear to have been influential. In a speech to the European Parliament last week, he said, "A binding 30 per cent energy-efficiency target is for me the minimum." The 27 per cent figure was believed to be favoured by José Manuel Barroso, the incumbent Commission president.

Member states were sharply drawn on the figure. France, Germany and Denmark wanted an ambitious target. Ségolène Royal, the French energy minister, said this week

that the target should be at least 30 per cent. The UK and a number of other countries, including Poland and Hungary, were standing firm against a bigger target.

Oettinger defended the final proposal. “There are lots of member states who say, others can do more, but I can’t do it,” he said. “Thirty per cent is ambitious.”

The announcement comes at a time when Europe is trying to wean itself off Russian gas. Currently, the EU spends more than €400 billion a year on imports of fossil fuels, a large chunk of which come from Russia through gas pipelines. The Commission has calculated that for every 1 per cent in energy savings, EU gas imports could be expected to fall by 2.6 per cent. In total, the EU imports 54 per cent of its energy.

Climate Commissioner Connie Hedegaard said the decision is good news for reducing carbon emissions and, "Not such good news for [Russian President Vladimir] Putin."

Products and buildings are progressively becoming more energy-efficient. According to the Commission’s research, the average fuel efficiency of cars has increased by two litres since 1995, while new or renovated homes require up to 50 per cent less energy to run than in the 1980s.

Impact and reaction

The 30 per cent target should be seen in the context that the EU is unlikely to meet its earlier target of improving energy efficiency by 20 per cent by 2020, managing an 18 to 19 per cent improvement instead.

Meeting the 30 per cent target is likely to require major investment, particularly in buildings, but also in new energy-saving technologies like smart meters, Oettinger said. To offset upfront costs, proponents of the target are banking on lower household energy bills and more jobs in construction.

Large segments of industry are wary of binding targets. Earlier this year, some of Europe’s biggest energy-intensive manufacturers called for restraint. “I bought a house recently and insulated the windows and walls. I probably improved [its efficiency] by 50 per cent. In my industry, on the other hand, I’m happy to receive a one per cent improvement,” said Oliver Bell, president of Eurometaux, the European association for the non-ferrous metal industry.

Many green advocates felt the deal lacked teeth and wanted a 40 per cent target. The Coalition for Energy Savings said, “The weak 30 per cent figure cannot drive policies and investments further and disregards the higher benefits of attaining Europe’s 40 per cent cost-effective potential. The Commission dropped the ball, it is now up to member states, the European Parliament and the new Commission to pick it up.”

Sections of the construction industry too, would like to see a higher target. EuroACE, the European Alliance for Energy Efficiency in Building, said a 40 per cent target would create many more jobs in the building and insulation sectors. “Such a weak figure for energy efficiency is inconsistent with what the market is asking, what citizens are asking, what member states are asking and even what evidence-based research is saying,” said Adrian Joyce, Secretary General of EuroACE.

The political steps

In January, after long negotiations, the EU published outline proposals on its targets for 2030.

Among them was a 40 per cent cut in carbon, while renewables would make up 27 per cent of energy consumed. Energy efficiency was to be increased by 27 per cent.

But pressure mounted from countries like Germany, leading the Commission to examine a range of higher efficiency targets up to 40 per cent.

The ongoing Ukraine-Russia stand-off has pushed energy savings up the political agenda. A tough target, many believed, would help the continent limit its dependence on Russian energy imports.

The Commission's proposals will go forward to the heads of government meeting in October which will have the final say on the 2030 goals.