Heads of government at the European Council on energy, meeting on 4 February, failed to agree on upgrading the bloc’s 20% energy efficiency improvement target for 2020 to a mandatory requirement.
The voluntary target, set relative to business-as-usual projections, is a key part of the EU’s 20/20/20 energy and climate package of 2008 (ENDS Report, January 2009).
The decision had been widely predicted amid concerns the measure would amount to regulatory gold-plating. However, it is significant in that the European Commission, in its updated Energy Strategy 2020 communication in November 2010 identified the issue as a high priority for action (ENDS Report, November 2010).
An accompanying staff document, while also failing to recommend making the target mandatory, revealed that states’ efforts would fall well short, achieving as little as 9% by 2020, “leaving vast potential untapped”.
The six-page document recognised that the energy efficiency target is not on track, yet must be delivered. It says that all member states should apply energy efficiency standards in their procurement programmes for public buildings and services from 1 January 2012.
It invited the council to “promptly examine” the commission’s upcoming proposal for an energy efficiency plan, aimed at addressing policy failure by setting out detailed measures across the full energy supply chain.
Interconnected energy markets
Leaders also stressed the need for completing an interconnected internal energy market by 2014, the first step towards an eventual European ‘supergrid’ (ENDS Report, September 2010). They invited standardisation bodies and industry to accelerate their work, enabling technical standards for electric vehicle charging, smart grids and meters by the end of 2012.
The document points out that most of the costs of infrastructure investments will need to be market-driven through tariffs. But it says some strategic projects “that would be justified from a security of supply/solidarity perspective” may need limited public funding to lever more finance from the market. It says these should be selected based on transparent criteria, and invited the commission to report on the measures and sums needed by June 2011.
But ENDS understands the UK is opposed to large amounts of public funding for these projects.
The document also calls on the commission to strengthen implementation of the Renewable Energy Directive by member states, focusing on delivering more consistency among national schemes and greater cooperation. The comments follow deep concern among investors over seemingly retrospective cuts in renewable energy support in some member states such as Spain.
It says the EU and member states are to promote investment in renewable and safe and sustainable low-carbon technologies, based on implementing the priorities highlighted in its European strategic energy technology plan (ENDS Report, October 2009). It calls on the commission to table new initiatives covering smart grids, particularly relating to clean vehicles, energy storage, sustainable biofuels and energy saving in cities.
Sustainable fossil fuel extraction
Controversially, the document also calls for an assessment of “Europe’s potential for sustainable extraction and use of conventional and unconventional (shale gas and oil shale) fossil fuel resources”, both tending to be of high carbon intensity and environmental impact (ENDS Report, January 2011), to enhance security of supply.
The Canadian oil shale issue is particularly sensitive, because as a more carbon-intensive unconventional oil source, it could be subject to import duty under the Fuel Quality Directive. This requires that life-cycle carbon emissions of fuel fall by at least 6% by 2020 relative to 2010. The proposed EU-Canada Comprehensive Economic Trade Agreement (CETA) includes a dispute settlement clause for investors, permitting corporations to sue governments in the event EU climate change policies affect Canadian fuel exports.
On energy diplomacy, the summit proposed that member states ensure the commission is informed of all bilateral energy agreements with third countries by 2012, and that information sharing be enabled. The move aims to ensure a more joined-up approach to foreign policy, avoiding the ineffectual image the bloc projected at the Copenhagen climate summit in December 2009.
The summit welcomed the commission’s forthcoming Low Carbon 2050 Strategy (ENDS Report, September 2010), adding that progress should be regularly reviewed, and milestones considered.
Green groups have been scathing over the EU’s lack of action on energy efficiency. European pressure group Bankwatch pointed out that at least a third of cohesion and structural funds need to be earmarked for energy efficiency in buildings to meet the 20% target – a move by no means on the cards as yet.
Amanda Afifi, secretary general of the European Alliance of Companies for Energy Efficiency in Buildings, welcomed the focus on energy efficiency, but stressed “their proposal adds next to nothing to existing commitments”. She added that a major retrofitting programme for all buildings across the EU “would bring huge energy savings, and would kick-start our economies, generating millions of new jobs”.