Almut Bonhage

A new era for energy effciency policies is about to start. On the 10^th of March 2023, EU law-makers achieved a deal for the recast of the Energy Efficiency Directive (EED).

The 2030 energy efficiency target has become more ambitious, responding to soaring energy costs and to the war in Europe. But it still falls short of what would make sense from a climate protection and responsible investor perspective.

But most importantly, the EU’s 2030 target has become more focused and comes with a credible governance to reassure investors, businesses and citizens that it is much more serious this time around. Member States have new obligations vis-à-vis the EU target and to put in place energy efficiency measures that will be checked against delivery.

Implementation will have to be very fast to catch up with the cycle of National Energy and Climate Plans. It will require timely delivery by the Commission to work with the new benchmarks and to correct national contributions.

Not all countries are happy with the benchmarks set in the new EED for their national contributions. Those who think they did more in the past than others tend to feel disadvantaged. That was the case with the first EED, the 2018 revision and now again.

With a bit of distance, we hope that the perspective becomes clearer, that national energy saving efforts are not an altruism, but are bottom line services to lower costs for citizens and business and shield national interests from fossil fuel wars.

In a nutshell

• The new EED has increased the 2030 energy efficiency ambition: the EU targets are set at 763 Mtoe final energy consumption and 992,5 Mtoe primary energy consumption, which is 11.7% below the Reference Scenario 2020. However, this remains still well below the cost-effective potential which kept increasing with higher energy prices.
• The governance of the 2030 target for final energy consumption has been significantly strengthened. The binding character of the EU level target is manifested by legal obligations on the European Commission and Member States.
• The EED comes now with a new gap-avoider tool: the Commission has to ensure that national contributions leave no gap to the EU target. In case of low ambition, Member States have to accept and apply a corrected contribution handed over by the Commission. A last-minute addition to the baseline used for the assessment of national contributions causes uncertainties about the functioning of the governance tools. But in our understanding, the impact will be limited.
• Furthermore, a new gap-filler tool is added: the adequacy of national energy efficiency measures will be checked against delivery. Member States have to set an indicative trajectory. If a Member State is above the trajectory, it will be obliged to put in place additional energy efficiency measures.
• The EU’s target for primary energy demand is only indicative and the governance tools do not apply to it. It weakens energy efficiency policies targeting the whole energy system, including generation, storage and transmission.

Stefan Scheuer, The new EU Energy Efficiency Directive – getting stronger. A high-level assessment of the target and its governance. March 2023

Consolidated text of the new Energy Efficiency Directive. 24 March 2023

The German government is about to propose an ambitious energy efficiency law.

Environmental and business groups have been calling for a legal framework on energy efficiency for many years. Chancellor Scholz decided that it was about time and ordered his government to deliver.

Our briefing provides an overview of what is in the draft law which is currently prepared by the ministry in charge of energy and puts it into the context of the ongoing recast of the EU Energy Efficiency Directive.

Stefan Scheuer, Briefing on the German Energy Efficiency Law, 22nd November 2022

DENEFF, Press release and position on the Energy Efficiency Law, 23rd November 2022

Latest research shows that the EU’s economic energy savings potentials are growing as energy prices increase. The European Commission has proposed a 9% energy savings target for 2030 in the Fit for 55 Package, but the economic potential could reach up to 23% in case whole-sale energy prices are double in 2030 compared to the EU’s estimate before Russia invaded Ukraine earlier this year.

Niels Fuglsang, MEP: ‘The EU Parliament has paid close attention to the economic potentials in the past. These new findings show that we need to work hard with Member States to acknowledge the growing importance of energy savings.’

Prof. Dr. Wolfgang Eichhammer, Fraunhofer ISI: ‘The assessment of economic potentials is an important tool to support the setting of energy saving targets, which are feasible and maximise benefits for citizens. The new energy price outlook for the EU drives up the potentials significantly.’

Stefan Scheuer, Director, Stefan Scheuer Consulting: ‘The EU can and must increase its energy saving ambition. It will keep our energy bills in check and accelerate the phase out of Russian oil and gas.’

Mirella Vitale, Senior Vice President, ROCKWOOL Group: ‘Tapping into the EU’s cost-effective energy savings potential is essential to protect households and businesses from runaway energy bills. But we need to act now. We’ve been having the same debate for 10 years – we cannot afford to delay actions to the next decade.’

Christian Noll, Managing Director, DENEFF: ‘It will cost many billion Euro to not increase political efforts on energy efficiency! In the face of an energy price and security crisis, we expect the German government and other European leaders to push for more ambition in the EU council negotiations.’

Wolfgang EICHHAMMER, Stefan SCHEUER: Assessing the impact of high energy prices on the economic potentials for energy savings in the EU, April 2021.

With the support of

• Deutsche Unternehmensinitiative Energieeffizienz e.V. (DENEFF), Berlin, and
• ROCKWOOL Group

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Publication on Fraunhofer ISI website