IEA review of EU energy policies

The International Energy Agency has recently published its review of EU’s energy policies as part of its country review series. This follows the first review of EU policies it undertook in 2008.

The review states that at the time of the first review, “the European Union had embarked on two major reforms in energy and climate policy: first, the progressive liberalisation of the internal electricity and gas markets through the third internal energy market package, the so- called “Third Package”; and second, ambitious climate and energy targets and policy measures as part of the so-called “2020 Climate and Energy Package”.”

In the report, the IEA highlights the EU’s global leadership in transitioning to a low-carbon economy, noting progress toward the 20-20-20 goals. Under these goals, the EU intends to cut emissions by at least 20%, improve energy efficiency by 20% and increase the share of renewables in the energy mix to 20%, all by 2020. The report notes that, while the EU is on track to meet the emissions goal, largely as the result of reduced carbon intensity and vehicle fuel economy standards, it will need to supplement current efforts with policy initiative to meet the latter two goals.

EiD readers are encouraged to review this report. Here we look at some of the comments, conclusions and recommendations the review makes on the EU’s energy efficiency policies.

The executive summary writes the following about energy efficiency as an element of the climate and energy package:

“. . . the European Commission estimates that the European Union could achieve 18% to 19% of energy savings up to 2020, with measures in place today, notably the Energy Performance of Buildings Directive, Eco-design and Labelling Directives, the Energy Efficiency Directive, and EU funds with a focus on energy efficiency. A third of the savings will result from lower demand amid the economic crisis. Progress towards the 20% target will depend on further implementation of energy efficiency policies by the member states and the scaling-up of energy efficiency investments to finance retrofits in existing buildings and encourage demand-side management by consumers through smart meters and grids. In this context, to achieve the 20% energy efficiency target by 2020 remains a challenge.”

That is fine, but it says nothing about industry or transport.

Energy efficiency has often been raised in its role in improving competitiveness. This is what the IEA report states:

First, the European Union has to reduce compliance costs through a more integrated energy and climate policy at EU level which balances economic, environmental and security of supply goals. Investment in energy technology innovation is a crucial component for reducing the cost of capital and operations, thus helping the competitiveness of the European Union’s industry.

In terms of energy security, energy efficiency is not raised, even though many Commission communications and other official documents have made the link.

The executive summary provides some broad recommendations. The following is the only one that relates to energy efficiency:

Set out the legal and governance structures for the 2030 Climate and Energy Framework as a milestone towards reaching a low-carbon economy by 2050 and give priority to market-based instruments.

• Periodically strengthen and expand requirements for cost-effective energy-efficient buildings (including renovations), appliances, lighting, equipment, transport and district heating and cooling systems in cities, ensuring that these are enforced by member states. Quantify the multiple benefits of energy efficiency for social and economic purposes.

Here, transport is mentioned but not industry.

The review includes a detailed chapter on energy efficiency and it provides several recommendations. Note that none relates to the industrial sector.

The European Union should:

• Advance the EPBD by ensuring that energy efficiency retrofits in existing buildings are accelerated through a suite of integrated economic instruments and building regulations.
• Continue to ensure that the Eco-design Directive and Energy Labelling Directive remain relevant to consumers, keeping pace with technology developments and improvements in the efficiency of products in the market. Accelerate the roll-out of appropriately ambitious eco-design requirements, including to new product groups, by devoting additional resources if necessary. Collaborate internationally to harmonise product standards and improve compliance mechanisms.
• Ensure the roll-out of efficient DHC systems in cities, in close relation to building renovation, end-use efficiency and system efficiency improvements.
• Develop a strategic fuel economy policy continuing and extending the successful experience on light-duty vehicles, in particular cars, to HDV and implement eco- driving programmes across member states, in particular in the context of smart cities and e-mobility.
• Identify and clearly articulate how energy efficiency will contribute to the economic and social objectives in the 2030 Climate and Energy Policy Framework by expanding evaluations to identify key economic and social outcomes. Following on from this analysis, track progress towards: EU competitiveness, security and sustainability objectives; improvements in citizens’ health; and demonstrate that all relevant Directive outputs are fully implemented and effective in meeting targets.

More information on how to obtain the report is available on the IEA website.