Assessing the European Council’s Proposal for Article 7 of the Energy Efficiency Directive
Energy efficiency plays a critical role in achieving the ambitious carbon reduction goals set out in the Paris Agreement. The International Energy Agency (IEA) created a model scenario, aligned with the Paris Agreement, which indicates that half of global emission reductions will be achieved through energy efficiency measures. In consideration of these objectives and the multiple societal benefits delivered by energy efficiency, the European Commission adopted the principle of “Efficiency First” in its Winter Package of legislation. The Commission’s original proposal leveraged the energy efficiency obligations outlined in Article 7 of the Energy Efficiency Directive (EED) to achieve a modest goal of 30 percent savings by 2030 (the EU is already on track to achieve 24 percent savings by 2030). Yet discussions in the European Council threaten to water down the scope of Article 7’s ambition drastically—as much as 80 to 100 percent—depending on the amount of excess savings and how Member States apply these proposed terms.
Dr. Jan Rosenow analyzed the Council’s proposal and assessed the impact of the loopholes eliminated and those adopted. After the Council negotiations, the target of 0.71 percent annual savings proposed by the Commission drops to less than 0.56 percent. However, in the worst-case scenario, the annual savings target could plummet to just 0.04 percent. Even in the most optimistic scenario, excess savings would be minimal and few Member States would use the option of counting savings from new buildings. While at this stage it is not possible to determine with any certainty the actual savings under the Council’s proposal, it is unequivocally clear that the energy savings goals of the EED face a serious risk.