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EU reaches agreement on energy optimisation – but doesn’t lock the door

By State of Green, June 21, 2018

The EU target for energy optimisation landed at a slightly higher percentage than the compromise for renewables, although with a significant difference. Late Tuesday night also witnessed an agreement concerning governance.

The EU came to agreement Tuesday evening and late night on two climate targets, thus ratifying the EU’s energy policy ahead to 2030. Following a long and, at times, chaotic process, which resulted in a rapporteur being reprimanded and replaced shortly before Christmas and most recently saw a breakdown of negotiations just before the finish line, the three negotiating EU bodies came to an agreement on the target for energy optimisation, writes EnergyWatch.

Specifically, the target landed at 32.5 percent by 2030. On paper, that is an absolute compromise between the Council of Ministers point of departure at 30 percent and the EU Parliament’s preferred target at 35 percent. That is also marginally higher than the 32 percent target for renewable energy in 2030 agreed upon last Wednesday.

There are a few significant nuances in the compromise – the primary item being that the Council of Ministers succeeded in rendering the target binding.

On top of that, it appears that EU member states have also succeeded in maintaining a 0.8 percent cap on the binding clause concerning yearly energy savings. The Parliament originally proposed 1 percent. The precise formulation of the the yearly energy savings, also known as Article 7, remains unknown.

-Related news: EU raises renewable energy goal to 32 percent by 2030

The EU Parliament’s rapporteur in connection with the direction, Miroslav Poshe (S&D), wrote on Twitter that article 7 “will guarantee higher annual savings compared to the EU Commission proposal.” However, to what degree national loopholes have been closed or whether elements such as traffic are included remains unclear. Put bluntly, it may very well be that the EU Parliament’s greatest victory is having secured an agreement among all involved parties to renegotiate in 2023.

The immediate reactions to the agreement are quite predictable. From the higher echelons, EU Energy Commissioner Miguel Arias Canete is satisfied with the result and point to the relatively uncontroversial aspect that energy optimization makes the EU less dependent on imported energy.

“Europe is by far the world’s largest importer of fossil fuels. Today we put an end to that. This agreement is a great step forward for Europe energy independence. Much of what we spend on imported fossil fuels will now be invested domestically in more efficient buildings, industries, and transport,” said Canete in a press statement.

Critique from NGOs
Sector interest group Danish Energy is pleased with the parts of the agreement thus far made public.

“If the EU is to live up to the Paris Climate Accord, it is crucial to utilise energy more efferently that is done today. Many places in Europe continue to have buildings of poor quality. At the same time, an increased usage of electricity from renewable sources can make a positive contribution to, for instance, heating and the transport sector,” said Anders Stouge, Danish Energy Deputy Director in an email to EnergyWatch.

Equally predictable is the critique from environmental NGOs. As the majority of these had originally supported a minim requirement of 40 percent energy optimisation by 2030, it was an inherent possibility that the negotiation between 30 and 35 percent would disappoint. Many parties were also disillusioned that the EU member states succeeded in suppressing the binding clause.

“National governments have doggedly resisted breaking away from our wasteful energy model. Opting for this low, non-binding target will fail to drive the energy saving investments Europe needs, and is a missed opportunity for emissions cuts, decent homes, cheaper energy bills, and local green jobs,” says Clemence Hutin from Friends of the Earth Europe.

-Related news: Overcoming Barriers to Investing in Energy Efficiency: New Study Brings Insights to Accelerate Climate Action

Agreed implementation time line
Aside from the matter of energy optimization, another agreement was landed concerning governance – that is to say, the directive regarding how to maintain control and accountability for the implementation of the energy targets. This will, naturally, only become more difficult in the absence of a binding clause. The EU Parliament’s chief rapporteur for the directive, Claude Turmes, wrote on Twitter at 04:30 that an agreement has been reached, although without adding any further details.

Subsequent announcements made on social media indicate that an agreement regarding an implementation time frame of the new renewable energy target has been reached: 8 percent by 2022, 43 percent by 2025 and 65 percent by 2027. This should be read with a certain caution, as an official, written confirmation has not been released.

Danish Energy is pleased with that result.

“Governance legislation increases transparency and predictability for investors, and that sort of thing drives down the costs of climate change mitigation. The agreement today is positive, both over the short and the long term,” says Stouge.

The agreement also makes reference to the fact that the EU Commission must evaluate the possibilities of making the EU completely CO2 neutral by 2050. That could end up proving to be far more ambitious than the Danish government’s goal of becoming independent of fossil fuels in 2050.

The Bulgarian EU Presidency has, with today’s two agreements and last week’s renewable energy compromise, accomplished it task. Remaining elements include – aside from the formal approval of the agreements in both the EU Parliament and Council of Ministers – the package concerning electricity market design. That is expected to to reach negotiations by the second half of this year.

Finally, a formal bow will need to be tied to the energy package in the form of a declaration for the EU’s climate goals for 2030. There are indications that the present goal of 40 percent CO2 reduction relative to 1990 levels will be raised most ambitiously, although by precisely how much remains unknown. The Netherlands, which has previously had difficulties in reaching its own targets, has pleaded for a reduction of up to 55 percent.

Source: EnergyWatch

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