To the kind attention of the Members of the BUDG and ECON Committees

Harry Verhaar

Chairman of the Board of Directors of the European Alliance to Save Energy (EU‐ASE)

Head of Global Public and Government Affairs, Signify

Brussels, 28 November 2018

Dear Member of the European Parliament,

RE: Ahead of BUDG/ECON vote on December 3, businesses support Building Renovation Window in the InvestEU programme

I am writing to you on behalf of the European Alliance to Save Energy (EU-ASE). EU-ASE is a multi-sectoral business organisation whose members operate across the 28 Member States of the European Union, with an aggregated annual turnover of €115 bn, directly employing 340.000 people in Europe.

The Multi Annual Financial Framework (MFF) post 2020 is a unique opportunity for the EU to demonstrate coherence with its long-term energy and climate objectives and show commitment to deliver tangible benefits to European citizens. Our business community sees the MFF as a necessary trigger for outlining the much-needed long term political direction for mobilizing private investments towards a decarbonized European economy. Public EU funds alone are not sufficient to finance this energy transition. According to a recent report of the European Commission, the EU budget contribution to mitigation finance covers as little as 5-7% of the total resource required¹. But the EU budget has an important leveraging role to play in attracting private investments necessary to fill the gap. The investments in clean technologies, and in particular in cost-efficient energy efficiency projects, will only get unlocked if the EU provides long term certainty to the private sector.

Our position paper A climate-proof budget to leverage the necessary investments to deliver the Paris Agreement outlines in greater detail the views of a cross sectoral alliance of businesses on the current discussion concerning the overall MFF proposal and the related sectoral funding instruments. It calls for a full application of the Energy Efficiency First principle, increased climate mainstreaming and improved climate proofing.

With specific regard to the InvestEU programme, which is due to be voted on December 3 in the BUDG and ECON Committees, we believe the programme should prioritize investments in energy efficiency and promote the integral energy saving technological uptake (both on the energy demand and supply sides) in sectors with high potential, such as the EU building sector. Indeed, the European building stock uses about 40% of the EU final energy consumption and 75% of buildings remain largely inefficient. Considering the staggering amount of energy that is wasted because of inefficiency in power and heat production, delivery and consumption in this sector, we should put all our effort to minimise this waste, which can be avoided.

Our homes are responsible for about 36% of CO2 emissions in the EU. Such emissions must be cut by at least 90% to reach net zero by 2050 and limit the devastating impact of climate change on people, communities, economies and ecosystems around the world.

In addition, we should not underestimate that, beyond energy and cost savings, the renovation of buildings, being building management systems or staged deep renovation, also brings along non-energy related benefits such as the creation of local jobs, thermal comfort, better living conditions, healthier populations and it is likely to eventually pave the way for the electric vehicle revolution².

Hence, the question of feasibility: one of the key barriers in the much needed renovation of European residential buildings is leveraging finance from the private sector. The ITRE Committee voted in favour of the creation of a building renovation window which could address this barrier and could help tackle the EU renovation challenge by stimulating private investments. Dedicated funds for building renovations will provide EU guarantees for the development of innovative financing schemes such as energy performance contracting, pre-financing with on-bill or on-tax repayment, green bonds and green mortgages that will help to finance large amounts of small projects stemming from the EPBD long-term renovation strategies and will help to increase the renovation rate across the continent.

Dear Member, ahead of the vote on December 3, we urge you to support the ITRE proposal to create a building renovation window because investing in the renovation of our homes simply makes economic sense and speaks to the hearts and minds of people.

We remain at your disposition for further discussion on this strategic topic.

Yours sincerely,

Harry Verhaar

Chairman of the Board of Director of the European Alliance to Save Energy (EU-ASE)

Head of Global Public and Government Affairs, Signify

[1] Climate Mainstreaming in the EU Budget: preparing for the next European Commission, Directorate General for Climate Action, https://publications.europa.eu/en/publication-detail/-/publication/1df19257-aef9-11e7-837e01aa75ed71a1/language-en

[2] Rocky Mountains Institute Report on EVs deployment, which predict a 3,000 Twh increase in electricity demand by 2040 if the world switches to electric vehicles as fast as their fastest scenario. To ensure that the power grid has sufficient capacity to deal with it, the researchers advocate accelerated action from political leaders and to step up the renovation of buildings to improve their energy According to the researchers, increasing the current global building retrofit rate from approximately 1% per year to just over 5% per year, could accommodate baseline adoption of 550 million electric vehicles on the road through 2040 without increasing generation capacity dramatically.

To the kind attention of Elisabeth Köstinger

Federal Minister for Sustainability and Tourism of Austria

Cc: 28 Ministries for the Environment and for Energy of the EU

Dear Minister Köstinger,

RE: “Quality of water intended for human consumption. Recast”

I am writing to you on behalf of the European Alliance to Save Energy (EU-ASE) and a broader coalition of businesses operating in the water sector. EU-ASE is a multi-sectoral business organisation whose members operate across the 28 Member States of the European Union, with an aggregated annual turnover of €115 bn, directly employing 340.000 people in Europe.

We welcome the collaborative and fast-paced work of the European Parliament on the recast of the Drinking Water Directive. The recast is a historic first step to fix a missing dimension of the water regulatory framework, which is the energy-water nexus. There is a huge energy savings potential in the water sector that must be untapped to contribute towards securing the objectives of the Paris Agreement.

Water leakage reduction

On the outcomes of the European Parliament report, we were encouraged to see that there is a clear direction to reduce water leakage and save the energy required to pump and distribute billions of cubic meters of water that are lost through leaking pipes every day. The Commission estimates that in average 23% of treated water in the EU is lost in public water supplies; in some municipalities the leakage rates can rise up to 60%[1]. This can be fixed and leakage can be reduced by at least 30-40% replacing pipes and/or using energy efficiency technologies to monitor water distribution.

In this perspective we welcome and support:

• The inclusion of a requirement to assess leakage levels and the adoption of 2030 national leakage reduction targets for water suppliers by 2022 at the latest
• The inclusion of transparency requirement on leakage levels for large and very large water suppliers
• The obligation of water suppliers to reference the risks stemming from leaky pipes in water safety plans

Energy performance transparency requirements

On the other hand, the European Parliament report fell short to keep the transparency requirements on the energy performance of water suppliers, originally included in the European Commission proposal. It was a missed opportunity for the drinking water sector to transition towards a more energy efficient and carbon-neutral operation and to attract investments.

The energy consumption of the EU water sector represents the equivalent of 3.5% of the EU electricity consumption[2]. In municipalities, water and waste water facilities account for the largest consumption of electricity, representing 30-40% of local authorities’ total electricity bill[3]. It is realistic to cut the energy use of the water and waste water sector by 50%, yet investments are below their cost-optimal levels to achieve this level of reduction.

From this perspective, we call for the information on the energy performance of water suppliers to be available online for the local governments and decision makers and on request for ESCOs or market players willing to invest in energy savings programs. This will:

• provide useful information on the energy used from raw water extraction to tap delivery, i.e. across the whole water supply chain
• enhance transparency on the energy use of the drinking water sector
• build baseline of energy use that will enable the detection of opportunities of investments towards innovation and more energy efficient model.

Dear Minister, as technology and solutions providers in energy efficiency and water, we urge the Austrian Presidency and all the 28 Member States of the EU to:

• Match the European Parliament’s ambition on water leakage
• Support the European Commission’s proposal on energy performance transparency requirements
• Accelerate the adoption of a general approach on this strategic file in view of reaching a deal under the current political cycle

This is an urgent matter and we should act without delay – reducing energy waste in the water sector makes economic and environmental sense as it delivers tangible, multiple and collective benefits to European citizens, households and local authorities.

More information on how to unleash the energy efficiency potential in the EU water sector are included in a position paper downloadable here

We remain at your disposition for further discussion on this strategic topic.

Yours sincerely,

Monica Frassoni

President of the European Alliance to Save Energy (EU-ASE)

[1] IMPACT ASSESSMENT Accompanying the document Proposal for a Directive of the European Parliament and of the Council on the quality of water intended for human consumption (recast)

[2] IEA (2016), WEO-2016 Special Report : Water-Energy Nexus

[3] Ibid