Trialogue negotiations on Energy Efficiency Directive (EED) and Governance of the Energy Union Regulation (GR)

Dear Ministers,

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

We are at a crucial moment of the trialogue negotiations on the Energy Efficiency Directive (EED) and the Governance of the Energy Union Regulation (GR).

The benefits of energy efficiency for the economy, society and for the environment are underpinned by dozens of studies and businesses cases.

Yet, the discussion on the two main elements of the EED i.e. the energy efficiency target and Art.7 is inexplicably stalled.

In Europe, 76% of the emission reductions necessary to achieve the objective set by the Paris Agreement will need to come from energy efficiency measures. This would translate in business opportunities and private investments in key sectors of our economies and with huge energy saving potential such as construction, water and transport. Adequate long term binding targets would provide investors with the much-needed certainty and predictability for investments and will create the conditions to keep our leadership in energy efficiency.

Which economic and political considerations could justify missing this unique opportunity? Your decision can help to ensure that Europe remains a strong competitive and innovative market for energy efficiency from which European companies can spearhead the energy transition and sell their technologies and know-how globally.

Failing that, Europe will take the risk that competitors like China and India – for which, as in Europe, more than 70% of emission reductions will have to come from energy efficiency – will seize this opportunity and will ultimately be the ones reaping the economic benefits.

The lack of ambition and political direction is also detrimental to the discussion on the Governance Regulation which is key to create a business environment which allows long terms planning for business development and investments.

We understand that in the current text of the Regulation the Energy Efficiency First principle is merely mentioned in the recitals and there is uncertainty about the introduction of well-functioning mechanisms to monitor Members States’ ambition and delivery of the energy efficiency target.

It should not be underestimated that more than 90% of Europeans favour public measures to boost energy efficiency. The Efficiency First principle boils down to make informed choice to invest taxpayers’ money in cost-effective energy measures and is of central importance in removing energy inefficiency as a major and persistent cause of energy poverty. By carrying out systematic consumer-centric value-for-money comparisons to prioritize investments, Efficiency First delivers concrete benefits to citizens and should be a pillar of Europe’s energy transition.

Here below, in view of the Energy Council on June 11, we are pleased to provide you with our inputs to the discussions and we warmly encourage you to:

Energy Efficiency Directive

  • Support the binding nature of the EU energy efficiency target to strengthen investor confidence
  • Increase the level of ambition of the energy saving target to 35% by 2030, expressed both in primary and final energy terms
  • Extend Art.7 5% annual cumulative energy savings obligations beyond 2020 (with a 2050 perspective) to provide Member States with the incentive to continue the good progress that they have reported to achieve until now
  • Avoid double counting and loopholes that would undermine the effectiveness of Art.7 and of the whole Directive
  • Include transport energy consumption in the baseline when calculating Art. 7 1.5% annual savings.

Governance Regulation of the Energy Union

  • Support a transparent, robust and forward-looking governance compliant with the Energy Efficiency First principle to drive business decision and guarantee an adequate implementation of EU energy efficiency legislations
  • Strengthen the energy efficiency governance by allowing the Commission to check progress of individual Member states against a linear trajectory to ensure a steady flow of investment over the decade.
  • Keep a strong emphasis on national, long-term, comparable strategies.

We wish you a fruitful Energy Council which we hope will provide the much needed ambition and political direction to successfully reach a deal that will set Europe on a coherent decarbonisation track by 2050.

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Need for strong cooperation among Member States for an adequate level of ambition for EU Energy Efficiency Targets

Dear Minister,

We are writing to you on behalf of a group of 70+  leading businesses and associations concerning the ongoing negotiations on the Energy Efficiency Directive (EED) and Governance Regulation (GOV).

In recent years, the European Union has led by example in terms of its significant commitments in the framework of the Paris Agreement. The ongoing negotiations on the EED and GOV represent a unique opportunity to strengthen the role of the EU as a world leader in climate action. The EED and GOV will provide the essential policy framework to drive Europe’s energy transition, whilst embodying the principle of energy efficiency first as the chief and indispensable step to decarbonise our economies. In the European Union, 76% of the emission reductions needed to meet the Paris Agreement must and should be reached through energy efficiency improvements.

When correctly designed, such a framework has the potential to provide investors and businesses with much-needed predictability for investments, increased competitiveness, economic growth and millions of jobs across the continent. In addition, it can reduce consumers’ energy bills: in Germany and France, thanks to energy efficiency improvements, household energy bills were cut by an average of €330 per capita between 2000 and 2016 .

To achieve long-term climate and energy goals mutual understanding and strong cooperation between all EU Member States is needed. In this perspective, we welcome the close cooperation between France and Germany who have voluntarily taken on responsibility to help the EU as a whole to fulfill the ambition of the Paris Agreement, We welcome the recent joint statement of French and German environment ministers who confirmed the need to elaborate the necessary measures for higher emission reductions and move toward carbon neutrality by 2050.

We believe that the ongoing negotiations on EED and GOV are the first concrete opportunity for the EU Member States to show joint leadership towards carbon neutrality.  Ahead of the Informal Energy Council that will take place on April 19-20, we call upon all Member States to work together with the aim to:

Energy Efficiency Directive

  • Support the binding nature of the EU energy efficiency target to strengthen investor confidence;
  • Increase the level of ambition of the energy saving target to a cost-effective 40% by 2030, expressed both in primary and final energy terms;
  • Extend the 1.5% cumulative annual energy savings obligations beyond 2020 (with a 2050 perspective);
  • Avoid double counting and loopholes that would undermine the effectiveness of Article 7 and of the whole Directive;
  • Include transport energy consumption in the baseline when calculating savings.

Governance Regulation

  • Support a transparent, robust and forward-looking governance compliant with the energy efficiency first principle to drive business decisions and guarantee an adequate implementation of the EU energy efficiency legislation;
  • Strengthen energy efficiency governance by allowing the European Commission to check progress of individual Member States against a linear trajectory to ensure a steady flow of investment over the decade;
  • Keep a strong emphasis on national, long-term, comparable low-carbon strategies. These should be drafted simultaneously with the national 2030 plans aiming at delivering a decarbonised society.

 

We remain at your disposal for any additional information that could be useful to prepare the next informal meeting of energy ministers and look forward to an ambitious outcome for the economic, social and environmental benefits of the entire European Union.

Yours sincerely,

[1] IEA.(2016). Energy, Climate Change and Environment: 2016 Insights. Retrieved from http://www.iea.org/publications/freepublications/publication/ECCE2016.pdf

[2] IEA (2018), Energy Efficiency Report, Retrieved from: http://www.iea.org/publications/freepublications/publication/Energy_Efficiency_2017.pdf

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In support of at least 35% earmarking for climate-related work in FP9

Dear Commissioner Moedas, dear Commissioner Oettinger

14 Member States have pressed for at least 20% of the EU’s post-2020 budget (“Multi-annual Financial Framework”) to be spent on climate-relevant work, while the European Parliament is pushing for a 30% share as soon as possible. One of the programmes within the MFF will be FP9, supporting research and innovation. We want this programme to spend at least 35% of its budget on climate-related work.

Quotas of at least 20% and 35% respectively apply to the current MFF and the current programme supporting research and innovation, Horizon 20203. But in the years since they were adopted, climate has risen up the political agenda, most obviously with the Paris Agreement of December 2015. The new impetus behind climate action must be hardwired into the design of FP9. 35% should very much be considered a minimum.

Important work remains to be done on decarbonising transport as well as heating and cooling, reducing the cost of renewable energy, boosting energy efficiency and optimising the energy system as a whole. Simultaneously, manufacturing capability in the technologies of the future must be retained or expanded. In agreeing to “pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius”, the Paris Agreement signatories have acknowledged the need to push harder for performance improvements in clean energy technology and accelerate its take-up.

Horizon 2020’s 35% earmarking has helped the European Commission comply with the entry requirement for Mission Innovation, the pact to double public clean energy R&D spending. It created the headroom in Horizon 2020 that is allowing the Commission to spend more on clean energy R&D from subheadings beyond “Societal Challenge – Secure, Clean and Efficient Energy” than it had intended in 2013. An earmarking in FP9 will make it easier for the European Commission to comply with a future MI target or similar initiatives.

Yours sincerely,

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The next EU budget to drive the EU energy transition 

Dear President Tusk,

We are writing to you on behalf of the European Alliance to Save Energy (EU-ASE) and the European Alliance of Companies for Energy Efficiency in Building (EuroACE) whose members have operations across the 28 Member States of the European Union, directly employ 465,000 people in Europe.

On the 23rd of February, the European Council will hold an informal discussion to set priorities on the post-2020 Multi Annual Financial Framework (MFF).

The post-2020 MFF will define the financial means to address societal, economic and environmental issues of European and global concern. As this is the first budget following the Paris Agreement, it is a unique opportunity for the European Union to show vision and coherence with its long-term policy objectives, deliver tangible benefits to European citizens and to show that it is serious about living up to its commitments.

In the light of the above, the post-2020 MFF will need to be developed in compliance with current EU and global energy and climate targets. The EU High-Level Expert Group on Sustainable Finance estimated that to achieve the EU’s targets for energy and climate policy alone, additional annual investments of €170bn are required.1

This upfront investment, needed to fill the significant investment gap, will foster sustainable growth and create jobs across all EU countries and regions. Investments in energy efficiency typically create value through delivering multiple benefits (energy security, public health, improved air quality) and support innovation and competitiveness.

The MFF holds the key to help plug this investment gap. As the lion share of the required investment will have to come from the private sector, the EU budget should be designed to mobilise private financial flows – hopefully with a multiplier effect of 1:15.2

This will allow the EU to support investments on climate-related projects on a large scale, in line with the Art.2 of the Paris Agreement, which explicitly refers to a “finance flow consistent with a pathway towards low GHG emission and climate-resilient development”.

At the same time, an EU budget drawn up to provide the necessary resources to decarbonize the European economy will help foster EU technological leadership and strengthen the domestic market for clean energy technologies and solutions.

We wish you a fruitful meeting and would be grateful if you could share our views with the Heads of State and Heads of Government.

There are great challenges and significant expectations regarding the post-2020 MFF and we look forward to an outcome that will show the world that European Union is fully committed to tackle the climate change and decarbonize the EU economy.

 

Yours Sincerely,

Monica Frassoni                                                                                    

President

European Alliance to Save Energy

 

Adrian Joyce  

Secretary General

EuroACE

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Energy Efficiency Directive (EED) and Energy Union Governance 2030 Regulation to drive the EU energy transition

Dear Ministers, 

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

The EED and Governance 2030 are central to the EU post-2020 energy framework and consequently to the success of the European energy transition. From a business perspective, these two pieces of legislation -if correctly designed -have the potential to provide investors with the much-needed certainty and predictability for investments, increase the competitiveness of the European industry, generate economic growth and create millions of jobs across the continent.

We welcomed your statement on the EED General Approach reached in July 2017 and your willingness “to pursue the negotiations with a view to improve the ambition of the (EED) directive” and we also appreciated your continued support for a strong EU Governance 2030 framework. We trust you will maintain this ambition, so as to achieve a better result than the one that could be expected from the current General approach of the Council. This is all the more important in this final stage of the legislative process, as we fear that several key provisions in both proposals might be at risk. A poor outcome of negotiations could severely affect the capacity of the EU to deliver its commitments in the framework of the Energy Union and the Paris Agreement.

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