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

To: Ministers of the General Affairs Council Dear Minister,

The co-signatories of this letter represent a broad group of one hundred and one businesses, civil society organisations, local authorities, think tanks and other organisations who are working together to support the EU’s commitment to achieve the UN Sustainable Development Goals and the Paris Climate Agreement objectives. We are writing to urge you to ensure that the next MFF is aligned with Europe’s climate and energy objectives, and is consistent with and contributes to the Paris Climate Agreement and Sustainable Development Goals across all programmes.

The recently published IPCC 1.5°C report shows that we have the scientific understanding, the technological capacity and the money to avoid the worst impacts of climate change. The only barrier is one of political will, which you and your colleagues can change.

Therefore, we ask you to:

• Increase the climate action target to at least 40% of the whole EU Budget, with specific ex-ante binding targets per programme[1].
• Climate proof the entire EU budget, and exclude spending on projects that are not in line with the Paris Climate Agreement, such as unabated fossil fuels infrastructure and environmentally harmful subsidies. Extend the exclusion criteria on fossil fuels in the Cohesion Fund programme proposal to all fossil fuel investment and apply these across all programmes.
• Include Energy Efficiency First as a mandatory assessment tool in all planning and preparation of programmes and projects, similar to the provisions in the Regulation on the Governance of the Energy Union.
• Improve the performance and result orientation of climate action. Take into account the recommendations by the European Court of Auditors on the climate tracking methodology, differentiate between mitigation and adaptation measures, and avoid overestimation.
• Align financial flows and fiscal incentives to a low carbon pathway as committed to under the Paris Climate Agreement. Align the National Energy and Climate Plans with financing strategies under the EU Budget[2], and incentivise climate action through higher budget allocation and better financial conditions.
• Provide support for a just transition to a low carbon economy, in particular to support communities and workers in high-carbon regions highly depending on fossil fuels. We look forward to engaging with you on this very important matter.

We look forward to engaging with you on this very important matter.

[1] In the current proposal, binding targets on climate action are only to be found in ERDF, a share of the Rural Development Fund and part of InvestEU.

[2] Such as Partnership Agreements, long term renovation strategies, Connecting Europe Facility plans, InvestEU proposals and the CAP.

To the kind attention of Members of ENVI Committee

RE: Recommendations on ENVI Committee vote on ‘Quality of water intended for human consumption. Recast’

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 welcome the collaborative and fast-paced work of the rapporteur and shadow rapporteurs on the recast of the Drinking Water Directive. The recast is a historic first step to fix the 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 secure that we meet the Paris Agreement. As technology and solutions providers in energy efficiency and water, we would like to highlight our support for the following provisions ahead of the forthcoming vote in the ENVI Committee.

Energy performance transparency requirements

The energy consumption of the EU water sector represents the equivalent of 3.5% of the EU electricity consumption[1]. In municipalities, water and waste water facilities account for the largest consumption of electricity, representing 30-40% of local authorities’ total electricity bill[2]. 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 untap this huge potential, a first step is to secure transparency on their energy performance.  However, the state of the energy performance of the drinking water sector is not taken into consideration in the compromise amendments. This represents a missed opportunity for the drinking water sector to transition towards a more energy efficient and carbon-neutral operation and to attract investments.

An effective way to raise awareness about the energy performance and leakage reduction of the water supplier would be to make the information on the energy performance of water suppliers available online for the local governments and decision makers. Specifying the scope of the information requirement from raw water extraction to tap delivery, i.e. across the whole water supply chain, would enhance transparency on the energy use of the drinking water sector, build baseline of energy use for the detection of opportunities and be a driver towards a more energy efficient model.

Water leakage reduction target based on a common metric

A significant amount of energy and investment could be saved by monitoring and reducing water leakage, not to talk about precious water resource in times of water scarcity. Indeed, in the EU, energy to pump and distribute billions of cubic meters of water, that are lost through leaking pipes, is used in vain every day. We therefore support the introduction of provisions for Member States to introduce water leakage reduction targets, as outlined in Compromise Amendment 4 on the General Obligations of the Directive.

The European Commission estimates that, in average in the EU 23% of all treated water in public water supplies is lost within the distribution network as a result of leakage. In some municipalities, this figure can increase to 60%[3]..

Mandated Member State targets to combat these water losses within the distribution system would provide the EU with improved economic returns for water operators, as well as a safer drinking water supply from an environmental perspective.

However, it is important that the establishment of Member State targets is based on a common metric – cubic metres of water/km of pipe per day. This would ensure that improvements in addressing the leakage are both measurable and comparable. Without such metric, there is a risk that Member States would create arbitrary targets that would have no meaningful impact on improving leakage rates.

Water leakage comprehensive assessment

We regret that in the compromise amendments Member State competent authorities may not be obliged to carry out a comprehensive assessment of the water leakage levels on their territory which includes all relevant public health, environmental, technical, economic factors.

Including all environmental, technical, health and economic factors in a comprehensive assessment will ensure that Member State competent authorities can maintain a holistic overview over all the factors that impact on the drinking water infrastructure.

We wish you a fruitful vote and remain at your disposition for further discuss the provisions above to your best convenience.

Yours sincerely,

Monica Frassoni

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

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

[2] Ibid

[3] 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)

To: EU Heads of State and Government
Cc: EU Environment and Energy Ministers

Brussels, 12 June 2018

We are writing to you on behalf of a unique coalition of businesses, associations, investor groups, local and regional authorities, and civil society organisations. In 2015, European leadership helped deliver the Paris Agreement.

Since then, the EU has focussed on implementing the pre-Paris pledge into climate and energy legislation. Today we welcome growing political momentum to go beyond this effort, in particular:

• the European Parliament’s position to increase the EU’s 2030 renewable energy and energy efficiency targets,
• the March European Council conclusions calling for a Paris-consistent long-term strategy,
• and the call from seven Member States to align EU climate ambition with the Paris Agreement. The EU is widely acknowledged for its long-standing commitment to tackling climate change through robust policy-making.

However, the current level of ambition is insufficient and hampering Europe’s chances of reaching the Paris goals. An enhanced level of ambition is critical to the ability of our organisations, businesses, cities, regions, and community-led initiatives to accelerate the transition to a zero-carbon Europe.

On 13 June, key European stakeholders will be discussing ways to step up EU ambition on climate action at the High-Level EU Talanoa Dialogue. This is an important milestone ahead of the European Council in June where you will be discussing the bloc’s climate and energy frameworks of the future, in light of COP24 in Katowice.

We need Europe to transition to a sustainable society and economy as soon as possible, to allow for improvements to public health, greater competitiveness for businesses, and an increase in good quality jobs. This will allow all of us to reap the benefits from the decarbonization of Europe.

To deliver on this, Europe needs to stimulate rapid and long-term investments in the energy transition, particularly in efficiency and renewables. At the same time the EU should incentivise transformational change in the transport and agricultural sector, protect and restore our natural ecosystems and support the transition of local economies through local action.

Such an approach will be more credible and influential on the global stage, regaining its status as a committed leader on climate action and in the energy transition. By stepping up its commitments, the EU can limit the extent of climate impacts, abroad and domestically thereby significantly reducing the economic damage from climate change which would otherwise amount to hundreds of billions of euros every year .

Therefore, we call upon you to:

• Ensure the finalisation of the EED, RES and Governance files in line with the ambition levels adopted by the European Parliament.
• Ensure that the long-term strategy under development sets Europe on a pathway that delivers on the 1.5°C objective of the Paris Agreement, which must include a net-zero emissions target by 2050 at the latest, as supported by the European Parliament.
• Ensure that on the basis of this long-term strategy, a timely revision takes place of the 2030 greenhouse gas emissions reduction target so as to allow the EU to lead by example and resubmit its new Nationally Determined Contribution (NDC) well in time for the 2020 deadline agreed in Paris.

More than ever, we stand ready to play our part in support of the objectives of the Paris Agreement. To realise our potential, we need EU leaders to deliver on their part: a commitment to more ambitious climate action and a rapid energy transition. The urgency has never been greater, but neither have the opportunities.

Signatories: