EU summit deal is good news for Europe’s recovery, but clearer rules are needed on climate conditionality

On Tuesday 21 July, after one of the longest summits in the European Union’s history EU Heads of State and Government stroke a deal on the recovery plan and multiannual financial framework (MFF) for 2021-2027.

The European Alliance to Save Energy (EU-ASE) welcomes this historic result at a time when it is crucial to ensure Europe’s swift socio-economic recovery in the aftermath of the Covid-19 pandemic.

The recovery plan is a unique opportunity to address – in the long term – the devastating impact of climate change on our societies. The overall climate earmarking for both the Next Generation EU and the MFF was increased from 25% to 30%. Expenditures will have to be aligned with the objective to reach climate neutrality by 2050 and contribute to achieving the Union’s new 2030 climate targets, which will be updated by the end of the year. Moreover, the Council agreed that, as a general principle, all EU expenditure should be consistent with the Paris Agreement objectives and the “do no harm” principle.

While welcoming the new instruments and targets, EU-ASE regrets the heavy cuts to the Just Transition Fund and the InvestEU programmes, both very relevant to ensure a smooth transition to a climate neutral society.

Monica Frassoni, president of the European Alliance to Save Energy said: The increase in the climate earmarking, as well as the references to the Paris Agreement and Sustainable Development Goals are good signs. Moving forward, we need to further increase the percentage of climate mainstreaming and need clearer rules, including a stringent definition of harmful activities, to ensure that no EU-backed spending is directed to investments at odds with the climate neutrality goal.”

We hope that the European Parliament will call for higher climate ambition. EU-ASE looks forward to working with the Parliament and Member States to make sure that the overall green commitment is reflected in the relevant sectoral legislations and in the national Recovery and Resilience plans.”

The businesses represented in EU-ASE stress that energy efficiency must be prioritised across key sectors (buildings, industry, transport, ICT) and the ‘energy efficiency first’ principle should guide energy investments in view of the proven economic and social benefits of efficiency measures both in the short and longer term.

 

About EU-ASE
The European Alliance to Save Energy (EU-ASE) was established in December 2010 by some of Europe’s leading multinational companies. The Alliance creates a platform from which companies can ensure that the voice of energy efficiency is heard from across the business and political community. EU-ASE members have operations across the 27 Member States of the European Union, employ over 340.000 people in Europe and have an aggregated annual turnover of €115 billion.

Media contact:
Matteo Guidi
+32 493 37 21 42
matteo.guidi@euase.eu

Recover Europe? Renovate buildings!

by Peter Robl, Public Affairs Manager Eastern Europe at Knauf Insulation & Martin Hojsík, Member of the European Parliament

This op-ed was published on CEEnergyNews


Building renovation needs the EU’s support and will help recover the economy in return. European leaders need to deliver efficient incentives soon.

Building renovation is a key element of achieving Europe’s 2030 and 2050 decarbonisation targets. The COVID-19 related quarantine and the current summer heatwaves across Europe have underlined the importance of quality and energy-efficient buildings to deliver safe and healthy housing and workplaces. Europe needs to increase the generally low renovation rate, yet the economic impacts of the COVID-19 crisis will further push the rate down.

The slowdown in renovation activity will result from a decline in investor confidence. Who would not delay insulation of their home by a year or two, when they had lived without insulation for the last ten? Who would provide a loan for renovation if repayments are not secured?

Construction output tends to suffer from economic hick-ups longer and harder than the rest of the economy. After the crisis in 2008, GDP and industrial production returned to growth as early as 2010 in many countries, while construction output continued to fall year after year until 2014 (as illustrated by the Slovak case – see chart below).

 

 

European leaders have the power to help economic recovery, decarbonisation and housing quality of EU citizens at the same time. Delivering efficient incentive mechanisms aimed at building renovation and delivering them soon is required.

They have plenty of opportunities. Many countries struggle to manage spending from the current cohesion programs (2014 – 2020) in a number of areas. Re-allocating the funds to building renovation programs where demand is high is a sensible solution and an alternative to leaving the money on the ground. Swift finalisation of the MFF discussions will enable Member States to seal Partnership Agreements and launch new Cohesion funding (2021 – 2027) without much delay. The Next Generation EU fund intends to help Europe with green and digital transitions and should, therefore, include programs aimed at building renovation.

Lessons learned from previous periods need to be taken on board to ensure good results. Visegrad experts have pulled their 15 recommendations on more efficient use of the 2021-27 Cohesion Funds that apply to any other EU or national funding, too. Experts call, among other things, for a better reflection between allocation and investment need. They also say that “more developed regions” need access to the funding, too – building owners, both public and private, need to be motivated to perform a renovation and to perform it with higher ambition and quality, regardless of how developed their region is. Moreover, they suggest excluding renovation from state aid rules and streamlining public procurement to a lean and effective process as this would increase the renovation uptake.

But are the Central and Eastern European Member States actually ready to deliver building renovation? In fact, and contrary to their climate policy attitudes, they are. Just a few examples. Romania is just about to launch subsidy programs for both single-family homes and public buildings. Bulgaria has a successful track record with a program for a multi-apartment building renovation that is now on hold due to budget issues. In Slovakia, renovation projects of municipal buildings worth more than 100 million euros are ready as they have applied but not received subsidies from an EU Fund program. Poland is starting a Clean Air Program aimed to combat air pollution. The Czech Republic has a positive experience with their New Green Savings, a program delivering quality renovation of 8,000 single-family homes a year. Croatia seeking funding for multi-apartment and public building renovation programs, as well as for buildings in Zagreb damaged by the March 2020 earthquake.

Supporting the quality renovation of buildings delivers several benefits. It goes directly to builders, the citizens. Not only does it control the damage to the decline of construction output, but also helps recover the economy. It turns private savings into investments and economic activity. It triggers domestic demand that is catered to by small local construction companies across all regions of Europe evenly. Therefore, renovating buildings is a key tool to support the EU’s socio-economic recovery after this crisis, and leaders and governments should act to make this happen.

 

Leading businesses urge Governments to put building renovation at the centre of recovery plans

Ahead of the important European Council meeting of next 17-18 July, EU-ASE addressed a letter to the 27 EU Heads of State and government to call for leadership and long-term political vision for managing the economic and social crisis caused by the COVID-19 pandemic.

 

Brussels, 14 July 2020

 

Dear Leaders of Europe,

 

The health and socio-economic crisis caused by Covid-19 calls for unprecedented decisions in the process of designing resilience and recovery plans. We have now an opportunity for Europe as a whole to make a great leap forward towards new and more sustainable economic models, instead of going back to the pre-crisis status quo. Now more than ever, Europe needs your bold political vision to implement immediate measures and to quickly fix the damages left behind by COVID-19, while investing in our long-term future. This opportunity should not be wasted.

As businesses and investors having energy efficiency and energy demand reduction at the heart of our activities, we expect Europe’s global climate leadership to be translated into measures which will lead to a green recovery and positive long term impact for citizens, business and the environment. As an example, the Renovation Wave is a unique opportunity to promote a European based industry, with technologies and expertise able to serve the renovation demand locally. Investing in the comprehensive renovation of the European building stock will help maintain the competitive advantage of the European construction value chain and create local jobs, while lifting millions of Europeans out of energy poverty. But despite its great potential, only a few Member States have committed to this objective by submitting their Long-Term Renovation Strategies due in March.

According to the European Commission’s recovery strategy released last month, the renovation of buildings across Europe is key and the upcoming Renovation Wave Initiative will be critical to stress the positive impact that sustainable and energy efficient buildings can have on health, well-being and quality of life; emission reduction and climate change; economic recovery and job creation. According to a recent study, for every €1 million invested in energy renovation of buildings, an average of 18 jobs are created in the EU. These are local, long-term jobs that will stimulate economic growth and will help drive us out of the economic crisis.

In order to fully realize Europe’s building renovation potential, it is paramount to increase the renovation rate of the building stock to a minimum of a 3% per year and make renovation programmes the cornerstone of the national recovery and resilience plans that you are due to present next October.

In view of the above, we look forward to working with you to decarbonize the EU building stock by 2050.

Yours sincerely,

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

 

Download the letter

 

Media contact:
Matteo Guidi
+32 493 37 21 42
matteo.guidi@euase.eu

Decarbonising industry and the ICT Sector (EUSEW 2020 side event)

The webinar “Decarbonising industry and the ICT sector: energy and CO2 saving potentials in the short and longer term“, part of the EU Sustainable Energy Week 2020 extended programme, brought together policymakers, researchers, and a cross-sectorial group of business representatives to discuss about:

  • existing technologies and approaches to save energy and reduce emissions in industry and the ICT sector – in the short term
  • policy guardrails needed for a GHG-neutral EU industry and ICT sector – in the longer term

Three impulse presentations were followed by a panel discussion with policy-relevant actors and a virtual interaction with the audience.

Speakers: Peter Hoedemaker, President, European Industrial Insulation Foundation; Jan Ciampor, Policy Officer, Energy Efficiency Unit, DG ENER, European Commission; Antti Valle, Deputy Head of Unit, Energy Intensive Industries and Raw Materials, DG GROW, European Commission; Andreas Guertler, Director, European Industrial Insulation Foundation; Gaël Souchet, Senior Product Manager New Energy Storage, Schneider Electric; Andrea Herbst, Senior Researcher, Fraunhofer Institute for Systems and Innovation Research ISI; Guido Knoche, Senior Advisor for Climate, German Environment Agency (UBA); and Barbara Mariani, Senior Policy Officer for Climate, European Environmental Bureau.
Moderator: Monica Frassoni, President, European Alliance to Save Energy.

The event was co-hosted by the European Industrial Insulation Foundation, the European Alliance to Save Energy, the German Environment Agency (UBA) and the Fraunhofer Institute for Systems and Innovation Research ISI.

 

Watch the recording of the webinar here

 

The full presentation is available here

 

EU-ASE welcomes strong reference to ‘Efficiency first’ in Energy System Integration Strategy, calls for limited role of green hydrogen in hard-to-decarbonise sectors

Brussels, 8 July 2020 – Today the European Commission presented its proposals for the EU strategies for energy system integration and hydrogen.

The Energy System Integration Strategy sets out a vision on how to accelerate the transition towards a more integrated energy system, supporting full decarbonisation at the least cost across sectors.

The proposal puts first a more “circular” energy system, with energy efficiency at its core. Moreover, the Strategy calls for the application of the energy efficiency first principle consistently across the whole energy system, including through further measures to reflect the life cycle energy use and GHG footprint of the different energy carriers to be able to make an accurate comparison between demand and supply-side solutions. The Commission will issue guidance to Member States to make the efficiency first principle operational across the energy system, by 2021, and promote it in future methodologies and legislative revisions.

The European Alliance to Save Energy (EU-ASE) welcomes this proposal and is glad that it highlights the importance of mainstreaming energy efficiency first across the energy system.

We are pleased by the Strategy’s strong reference to energy efficiency as a key enabler of the decarbonisation of Europe’s energy system”, said EU-ASE President Monica Frassoni. “We also welcome the suggested actions to better enshrine efficiency first, and the commitment to further promote this principle in the TEN-E revision.” “Regarding hydrogen”, Ms Frassoni added, “we would like to stress that while green hydrogen could play a role in hard-to-decarbonise sectors such as primary industry and heavy-road transport, for buildings, there are more cost-effective and ready-to-use solutions”. “In this light, technologies for direct electrification are already available and their deployment should be accelerated,” Ms Frassoni concluded.

More information on EU-ASE position on Energy System Integration can be found here

About EU-ASE
The European Alliance to Save Energy (EU-ASE) was established in December 2010 by some of Europe’s leading multinational companies. The Alliance creates a platform from which companies can ensure that the voice of energy efficiency is heard from across the business and political community. EU-ASE members have operations across the 27 Member States of the European Union, employ over 340.000 people in Europe and have an aggregated annual turnover of €115 billion.

Media contact:
Matteo Guidi
+32 493 37 21 42
matteo.guidi@euase.eu

Download the press release here (PDF)