Carbon pricing in buildings? Help renovate and switch to renewables first

Including buildings in an emissions trading scheme will have a limited impact on emissions and should, at most, complement other measures like substantially increasing renovation rates, switching to renewables and phasing out fossil fuels subsidies, writes on Euractiv Monica Frassoni, president of the European Alliance to Save Energy.

On 14 July, the European Commission unveiled its long-awaited roadmap to reach the European Union’s higher emissions reduction target for 2030, the so-called “Fit for 55” package.

No wonder it chose the day traditionally celebrating the French revolution as the scope and ambitions of this massive legislative package are considerable. With it, came the proposal of setting up a parallel Emissions Trading Scheme (ETS) for road transport and heating fuels, certainly one of the most contentious measures of the package.

According to the Commission, this proposal aims to address the lack of emissions reductions in road transport and buildings, which together account for almost 60% of EU emissions. Over the last few years, emissions from the building sector have not decreased significantly, while those from road transport have even increased.

The need to act fast and with concrete steps to reduce emissions in these sectors is clear. So seems the Commission’s logic behind the proposal: if the ETS brought emissions down in the energy sector, why wouldn’t it be the case for buildings and road transport?

There are a few reasons why carbon pricing in buildings could at best complement, but not replace – and should not distract from – policies and incentives to substantially increase renovation rates, switch to renewables and phase out fossil fuels subsidies.

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The need for speed | Contribution to the EUSEW2021

by Harry Verhaar Head of Global Public & Government Affairs and Chairman of the board of the European Alliance to Save Energy.

In this climate-critical decade, Europe is faced with the extraordinary task of drastically improving our environmental impact, while also repairing economies left shaken by the effects of COVID-19. Now is not the time to split our priorities: the actions we take to mitigate climate change and those we take to accelerate economic recovery must work both in harmony and at pace.

Both effectively and economically, energy efficiency improvements are the best strategy at our disposal for a swift reduction in carbon emissions. With buildings accounting for 40% of energy consumed and 36% of energy-related greenhouse gas (GHG) emissions, the European Commission’s Renovation Wave strategy gives us an excellent foundation on which to start.

Everything that can be done to improve the footprint of our buildings, should be done: insulation, modern heating, ventilation, and air conditioning (HVAC) technology, and digital solutions like building management systems that can monitor and optimise energy expenditure. Among these key improvements, we should not forget one of the quickest wins: lighting. Two-thirds of installed lighting is legacy technology, with 1.3 billion conventional light points across Europe that could be switched to LED. Through this alone, the EU could save around EUR 40 billion and eliminate 100 million tonnes of CO2 emissions a year. This quick, simple, and low-cost intervention comes with relatively little disruption to the building’s occupiers, and the payback is fast.

Increasing renovation rate and depth will positively impact economic growth, investments, innovation and competitiveness, and lead to a reduced reliance on fossil fuels, in turn improving Europe’s energy security. And economically, the impact of building renovation will most benefit the local SMEs who make up more than 90% of companies in the building sector. Accelerated activity on this level creates jobs for those with displaced incomes due to the global pandemic.

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Commission strengthens EU energy efficiency rules, lacks ambition on targets

The European Commission unveiled today its “Fit for 55” package to adapt the EU’s energy and climate legislation to the new goals of reducing emissions by at least 55% by 2030 and reach climate neutrality by 2050. The package includes the key proposal to revise the Energy Efficiency Directive (EED).

The EED proposal contains a number of positive elements. First of all, it enshrines the Energy Efficiency First principle (EE1st) in the Directive, introducing the much-needed obligation to apply the principle in the decision making of energy and non-energy sectors.

Other important elements are the extension of the public owned building renovation obligation to all public bodies, as well as the introduction of a new obligation to cut energy consumption of public bodies by 19% by 2030.

The revised Directive reinforces the annual energy savings obligations target after 2024 by 1.5%, almost doubling the current obligation. It also excludes the accountability of direct fossil fuel combustion technologies and clarifies that a reduction of the energy use through measures under the ETS cannot count towards the fulfilment of the energy savings obligation.

The European Alliance to Save Energy (EU-ASE) welcomes the Commission’s proposal to level up its ambition on the EU energy efficiency rules. By acknowledging the Energy Efficiency First principle, the Commission recognises its crucial role to drive a fast and fair transition in energy and non-energy sectors. However, we regret that the Commission chose not to propose binding national targets on energy efficiency; furthermore, we are critical of the Commission’s decision to propose an EU wide energy efficiency target that, even if mandatory, is not aligned with the EU decarbonisation pathway. The Commission introduces a 36% target for final energy consumption, which does not catch the cost-effective opportunities stemming of at least 40% energy efficiency target by 2030.

Monica Frassoni, President of the European Alliance to Save Energy said:
The latest extreme weather events around the world and the ongoing Covid-19 pandemic show that there is no time left for half measures on climate and on economic recovery. The EU Energy Efficiency Directive must be fit for Europe’s decarbonisation goals as well as foster economic activities aiming at increasing efficiency in buildings, industry, and transport. In this sense, we think that the proposed targets should have been more ambitious. We will be working over the next months to demonstrate to the co-legislators that delivering on ambitious energy efficiency targets and fully applying the Energy Efficiency First principle is essential if the EU wants to be credible about reaching climate neutrality in time and avoid the worst effects of climate change. We hope that the European Parliament and the Council will further improve the current proposal”.

Harry Verhaar, Chair of the board of the European Alliance to Save Energy and Head of Public and Government Affairs at Signify said:
“To be able to fully unlock the multiple benefits of energy efficiency across the continent we need an ambitious EU legal framework. We welcome the revision of the Energy Efficiency Directive, which comes at a timely moment for Europe’s green recovery and clean energy transition. In particular, we praise the Commission for strengthening the provisions on the Energy Efficiency First principle. The principle needs to guide policymakers and investors in all energy planning, policy, and investment decisions. Energy efficiency is a powerful driver of sustainable economic growth and it is key to speed up our journey to a decarbonised Europe”.

Bertrand Deprez, Vice-Chair of the board of the European Alliance to Save Energy and Vice-President EU government affairs at Schneider Electric said:
“Energy efficiency is the indisputable driver to reach at least a -55% GHG emissions cut in the next decade. The European Commission proposal goes in the right direction, with very promising measures to accelerate energy efficiency efforts at end-use level, including the extension of renovation obligations to all public buildings. Yet, achieving the EU ambition for 2030 without tackling the renovation of the entire existing stock is ‘Mission: Impossible’: we need to extend it to all non-residential buildings.”

Bonnie Brook, Vice-Chair of the board of the European Alliance to Save Energy and Senior Manager Industry Affairs Building Automation at Siemens said:
“Enhanced criteria for energy audits and energy management systems are very encouraging. They should leverage the opportunities brought by the current advanced level of digitalisation. Smart technologies should be widely deployed to enable monitoring, analysis and evaluation of the energy performance as well as the progress to the carbon-free future”.

Ahead of the publication of the proposal, the European Alliance to Save Energy provided to the European Commission its recommendations on how to make the EED “fit for 55%”. The Alliance looks forward to working together with the European Parliament and the Council during the co-legislation period to ensure that the Directive is ambitious and comprehensible.

According to the International Energy Agency’s Global Net Zero Roadmap for the Energy sector, the path to global net zero emissions implies a global push in energy efficiency gains resulting in the annual rate of energy intensity improvements averaging 4% to 2030 – about three times the average over the last two decades.

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Media contact:
Antoan Montignier
Policy and Advocacy Advisor
antoan.montignier@euase.eu
+32 499 84 97 28

About us
The European Alliance to Save Energy (EU-ASE) aims to advance the energy efficiency agenda in the European Union. The Alliance allows world’s leading multinational companies to join environmental campaigners and a cross-party group of Members of the European Parliament. EU-ASE business 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.

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EU-ASE at World Climate Forum Europe 2021

On 29 June 2021, EU-ASE president Monica Frassoni took part in the panel discussion Envisioning the Sustainable Built Environment of Tomorrow – Creating Momentum for the EU Renovation Wave, at the World Climate Forum Europe 2021.

The event, hosted by the World Climate Foundation, gathered senior policymakers and high-level public and private actors from around the world to spur action-oriented discussions on advancing net-zero targets across all sectors as well as accelerate the green recovery and adaptation ahead of the COP26.

Read excerpts from Monica Frassoni’s intervention

 

 

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Response to the Public Consultation on the EPBD revision

The European Alliance to Save Energy (EU-ASE) welcomes the opportunity to provide feedback to the European Commission’s Public Consultation procedure regarding the revision of the Energy Performance of Buildings Directive (EPBD).

Our contribution touched upon planning and policy instruments, information provision and energy performance certificates, as well as enabling more accessible and affordable financing for building renovation.

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