Decarbonising the building and heating sectors: considerations on carbon pricing

Energy efficiency should be the starting point for all decarbonisation efforts. Carbon pricing can play a role in this, as it can provide incentives for the fuel switch and to some extent for energy efficiency investments. Yet, it should not replace impactful regulatory measures in the building sector driving the energy savings necessary to meet climate neutrality.

 

We believe carbon pricing in the building sector can only work effectively and efficiently if:

  • Its modalities are thoroughly assessed to gauge its potential benefits for the building sector
  • It is part of a well-designed broader policy mix
  • It includes a resilient mechanism for reinvesting its revenues to prevent and reduce energy poverty

 

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Broad coalition calls on EU not to rely on hydrogen to decarbonise buildings

33 businesses, industry associations, NGOs, and think tanks joined forces to urge the European Commission to prioritise available efficient and sustainable solutions to decarbonise Europe’s building stock, and avoid the direct use of hydrogen.

Addressing EU Commission Executive Vice-President Frans Timmermans in an open letter, the co-signatories underline that to achieve a higher 2030 EU climate target, massive emissions reductions in the building sector will be needed (<60% compared to 2015). This requires applying the energy efficiency first principle and boost the integration of renewables, as envisaged by the Renovation Wave strategy.

While it is true that renewable hydrogen can play a role in decarbonising hard-to-abate sectors, its direct use for heating on a large scale is problematic because it comes with many uncertainties linked to the scalability, costs of its production and inefficiencies, the letter says.

To optimise the process of heat decarbonisation in the medium and long-term, the EU should favour energy efficiency options as they can immediately deliver real carbon savings, while accommodating a growing share of renewable sources.

The co-signatories call on the Commission not to overestimate the potential of “zero-emission gas”, which would be mostly imported from abroad. Doing that would constrain EU taxpayers to fund unnecessary infrastructures, such as gas pipelines (or their upgrade), diverting financial resources from immediately applicable and more sustainable heat decarbonisation solutions.

Monica Frassoni, President of the European Alliance to Save Energy (EU-ASE), said:
“To achieve higher emission reductions by 2030, the EU must act fast to decarbonise buildings as one of the most energy consuming and polluting sectors. To make this happen, we need to prioritise energy efficiency and renewables, while using hydrogen to decarbonise harder-to-abate sectors, like chemicals and steel.”

 

Read the full letter here

 

The European Alliance to Save Energy (EU-ASE) aims to ensure that the voice of energy efficiency is heard across the European Union. 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
matteo.guidi@euase.eu
+32 493 37 21 42

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Inputs for economic recovery, resilience and long-term sustainability

This short paper outlines the inputs of the European Alliance to Save Energy to achieve a green economic recovery, resilience and long-term sustainability in the aftermath of the Covid-19 pandemic. 

These include spending criteria and quota that should be applied in both the Recovery and Resilience Facility Regulation (RRF), currently being negotiated by the European Parliament and Council, as in the National Recovery and Resilience Plans (NRRPs).

The paper calls for prioritising investments in areas such as energy efficiency rather than lock-in resources in fossil fuel infrastructures that undermine the achievement of the Union’s climate and environmental objectives.

A key area of intervention to boost energy efficiency and cut CO2 emissions is represented by buildings. In the NRRPs, Member States should priorities cost-effective renovation programmes that foster the quality, rate, and depth of comprehensive renovations.

Technical assistance is also essential to remove the hurdles for local authorities, SMEs and corporate investments to implement energy efficiency projects and renovate the building stock.

 

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Decarbonising Europe’s buildings with available solutions, no hydrogen

Meeting the EU’s goal of achieving a climate neutral economy by 2050 will require a steep reduction in gas demand, and such reduction will need to start before 2030. This means the EU should focus on immediately available and cost-effective solutions, starting from energy efficiency and renewables, especially for buildings.

While green hydrogen can play a role in decarbonising the EU economy, its pathway comes with many uncertainties linked to the costs of its production, its inefficiency and effective application and should therefore be limited to hard-to-abate sectors only.

As for the heat policy for decarbonisation of buildings, the paper calls for the acceleration of energy efficiency options that can immediately deliver real carbon savings, while accommodating a growing share of renewable energy.

 

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Renewable and efficiency businesses highlight priorities for increased climate ambition

Together with a large group representing Europe’s renewable and systemic energy efficiency value chains, EU-ASE sent a letter to the cabinet of European Council President Charles Michel.

The signatories strongly welcomed the increased ambition recently announced by the Commission, which builds on the key pillars supported by our associations: the combination of the energy efficiency first principle with the transition to renewable energies, with a specific emphasis on the electricity, heating & cooling, building and transport sectors.

The letter states:

“The good news is that technologies are available. However, barriers still prevent their uptake. Therefore, we need bold and urgent action from your side.”

The group highlighted four top priorities to ensure an increased climate ambition by 2030. These are:

  • The need to systematically apply the “energy efficiency first principle” as an essential enabler for decarbonisation, by reducing energy demand and costs associated with energy production, infrastructure and use.
  • The need to recognise “flexibility” as a core driver for the energy transition with dedicated measures to promote key elements such as efficient system management, energy storage, waste heat recovery and demand response technologies.
  • The need to actively facilitate customer choice towards the most cost-efficient technologies with the highest impact in terms of energy efficiency and CO2 emission reduction, building on the huge potential of digitalisation with smart technologies and controls, and with measures aimed at creating a level playing field for all energy carriers.
  • The need to sustain European excellence in renewable energies and their efficient use by further paving the way for the ambitious deployment of all renewables, with measures aimed at making use of and future-proofing Europe’s energy infrastructure as well as unlocking investments into the deployment of new, innovative technologies.

 

Download the full letter here

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