EU leaders agreed a recovery package and the 2021-2027 budget that will help the EU to rebuild after the pandemic and will support investment in the green and digital transitions.
We have reached a deal on the recovery package and the European budget. These were, of course, difficult negotiations in very difficult times for all Europeans. A marathon which ended in success for all 27 member states, but especially for the people. This is a good deal. This is a strong deal. And most importantly, this is the right deal for Europe, right now.
President Michel at the press conference of the European Council
The socio-economic fallout from the COVID-19 crisis requires a joint and innovative effort at EU level in order to support the recovery and resilience of the member states’ economies.
To achieve the desired result and be sustainable, the recovery effort should be linked to the traditional MFF, which has shaped EU budgetary policies since 1988 and offers a long-term perspective.
EU leaders have agreed to a comprehensive package of €1 824.3 billion which combines the multiannual financial framework (MFF)and an extraordinary recovery effort under the Next Generation EU (NGEU) instrument.
Convened by the Executive Director of the IEA in response to the global slowdown of energy efficiency progress, the Global Commission for Urgent Action on Energy Efficiency was established in June 2019 at the IEA’s Fourth Annual Global Conference on Energy Efficiency in Dublin, Ireland. The Commission has 23 members and is composed of national leaders, current and former ministers, top business executives and global thought leaders.
With analytical support from the IEA, Global Commission members have examined how progress on energy efficiency can be rapidly accelerated through new and stronger policy action by governments across the globe. It has developed this series of actionable recommendations to support governments in achieving more ambitious action on energy efficiency.
The Global Commission’s work comes at a critical moment in clean energy transitions around the world. Despite energy efficiency’s tremendous potential, the world is struggling to capture its full benefits. Global energy efficiency is not improving quickly enough to offset strong energy demand and CO2 emissions growth. In light of these worrying trends, there is a growing recognition by governments and leaders across the globe that efficiency efforts need to be stepped up.
In 2020, the Covid-19 pandemic has transformed the energy landscape and the priorities of governments around the world. The Global Commission’s work has been sharply focused on this new reality. Energy efficiency represents a key tool that governments can use to respond to the severe economic, environmental, and social development consequences of the crisis.
Read the full article here. Download the report here.
This report is focused on barriers to implementing “Efficiency First” (E1st) in the EU in several policy areas that are linked to energy use in the buildings sector (such as network codes, renewable energy policy, building regulations and others).
The Enefirst consortium has released a report identifying persisting barriers to implementing the decision-making principle of efficiency first in energy system planning and policymaking. The report, authored by BPIE, is based on the results of a survey to 45 experts in energy efficiency in buildings, infrastructure, and planning from across Europe.
The main messages from this survey are that:
Political barriers are the category most frequently mentioned by respondents, suggesting that implementing the E1st principle would be first and foremost a political decision.
A majority of respondents stressed the lack of expertise, knowledge, awareness or understanding, which suggests that a proactive dissemination of good practices and case studies is important.
Implementing E1st can work only if every actor understands what it means for them: making E1st a common practice implies making E1st part of everyone’s work.
Multiple benefits of E1st need to be considered and communicated more effectively among stakeholders, in line with one key element of the E1st principle: using a broader scope in cost-benefit analysis.
Making E1st a common practice would require a cultural change along the whole chain of actors.
Cultural barriers are related to actors’ own habits and practices as well as about breaking silo thinking.
Other barriers specific to E1st relate to possible reasons why supply-side options might be given priority, disregarding demand-side options: these aspects are at the core of the E1st principle and complement the analyses done earlier on the background and definitions of E1st (see ENEFIRST 2020a) by emphasising why we need to think beyond existing energy efficiency policies.
Enshrined in EU legislation since 2018, efficiency first is a decision-making principle that gives priority to demand-side resources whenever they are more cost-effective from a societal perspective than investments in energy infrastructure, and should be applied systematically to energy-related investment planning. To date, it has yet to be effectively implemented systematically.
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.”
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
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.
