European Commission targets 30% energy savings by 2030 after last-minute wrangling
By Megan Darby
Europe should aim for energy efficiency savings of 30% by 2030, leading officials in Brussels say.
The European Commission proposed the target, which is set against business-as-usual projections, in a review published on Wednesday.
The goal is the last element of a three-part climate policy package for 2030 to be developed.
Draft proposals in January called for a 40% cut in carbon emissions and a 27% renewable energy target. The framework is still subject to negotiation and due to be finalised by October.
As well as playing a role in climate policy, energy efficiency has come to the fore in recent months as a means to reduce European reliance on Russian fossil fuel imports.
Tensions in the Ukraine, exacerbated by the shooting down of Malaysian airliner MH17 last week, have called into question a major supply route for oil and gas.
— Connie Hedegaard (@CHedegaardEU) July 23, 2014
Energy commissioner Gunther Oettinger said: ”Our proposal is the basis to drive the EU towards increased security of supply, innovation and sustainability, all in an affordable way.
“It is ambitious and at the same time it is realistic. The energy efficiency strategy will complete the 2030 framework on energy and climate which has been presented in January 2014.
“Our aim is to give the right signal to the market and encourage further investments in energy saving technologies to the benefit of businesses, consumers and the environment.”
The announcement was delayed due to last-minute wrangling over the level of ambition.
Climate commissioner Connie Hedegaard backed savings of 30% to 35% on 1990 levels.
Jean-Claude Juncker, who takes up the Commission presidency in November, also expressed his support for a target of 30% or more.
Current Commission president Manuel Barroso, on the other hand, favoured a target of 27% to 29%. He argued a higher target would undermine the emissions trading system – a market-based approach to cutting emissions through carbon pricing.
Marcus Ferdinand, head of EU carbon analysis at Thompson Reuters, explained: “A higher energy efficiency target would result in lower emissions. With lower emissions, European carbon prices would not incentivize the desired amount of abatement in the traded sectors. This bears the potential to downgrade the European carbon market from being the central pillar of European climate policy.”
According to Ferdinand’s projections, the 30% target will lead to an average carbon price of €15 a tonne between 2021 and 2030, 19% lower than under business as usual. This rises to €25/t if the Commission implements plans for a “market stability reserve” to combat an over-supply of carbon allowances.
He concluded: “The market stability reserve is outweighing by far the slightly bearish impact of the proposed energy efficiency target by supporting European carbon prices until the end of the next decade.”
— StollmeyerAlice (@StollmeyerEU) July 23, 2014
For every 1% energy saving, the Commission estimates EU gas imports will decrease by 2.6%, helping with energy security.
The announcement also highlighted the potential for energy bill savings from lower consumption and to create business opportunities in construction and equipment manufacture.
As well as proposing a level of ambition for future energy savings, the Commission reviewed member states’ performance.
At current rates of progress, the EU will miss its non-binding 2020 target of 20%. It is on course to achieve 18% or 19%, but the Commission said it would “act decisively” to get the bloc back on track.
However it has succeeded in breaking the link between economic growth and energy consumption.
Energy consumption stayed roughly flat across Europe between 1995 and 2013 while GDP grew by 34%.
New buildings today use half the energy of those built in the 1980s, according to the Commission. Energy intensity of European industry fell 19% between 2001 and 2011.