Energy Efficiency

The Energy Efficiency Directive (EED, 2012/27/EU) established binding measures to help the EU reach its initial target of a 20% gain in energy efficiency by 2020 compared to projected energy use. October 2014 the Conclusions of the European Council called the Commission to update the target with a 2030 perspective. “Accordingly, in November 2016, the European Commission (EC) adopted a proposal revising Directive 2012/27/EU as part of the “Clean Energy Package for All Europeans” comprising of initiatives focusing also on: energy performance of buildings; renewable energy post-2020; energy market design; energy governance, rules for the regulator ACER. This brought to a review of the EED in July 2018 that set an indicative target for 2030 at 32.5%.

FuelsEurope supports the goal of energy efficiency. However, the Directive’s key contribution has been in sectors that previously had no economic driver or signals to boost energy efficiency (rather than in already well-regulated areas). Indeed, according to the EED, Member States can choose between achieving energy savings through obligated parties (art. 7a), alternative measures (art 7b) or a combination of the two mentioned options. It should be kept in mind that for transport, an obligation scheme is not the best way to address efficiency: vehicle efficiency standards, labelling, taxation of road fuels, and measures to improve infrastructure are all used extensively and more effective means of tackling this complex area (see FE contribution on EEOS below). It is also important to keep flexibilities for Member States, allowing them to adopt the most suitable measures for the national situation, while focusing on least burdensome solutions.

Energy efficiency is an important focus for the EU refinery sector. Energy represents 60% of the overall costs of EU refiners, so any gain in efficiency reduces the industry’s bills. EU refiners have increased their efficiency by 13% over the past 22 years, despite greater product and emissions requirements that require more intensive processing. Climate and Energy Commissioner Miguel Arias Cañete has recognised that EU refining “has some of the most energy efficient and innovative refineries in the world”.

During the last legislative process FuelsEurope shared with the co-legislators the following opinions:

Energy Efficiency Targets

Energy efficiency (reduction in energy used per unit of production) is not the same as reducing absolute energy use.

FuelsEurope calls the EU to adopt a single, cost-effective, long‐term trajectory for carbon abatement. The Commission should seek to avoid overlaps with existing legislation, as these interfere with efforts to find cost-effective, market-driven solutions.

The association also advocated for a realistic 2030 target, indicatively not higher than 30%, as there is a large number of other binding measures foreseen in the directive and in other existing legislative acts. This target, for the sake of legislative certainty, should remain consistent with the terms applied to the 2020 target.

Therefore, in the revised Directive agreed in the summer 2018 Fuelseurope welcomed the indicative nature of the target and the measure of energy consumption in terms of primary or (not and, as initially requested by the Parliament) final energy. Such approach should help ensuring the continuation and legal certainty compared to the 2020 framework.

In order to achieve the Energy Efficiency target, Member States should be allowed a certain level of flexibilities. Indeed, they should be able to exclude from the calculations energy used in the industrial activities listed in the Annex I to Directive 2003/87/EC.

Indeed, Fuelseurope supported the Council position in this framework, which allowed exemptions in article 7.3 until a cap of 35% of the amount of energy savings. Indeed, energy intensive industries already have the strongest incentives and regulatory provisions (i.e. EU ETS, BREFs, etc.) to be energy efficient, thus it is also key that Energy Savings Obligation do not lead to double regulation and do not disturb the level playing field between Member States, based on their degree of “industrialization”.

Energy Efficiency Obligation Schemes (EEOS)

Transport should be excluded from mandatory EEOS. There are many successful examples of such schemes for traditional energy utilities in the EU and other parts of the world. But these depend on factors that do not apply to transport. Some are successful because they address energy suppliers via distributors, retailers or service companies that have strong relationships with their customers. These relationships are then used to offer services, incentives or projects that improve efficiency. Other schemes apply to utility electricity and gas suppliers that have “hard” piped or wired connections to customers. This means that they supply energy in a continuous manner, making consumption easy to measure. Some successful schemes include oil, but these must be carefully tailored to the particular supply process. Such a strong customer relationship does not exist in general for transport fuel supplies.

In this context, sales of energy used in transport should not be included in the calculations of energy savings as the required amount would be higher and this would incentivise MS to tackle transport fuel distributors with the EEOS obligation

FuelsEurope undertaken actions

Fuelseurope monitored carefully the issue, sending voting recommendations and statements from the Alliance of Energy Intensive Industries at different stages of the legislative process and organising advocacy meetings with key players involved in the revision of the Directive.