21.03.2023
THE EUROPEAN GREEN DEAL: EU AGREES ON STRICTER RULES TO INCREASE ENERGY EFFICIENCY
The European Commission welcomes the preliminary agreement reached between the European Parliament and the Council to reform and strengthen the EU Energy Efficiency Directive. This agreement marks another step towards the completion of the Fit for 55 package to implement the European Green Deal and the REPowerEU plan. It reaffirms the EU's determination to become climate neutral by 2050.
For the first time, the energy efficiency first principle is given legal force with a clear requirement that EU countries take energy efficiency into account when making policy, planning and major investment decisions in the energy sector and beyond.
The agreement includes the EU's first ever definition of energy poverty. Member States will now have to prioritize measures to improve energy efficiency among people affected by energy poverty, vulnerable customers, low-income households and, where applicable, people living in social housing. The revised rules put a stronger emphasis on reducing energy poverty and providing more rights to consumers, including the creation of a one-stop shop for technical and financial assistance and out-of-court dispute resolution mechanisms.
The agreement sets an EU energy efficiency target of 11.7% for 2030, which exceeds the Commission's initial proposal Fit for 55. It requires EU Member States to collectively deliver further reductions in final and primary energy consumption compared to energy consumption forecasts made in 2020
Under the preliminary agreement, the obligation for annual energy savings is almost doubled to ensure continued progress. EU countries will be required to achieve new savings of an average of 1.49% of final consumption each year from 2024 to 2030, compared to the current level of 0.8%. They will gradually have to reach 1.9% by the end of 2030. This is an important tool to stimulate energy savings in end-use sectors such as buildings, industry and transport.
The revised rules also place more responsibility on the public sector to increase energy efficiency. Public authorities will have to systematically take energy efficiency requirements into account when awarding public contracts for products, services, buildings and construction works. A new annual target to reduce energy consumption by 1.9% for the public sector is introduced. The obligation of EU countries to renovate at least 3% of the total built-up area of buildings owned by the public administration every year now also covers the regional and local level.
Businesses will be encouraged to be more energy efficient under the revised directive. First, energy management systems will become a default obligation for large energy users. All businesses, including SMEs, that exceed 85 TJ of annual energy consumption will have to implement an energy management system. Otherwise, they will be subject to an energy audit (if their annual consumption exceeds 10 TJ). A scheme for reporting the energy performance of large data centers is also being introduced for the first time.
Under the agreed rules, EU countries will have to promote local heating and cooling plans in large municipalities with a population of more than 45,000. In addition, with the revised definition of efficient district heating and cooling systems, the minimum requirements will be gradually changed to ensure a fully decarbonised supply of district heating and cooling systems by 2050. Support for new high-efficiency cogeneration units using natural gas and connected to district heating systems in efficient district heating and cooling systems, will only be possible until 2030, while any other use of fossil fuels will be prohibited for new heat generation capacities in such systems.
Next steps
The provisional agreement now requires formal approval by the European Parliament and the Council. Once this process is complete, the new legislation will be published in the Official Journal of the Union and come into force.
