EU Commission Backs 30 Percent Energy Efficiency Target for 2030

31 July 2014

The European Commission has proposed a 30 percent EU-wide energy savings target for 2030, officials confirmed last week. The proposal is the third and final component of the draft 2030 climate and energy framework, which the bloc’s leaders are aiming to finalise this coming October.

The three-pronged climate and energy strategy would take effect from the end of this decade, and would be in place through 2030. The process of shaping this new framework has fuelled debate over what effect the potential strategies will have on job creation and sustainable and inclusive growth within the 28-country bloc, as well as what signals the final result may send for ongoing UN-level talks for a new global climate deal.

Level of ambition

After several weeks of lobbying and negotiation, the energy savings target proposed last week appeared to be for the EU as a whole, and does not currently refer to member state-specific reduction commitments. It was also not clear whether the target would be legally binding, with analysts suggesting that the measure appears not to be at this stage.

However, leaders may decide to make the target binding when they meet in October, along with finalising the other components of the climate and energy plan.

Whether to make the proposed target legally binding – along with the question of what the optimal energy efficiency goal should be – had sparked controversy among EU officials in recent weeks.

Some had warned against setting an even higher target – such as the rumoured 40 percent that was previously under consideration – given the significant investment and potentially uneven financial burden that would be required to achieve these efficiency gains. Current estimates place the cost of achieving the 30 percent energy efficiency target at a projected €89 billion annually.

European Commission President José Manuel Barroso had reportedly backed a more modest goal of 27-29 percent improvement in energy efficiency, citing concerns that larger cuts could undermine the EU’s Emissions Trading System, a mainstay in the bloc’s climate policy that has struggled to stay afloat due to an oversupply of carbon allowances.

Others, however, had suggested that having a less ambitious target will only perpetuate the EU’s energy dependence on outside sources, while at the same time failing to generate the cost savings to individuals that come from improved efficiency. Green groups have also suggested that a stronger target could lead to more jobs, not less.

“The Commission’s own research shows efficiency could also create three-and-a-half million jobs, while helping tackle climate change,” said Greenpeace energy policy adviser Frederic Thoma in a statement. “It’s a no-brainer that EU leaders cannot ignore. They must put Europe’s energy policy back on track.”

Incoming European Commission President Jean-Claude Juncker and current Climate Commissioner Connie Hedegaard had reportedly favoured a more ambitious energy savings target.

However, EU Energy Commissioner Günther Oettinger highlighted viability as a critical factor in support of the new target, suggesting that the result was a compromise measure designed to get a range of different actors on board.

“You need to have objectives that are achievable both in Bulgaria and in London. Member states of course can go further if they like,” Oettinger told reporters.

Furthermore, officials have said, the 30 percent target goes beyond the 25 percent energy savings that would be needed to meet the Commission’s proposed goal of a 40 percent reduction of greenhouse gas emissions by 2030, compared to 1990 levels. The latter was tabled in January by the Commission, which also suggested a binding renewable energy target of 27 percent.

Paris talks

Back in March, over a dozen EU ministers, which dubbed themselves the “green growth group,” had indicated that a “speedy EU agreement would be important to adding momentum to current UN climate talks,” referring to longed-for progress ahead of both the UN Climate Summit in September and the anticipated climate deal in Paris at the end of next year. (See BioRes 6 March 2014)

However, whether the final 2030 framework will be deemed sufficiently ambitious by the international climate community remains an open question, given that the January draft framework received heavy criticism in some quarters for “setting a very low bar” ahead of the 2015 Paris conference. (See BioRes 7 February 2014)

The tenor of domestic discussions on climate change has increasingly been in focus over the past few months, in light of the upcoming 2015 meeting. The debate has largely focused on the whether certain climate strategies can hurt economic growth or spur it forward, particularly given the long shadow cast by the global financial crisis.

Australia, for instance, recently repealed its controversial carbon tax, on the grounds that it was hurting job prospects and increasing the costs of living and doing business. (See Bridges Weekly, 17 July 2014) US President Barack Obama, meanwhile, has been undertaking a series of executive actions aimed at tackling climate change, having been unable to gain sufficient support on cap-and-trade legislation in Congress.

Energy dependence

Along with the question of climate change, another key issue for the EU has been on how to best reduce its high dependence on foreign energy sources. The Commission estimates that for every 1 percent increase in EU energy efficiency, gas imports will fall by 2.6 percent, a shift that it says would enhance energy self-sufficiency and security within the Union.

The worsening diplomatic – and economic – relationship between the EU and Russia in the wake of the Ukrainian crisis has further intensified the already mounting pressure in Brussels to increase energy security. 

Six EU member states depend solely on Russia for their gas imports and Russian gas and oil imports make up one-third of EU oil demand. This, along with the deep economic and trade ties between the two sides, has been partly blamed for the EU’s previous reticence to impose hard-hitting sanctions on Moscow in response to the latter’s handling of the Ukrainian crisis.

"Today the Commission is sending a strong message on energy efficiency: a 30 percent energy savings target for 2030,” said Hedegaard last week. “[This is] also good news for investors, and it’s very good news for Europe's energy security and independence. Meaning no such good news for Putin.”

Forecasts: 2020 target unlikely to be met

The Commission also presented last week its review on the progress made to date on the bloc’s 20 percent energy efficiency target for 2020. The EU’s 2020 climate and energy goals include a 20 percent cut in greenhouse gas emissions, together with ensuring that at least 20 percent of the bloc’s energy mix comes from renewable sources.

Under current forecasts, the energy savings are likely to be closer to 18-19 percent, much of which can be attributed to improved energy efficiency standards in modern buildings and more efficient appliances. The Commission has thus urged member states to “step up their efforts” to reach the previously agreed goal.

The European Commission is projected to evaluate progress related to the 2020 energy efficiency goal in 2017.

ICTSD reporting; “Europe proposes 30% energy savings target for 2030,” RTCC, 23 July 2014; “European Commission proposes a higher and achievable energy savings target for 2030,” EUROPEAN COMMISSION, 23 July 2014; “EU Sets 30% Energy Savings Target Under New Proposals,” THE WALL STREET JOURNAL, 23 July 2014; “EU Regulators Propose 30% Energy-Savings Target for 2030,” BLOOMBERG, 23 July 2014.

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