Energy Efficiency Directive: Potential for job creation and green growth – how is the European Parliament going to achieve it?

The negotiation on the upcoming Energy Efficiency Directive (EED) is at stake in the next coming months. I wrote in a previous article about the proposed text of the European Commission and how it will impact the building sector and I also promised to come with more updates.

Last fall, MEP Claude Turmes (the Rapporteur assigned in the European Parliament to lead the negotiations on this file) came with a much clearly defined legislative proposal on the binding measures to be implemented by the Member States in order to achieve the voluntary 20% energy efficiency target. The measures that have most impact on the building industry are the ones regarding the 3% yearly renovation target for public buildings (Art.4) and the Energy Efficiency Obligation Schemes that Member States have to put in place (Art.6).    The European Parliament (through its Rapporteur, MEP Claude Turmes) came with some significant changes that could transform the Directive in a powerful policy that would create jobs and stimulate green growth.

Why is the proposal of MEP Claude Turmes, more powerful?

It introduces a new article on Member States having to set in place financial facilities to aggregate multiple streams of financing, which would be the major source of funding for implementing the measures in the Directive. The article is essential since without securing proper funding, the implementation of the measures at the national level and the Directive’s potential for creating jobs and trigger innovation are questionable.

For the section on public buildings renovation ( Art.3a and Art.4) MEP Claude Turmes’ Draft Report:

• Sets as general objective for the Member States – to reduce by 31 Dec. 2050 the energy consumption of the existing building stock by 80% compared to the 2010 levels
• Member States should submit by January 2014 national plans that should include:
  • A record of buildings differentiated by category
  • Deep renovation targets for 2020, 2030,2050 differentiated per category of buildings (all buildings are included, not just the public owned)
• Priority  for deep and staged deep renovation should have:
  • Residential and commercial buildings with worst energy performance
  • Buildings that are owned or occupied by public authorities
• In order to implement the plans Member States shall ensure that starting with January 2014 at least 3% of the total floor area owned or occupied by public bodies is subject annually to deep or staged deep renovation (where deep renovation is defined as refurbishment that reduces both the delivered and the final energy consumption with at least 75%  and staged deep renovation  is a refurbishment that reduces in stages the delivered and final energy consumption of a building by a total of at least 75% during a normal renovation cycle, while ensuring that any stage does not preclude or increase the costs of subsequent stages)

Another important provision is also the one on Energy Efficiency Obligation Schemes – the supplier obligations.  According to the European Commission’s proposal Member States are supposed to set up an energy efficiency obligation scheme. This would oblige either all retailers or all energy distributors to annually save an amount of energy which equals 1,5% of their totally energy sales by volume in the previous year, but there are opt-out clauses. In his proposal, the Rapporteur wants the introduction of energy saving obligation schemes that would ensure that energy distributors and/or retail energy sales companies achieve cumulative annual end-use energy savings of at least 1.5% of their annual sales. The savings should be additional and to already existing programs and implemented measures and be accomplished among the final consumers.  Also Member States should ensure that the yearly energy savings of the obligated parties are achieved for at least 50% through long term saving measures such as deep renovation of buildings.

Next steps:

The European Parliament is expected to adopt its final position on the Energy Efficiency Directive in April. However the most challenging part will be the negotiations with the Council of Ministers (that represents the voice of national governments) that are supposed to happen also in the next coming months.

What do you think about the proposed measures for buildings? Will they stimulate the market? 

Do you see the deep renovation  and staged deep renovation standard (as they are defined now) achievable for public buildings in Romania?

Looking forward for feedback and opinions….

Anca Bieru