European Parliament Passes Law to Improve Energy Efficiency, Reduce Greenhouse Gases

BRUSSELS--The European Parliament on Sept. 11 approved energy efficiency legislation designed to help the European Union reduce energy consumption by about 17 percent by 2020, save up to $75 billion annually through reduced fuel imports, and meet greenhouse gas reduction targets.

The measure is also expected to boost employment because of renovation requirements for some public buildings.

Passed by a vote of 625-20, the legislation would require power companies to achieve new savings of 1.5 percent annually, averaged over three years, between 2014 and 2020. Companies would be required to complete a mandatory energy audit within three years of the measure's effective date and to repeat the process every four years.

The law would require “central” governments to renovate 3 percent of “total useful floor space” of public buildings that are larger than 500 square meters. In July 2015 the criterion would drop to 250 square meters. As part of a compromise reached with EU member states, regional and local governments would be exempted.

EU member states informally backed the plan in June and are due to rubber-stamp that decision Oct. 8 (35 INER 587, 6/20/12).

The law will then be published in the Official Journal and member states will be required to implement it into national legislation within 18 months.

Economic Boost Expected.

“This essential legislation is not only crucial for achieving our energy security and climate goals; it will also give a real boost to the economy and create jobs,” said Claude Turmes of Luxembourg, a European Parliament Green Party member who played a key role in getting the bill passed. “Policy at EU and national level must now be reoriented. … This includes mobilizing European funds such as structural funds [in the EU budget], project bonds [recently approved by the EU member states], and European Investment Bank funds.”

The legislation would require EU member states to complete a road map for achieving energy savings of 80 percent in the building sector by 2050 and to offer better consumer information including mandatory smart meters.

The legislation is part of the European Union’s “20-20-20” plan to reduce greenhouse gas emissions and dependence on foreign sources of energy. The plan calls for a 20 percent reduction in energy use via efficiency measures, a 20 percent cut in greenhouse gas emissions from 1990 levels, and a 20 percent renewable energy target, all by 2020.

Compromises Leave Gap.

However, the European Commission has calculated that based on compromises demanded by the EU member states, the energy efficiency legislation would achieve only a 17 percent reduction by 2020.

Some Parliament members have urged the European Commission to offer new legislative proposals to make up the 3-percentage-point difference.

“The European Commission needs to come out with the additional promised measures to close the remaining gap of 3 percent,” said Fiona Hall, a European Parliament member from the United Kingdom and the Liberal Democrat Party. “We need to get on with setting out a clear path for further energy savings and ensuring that member states stick to the measures and targets to which they have signed up.”

Environmental Groups Critical.

When the compromise between the EU member states and the European Parliament was first announced in June, the deal was blasted by environmental groups led by the World Wide Fund for Nature.

They were especially critical that requirements for power utilities had been weakened and the public building renovation requirements had been changed compared to the original European Commission proposal.

“This deal reflects neither the ambition nor the urgency needed to put the EU on the right path towards 2020,” said Arianna Vitali, an official with the World Wide Fund for Nature, in June. “EU member states need to wake up and realize that this deal is just one small step in creating the robust energy efficiency policies needed for the future.”

By Joe Kirwin