EU energy saving law hit by amendments avalanche

Reuters News
Posted: Feb 09, 2012 4:18 AM
EU energy saving law hit by amendments avalanche

By Barbara Lewis

BRUSSELS (Reuters) - Plans to improve the European Union's record on energy saving risk stalling over hundreds of highly technical amendments, including one that could be good for Germany and its giant utilities, but bad for poorer nations.

Denmark has made moving towards a political deal on the EU's Energy Efficiency Directive a priority for its six-month tenure as president of the 27-member bloc.

It argues saving energy through measures such as better building insulation would create jobs and help to reduce reliance on imported fuel. It has placed the issue high on the agenda at a meeting of EU energy ministers in Brussels next week.

But improving efficiency is an intractable problem. So far, the EU is on course to achieve only half of its non-binding target to increase energy efficiency by 20 percent by 2020.

Draft energy efficiency legislation, as proposed by the Commission and grinding its way through the European Parliament, would impose binding measures, rather than binding targets, on EU governments. That means countries would have to submit national goals and if they did not achieve them by 2014, the Commission would consider imposing mandatory EU targets.

But even relatively soft targets are controversial.

"A one-size-fits-all approach would not be appropriate. Countries like Germany, where industries are already very efficient, have not so much potential to reduce as other countries with low efficiency," Holger Krahmer, a German Liberal member of the European Parliament, told Reuters.

He added he was opposed to binding targets, saying market forces, rather than regulators, should dictate.

Together with a group of Conservative politicians, he has put forward an amendment posted on the EU Parliament's website, which calls for the 20 percent energy savings goal to be reached either through a cut in primary energy use of 368 million tonnes of oil equivalent (Mtoe) or by a cut in EU energy intensity.

The intensity would have to fall to no more than 104 tonnes of oil equivalent per million euro gross domestic product expressed in 2005 prices in 2020.

Critics of the proposal say it could stymie any progress as it would be almost impossible for Europe's poorer nations to sign up, while nations' such as Germany would need to do very little and there would be no real reduction in energy use.

"An energy intensity target is a lose-lose situation," Brook Riley, climate justice and energy campaigner for Friends of the Earth, said. "It might not provide an adequate incentive to improve further."

"At the same time, the calculation based on dividing energy use by GDP would produce higher numbers for nations with negative GDP, making it much harder for them to lower their intensity," he said.

Environmental campaigners also cite what they view as other tactics to derail the process, including the 2,200 amendments which have delayed voting initially expected in January to February 28.

That could jeopardize the Danish deadline for getting political agreement during its presidency and mean the law would be steered by Cyprus, the next EU president, which is seen as less committed to the bloc's environmental agenda.


Energy efficiency is just one of a set of targets agreed by the EU in March 2007 when the holder of the EU presidency was Germany.

The two other targets on cutting carbon and increasing the share of renewables in the energy mix are binding, but the efficiency target is non-binding.

Advocates of binding goals cite their success. The EU is on track to meet the two binding goals, but there has been huge resistance to binding measures for the efficiency target and giant power companies, such as Germany's RWE and E.ON have little interest in efficiency gains, which would be likely to cut their profits.

The German government, still split on the issue of binding targets, is united on the idea of energy intensity and in November, the economics and environment ministry agreed to push for a measure based on energy efficiency per unit of GDP.

Energy Commissioner Guenther Oettinger has said the Commission is "at the limit of (its) credibility" unless it can make progress on a target established five years ago.

From the European Parliament, Claude Turmes, the vice president of the Greens who is leading the parliamentary debate on the draft law, has expressed similar views.

"Our credibility to speak about the long-term 2050 is near to zero if we are not able to fix legislation, which was presented in March 2007," he told a conference in Brussels this week on discussing the direction of policy beyond the 2020 goals.

Turmes has put forward an amendment on sharing out the cut needed in primary energy consumption of at least 368 mtoe to bridge the 10 percent gap between what the Commission has said will be achieved at the current rate of progress and the 20 percent target it has set. [ID:nL5E7ME1NC]

Turmes has said his proposal is based on consumption, as opposed to energy intensity, and takes projected economic growth into account, in line with the Commission view.

(Additional reporting by Ilona Wissenbach, editing by William Hardy)