The Ukraine crisis has triggered a focus on energy efficiency but divisions remain over the level of ambition
By Megan Darby
European leaders have directed officials to come up with an energy efficiency target for 2030, prompted by ongoing tensions between Russia and Ukraine.
The conflict over one of Europe’s key gas supply routes has given fresh impetus to the drive to cut energy consumption and dependence on imported fuels.
The European Commission is considering an energy saving target of between 27% and 35% by 2030, with the final proposals due out later this month. There are reportedly internal divisions over the level of ambition to recommend.
The leaders of European member states stressed the importance of energy efficiency at a European Council meeting last Friday.
A note on the conclusions of the talks stated: “Geopolitical events, the worldwide energy competition and the impact of climate change are triggering a rethink of our energy and climate strategy. We must avoid Europe relying to such a high extent on fuel and gas imports.
“To ensure our energy future is under full control, we want to build an Energy Union aiming at affordable, secure and sustainable energy. Energy efficiency is essential, since the cheapest and cleanest energy is that which is not consumed.”
Despite the endorsement from national leaders, some parties are reluctant to commit to an ambitious target as this could undermine the role of carbon pricing.
Sources close to the matter say climate commissioner Connie Hedegaard is pushing to cut energy consumption by 30% to 35% compared to business as usual projections.
These two options are included in a draft proposal seen by RTCC, although commission president Jose Manuel Barroso is arguing for a 27% target.
According to the draft proposal, the 30% option would maintain the momentum from this decade’s drive for a 20% energy efficiency saving.
The bloc is presently on track to deliver 18% to 19% by 2020, but officials say in the draft document: “After years of hesitation, Europe’s energy efficiency policy is starting to deliver.”
An alternative wording recommended increasing the rate of effort, “taking into account the increased importance of energy efficiency in the context of the European Energy Security Strategy, and the important role that energy efficiency can play in promoting growth and jobs”. That line was dropped from a later draft.
The 27% figure, meanwhile, is closer to the indicative level in the 2030 climate and energy framework documents published in January.
That package targeted a 40% cut in greenhouse gas emissions and a 27% share of renewables in the energy mix. It did not specify an energy efficiency target but suggested that the most cost-efficient level of savings was 25%.
Carbon price trade-off
One reason given for aiming lower on energy efficiency is that a high target would undermine the carbon price set by the emissions trading system (ETS).
There are separate measures under development to make the ETS more effective. A proposed market stability reserve would withhold pollution permits from the market at times of surplus, boosting the price.
The carbon market was intended to reduce emissions as efficiently as possible. Yet the price of allowances is chronically low, at around €5, making it a weak signal for low carbon investment. Advocates of the ETS blame the industry-specific renewables and energy efficiency targets for undermining the market.
Brook Riley, director of EU climate policy for Friends of the Earth, acknowledged the trade-off, but said energy savings and renewables should not be sacrificed to focus on the ETS.
“Why not do the smart thing and go for a higher greenhouse gas target which would require all the policy options to pull their weight?” he said.