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EU Energy Efficiency Policy


In the last years, the European Union has already introduced several measures to increase energy efficiency:

Having rising oil, gas and electricity prices, the EU dependendy on energy imports and environmental issues like climate change in mind, governments and EU institutions became aware that these measures would not be enough to promote energy efficiency as part of the solution.

Therefore, the European Commission started a broad debate in 2006 with a Green Paper on Energy Efficiency:

  • save at least 20% of its present energy consumption by 2020, or the equivalent of €60 billion a year;
  • contribute to reducing Europe's dependence on oil and gas imports as prices of fossil fuels continued to surge;
  • be the quickest and most cost-effective manner to reduce greenhouse gases emissions and help the EU meet its commitments under the Kyoto Protocol on climate change.

According to the Commission, half of the savings mentioned in the paper could be met by simply improving the enforcement of existing legislation. The remaining 10% would need to come from innovative solutions, it said.

EU member states endorsed the Commission's proposals at their March 2006 summit and urged the Commission to follow-up with an action plan that is at the same time ambitious and realistic.


After several delays due to concerns within the Commission over implementation and timing, Energy Commissioner Andris Piebalgs finally presented his action plan in October 2006.

The plan's stated objective is to provide EU citizens with "the most energy-efficient buildings, appliances, processes, cars and energy systems" in the world. It identfies 75 specific actions in ten priority areas to be implemented over a six-year period:

  • New energy performance standards for product groups such as boilers, copiers, TVs and lighting (from 2007); 
  • new energy standards for buildings and promoting low-energy buildings ("passive houses") (2008-9);
  • making power generation and distribution more efficient (2007-8);
  • legislation to limit CO2 emissions from cars to 120g/km by) and strenghtened fuel-efficiency labelling;
  • facilitate bank financing for investments in energy efficiency by SMEs and energy service companies (2007-8);
  • boosting efficiency in new member states;
  • coherent use of taxation with the preparation of a Green Paper on indirect taxation in 2007;
  • awareness and education campaigns;
  • improving energy efficiency in urban areas through a "Covenant of Mayors" (to be created in 2007) which will exchange best practices, and;
  • international agreements to foster energy efficiency worldwide.

The action plan singles out the transport sector as the area with the most potential, as it is almost 100% dependent on oil and accounts for nearly 20% of total primary energy consumption in Europe.

On road transport, the Commission urged member states to agree on a harmonised tax regime for vehicles based on CO2 emissions. A proposal to introduce an EU-wide car tax based on CO2 emissions won backing from the European Parliament but unanimity voting in Council means the proposal is so far being blocked.

Suggestions to improve efficiency of urban transport will be put forward in a new Green Paper due in 2007. Possible measures there include making broader use of congestions charges, new approaches to encourage the use of public transport and car-sharing.

In a separate move, a proposal to include aviation in the EU CO2 trading scheme is expected to contribute to reducing pollution as well as fuel consumption from airplanes.



In their conclusions adopted on 26 November 2006, EU energy ministers generally supported the Commission's action plan. However, the Council insisted that any new proposal from the Commission should be subject to a comprehensive impact assessment that considers "in a balanced way the social, environmental and economic" consequences of legislation. The Council highlighted five priority actions for the Commission and member states:

  • Using an integrated approach to cut fuel consumption in cars, in cooperation with the automobile and fuel industries;
  • strengthening measures to cut consumption of household appliances, including stand-by loss (eco-design directive);
  • strengthen labelling for household products (Directive 92/75/EEC);
  • use R&D programmes at European and national levels;
  • continue work on implementation of the buildings directive.

Environmental NGOs reacted with dismay at the Council's "empty words" on energy savings. Friends of the Earth said the ministers had ducked out concrete commitments to cut energy waste by refusing to make the 2020 target legally binding. "The plan falls short in several sectors, especially in the transport sector. Friends of the Earth Europe continues to insist that the fuel efficiency of cars must improve and that mandatory targets are the only realistic way to achieve this."

The green paper received cross-party support in the European Parliament. In a joint statement, individual MEPs from five different political groups (EPP-ED, Socialist, ALDE, Greens/EFA, GUE/NGL) said a Europe-wide framework needs to be built to reap the economic and environmental benefits of energy savings. Together, they submitted a joint paper for an energy intelligent Europe for 2020.


Latest and next steps:

  • 23 Nov. 2006: Council adopts conclusions on the energy efficiency action plan
  • Dec. 2006: Commission proposal to include aviation in the EU CO2 trading scheme
  • 10 Jan. 2007: Commission "energy and climate change package" underlines energy efficiency as a priority
  • 7 Feb. 2007: Commission proposes strategy to cut CO2 emissions from cars
  • 30 June 2007: EU member states due to submit national energy efficiency action plans to the Commission as part of the directive on energy end-use efficiency and energy services.

EU Documents:

Source: European Commission, Euractiv