Energy Efficiency Policies in the European Union
i
Energy Efficiency Policies in the European Union
ii
Energy Efficiency Policies in the European Union
Acknowledgements
This publication on energy efficiency and policy monitoring was prepared within the
ODYSSEE-MURE project coordinated by ADEME. It is financed under the Intelligent Energy
Europe Programme with the support of 29 national institutions from 25 EU Member States,
Norway and Croatia, generally with co-funding from their own governments. This study would
not have been possible without the active participation of the national teams and their
associated partners in terms of data supply. This brochure was prepared by Barbara Schlomann and Wolfgang Eichhammer from the
Fraunhofer Institute for Systems and Innovation Research Fraunhofer ISI. All the
information on energy efficiency indicators is taken from the MURE database and website,
managed by ISIS in Italy and Fraunhofer ISI in Germany. This synthesis report draws on
three sectoral reports written by MOTIVA industry, AEA Technology Transport and
Fraunhofer ISI buildings. Among the many participants in the ODYSSEE-MURE network, particular thanks are due to1
Reinhard Jellinek AEA, Austria, Yvonne Baillot and Francis Altdorfer Econotec, Belgium,
Ludmil Kostadinov EEA, Bulgaria, Helena Bozic, Branko Vuk and Dino Novosel EIHP,
Croatia, Kyriatos Kitsios CIE, Cyprus, Jiri Spitz Enviros, Czech Republic, Peter Dal DEA,
Denmark, Sulev Soosaar TUT, Estonia, Martin Howley and Emer Dennehy SEAI, Ireland,
Pier Giorgio Catoni and Giulia Iorio ENEA, Italy, Saara Elväs and Lea Gynther Motiva,
Finland, Gregory Chedin ADEME, France, Lazlo Elek ENCEN, Hungary, Barbara
Schlomann and Wolfgang Eichhammer Fraunhofer ISI, Germany, Minas Iatridis CRES,
Greece, Gaidis Klavs IPE, Latvia, George Cassar MRA, Malta, Joost Gerdes and Piet
Boonekamp ECN, the Netherlands, Eva Rosenberg IFE, Norway, Ryszard Wnuk KAPE,
Poland, Grazyna Berent-Kowalska and Szymon Peryt GUS, Poland, Antonio Almeida
ADENE, Portugal, Maria Rugina Icemenerg, Romania, Jan Magyar SIEA, Slovak
Republic, Fouad Al Mansour JSI, Slovenia, Pilar de Arriba Segurado IDAE, Spain, Linn
Stengård, Helen Lindblom, and Annika Persson STEM, Sweden, Anne Wagner AEA
Technology, United Kingdom. The author wishes to give special thanks to Joost Gerdes, Pilar de Arriba Segurado, Francis
Altdorfer, Grazyna Berent-Kowalska, , Emer Dennehy, Joost Gerdes, Lea Gynther, Martin
Howley, Reinhard Jellinek, Gaidis Klavs, Szymon Peryt and Sulev Soosar for their valuable
comments and review of the draft of the report. Finally, we extend our thanks to Timothée Noel from the Intelligent Energy for Europe
Programme IEE for his support and belief in this project and his encouragement and
advice. Didier Bosseboeuf
Project leader
1 Alphabetic order of countries
iii
Energy Efficiency Policies in the European Union
iv
Energy Efficiency Policies in the European Union
Key Questions and Messages
This publication presents and analyses the policies implemented in the buildings, transport
and industry sector in the European Union, its Member States and Croatia and Norway. It
mainly relies on the MURE database with policy measures on energy efficiency, covering all
EU countries plus Croatia and Norway and also includes the quantitative impact of the
measures www.muredatabase.com. The tool can be used to support energy policy
formulation by the European Commission, e.g. as part of the monitoring and evaluation of the
National Energy Efficiency Actions Plans submitted under the Directives on End-use Energy
Efficiency and Energy Services ESD and under the new Energy Efficiency Directive EED. This section lays out the key questions and messages from a cross-cutting view on energy
efficiency in the EU and from the three sectoral reports. Energy Efficiency Policy in the EU
The EU has considerably further developed over the past years the frame for energy
efficiency policies.
The most important initiatives relevant for energy efficiency
include
o
o
o
o
the Effort Sharing Decision 4062009EC 2009
the EU-Energy Strategy 2020 November 2010
the Energy Efficiency Plan 2011 reemphasizing the indicative 20 energy
efficiency target and stating that the EU is on track only to achieve only half it
the Low Carbon Roadmap 2050 incl. long-term GHG reduction objectives
March 2011 the Energy Roadmap 2050 Dec. 2011 exploring how long-
term GHG targets can be reached while also ensuring security of supply and
competitiveness. o The new Energy Efficiency Directive EED from October 2012.
a new for TV. the scope
It is expected that the EED, due to the fact that its impacts were diluted in a lengthy
discussion process with the Member States, will not be fully able to achieve the 20
saving target but only around 15 -17 requiring further policy development already in
2014 after the evaluation of progress by the Commission. The main question around a future target system for energy efficiency beyond 2020 is
whether the present target triad GHG emissions, renewables and energy efficiency
should be further developed or whether there should be a single headline target to
improve energy efficiency and which one. v
Energy Efficiency Policies in the European Union
Buildings Sector
The building brochure, while providing a general view on energy efficiency policies in the
buildings sector, focuses on important issues and questions of energy policies directed
towards financing the energy efficient transformation of the built environment. From
the study presented in the building brochure, the following key messages emerge
How large are the energy efficiency potentials in the building sector including both
the building energy uses and the electric appliancesequipment? Previous studies have shown that up to 2020 economic potentials exist of the order of
255 Mtoe in terms of final energy that could contribute largely to the 20 primary
energy target of the EU Commission. In fact, considering that the primary energy
target has been formulated before the economic crisis, realizing this economic
potential would be sufficient alone to reach the target. Buildings including appliances contribute with 80 Mtoe residential sector and 35
Mtoe tertiary sector roughly 45 of the target but due to the long investment cycles
the contribution of building beyond 2020 and in particular up to 2050, is far greater. How large are the upfront-investment required to mobilize these potentials?
In order to realize those economic potentials substantial upfront investments are
necessary despite the fact that the investments will pay largely off in the future. The required
for
investments
the built environment differ according
the
assumptions, especially with respect to the question whether differential investment
compared to a less energy efficient solution of full costs have to be considered which
is a matter of debate when it comes to an increase of the present refurbishment rates
beyond the autonomous rates. In case that full costs are considered for all investments outside the present
investment cycle, upfront investments up to 2020 are of the order of 800 billion Euro,
or roughly 80 billion Euro annually. to
Which individual policies already address financing needs for the energy efficient
transformation of the built environment and what is their role in the context of other
instruments? What role for private sources of financing? The report discussed the pros and cons of the main present financing tools to provide the
required upfront investments
State budgets this is for example the case of a number of subsidy programmes
described in the MURE database such as the KfW programme in Germany. The large
drawback of this type of financing is that in times of tight budgets it will be difficult to
find the additional investments as the costs cannot be easily passed on to the tax
payers although the energy savings will at the end relieve the pressure on the
economy from reduced energy costs. It seems unlikely that through this path all the
investment needs identified in the building sector could be covered. The advantage of
this type of financing is that the means can be directed towards deep renovations. Financing from state-like budgets, e.g. the use of income from the emission trading
scheme to finance energy efficiency investment. The drawback of this financing
source is that it is heavily dependent on the CO2 price, the advantage that is
independent from the direct state budget. However, the temptation is large for
governments to use such income not in a dedicated manner for energy efficiency
options. In order to finance the large investment volumes required for building
rehabilitation, the CO2 price should be considerably higher than present levels in
order to contribute substantially to the annual investment needs identified above. Leveraging of private investments from companies in the energy sector through
energy saving obligationsWhite Certificates This has the advantage in opening new,
more stable, financing sources. At the end the cost will be passed on to the
vi
Energy Efficiency Policies in the European Union
consumer. The advantage is that private investments are leveraged and that energy
companies may possibly develop into energy service companies. The disadvantage
is that, if no special provisions are taken, mainly shallow refurbishments are
undertaken. Leveraging of private investments from through energy service companies
Here the charge is totally on the private sector. The investor gets his money from the
reduced energy cost of the client. This has the advantage that markets are developed
for energy services and that the energy consumer is in principle not charged
additionally and may even get a small reduction in energy cost during the phase
when the investment is paid off. At present, mainly energy conversion options or
options that pay off rapidly are financed in such a way boilers, HVAC systems,
building control systems etc. while deep renovations including the building envelope
are rather rare due to the long payback time. An option may be to subsidise the
payback to a rate interesting for the energy service companies. The report cites
examples such as the EPC Plus approach proposed by the Berlin Energy Agency,
how deep renovation can be achieved through contracting in combination of other
sources. Also risk mitigation is an important aspect where the state generally plays a
role. Financing through a levy on energy consumption Feed-in tariff for energy
efficiency this innovative policy design is in principle similar to the promotion of
renewable through feed-in tariffs while energy saving obligations are the equivalent
to quote systems for renewable - and has the substantial advantage of financing
stability and risk-lowering. On the other hand, given the fact that renewable already
charge heavily especially electricity prices in some countries, it may be difficult to levy
in the same way the large investments for refurbishing existing buildings. However, in
difference to renewable, where first the costs are positive and serve to pay their cost
down along the cost degression curve, energy efficiency options provide after some
time, benefits to the consumers due to lower energy bills. Also the energy
consumption on which the costs for energy efficiency investments are charged should
cover a much larger range than just electricity consumption but also fossil fuel use. Combining different sources in an Energy Efficiency Fund one last important
possibility of generating the funds necessary for the large investments is combining
different sources discussed in the previous point in a general energy efficiency funds,
such as the EU Energy Efficiency fund but at a much larger level of volumes. Combining the sources would have the advantage of taking the largest basis
possible, though, in most cases, the final consumer would carry the charges in some
way.
Energy efficiency
innovative
flexibility
technologies and solutions than other financing sources. funds offer more
in promoting
How can the state fulfill its exemplary role with respect to energy efficiency
improvement as requested by the Energy Efficiency Directive? The discussion in the report on the exemplary role of the public sector for buildings brings
three major aspects to the focus
The scope for low-cost measures in the public buildings and their large
potential which is well-illustrated in the report with the case of Ireland and the
activities of the Office for Public Works in Ireland. The limits of the approach when it comes to investments, and in particular
investments into the building envelope with comparatively large sums and longer
periods of return, also illustrated with the example of Ireland.
The emerging role of Energy Service Companies ESCOs to build the bridge
beyond the public budgets but which is not without difficulties, especially when it
comes to finance deep renovations including the building envelope with its long
payback periods. vii
Energy Efficiency Policies in the European Union
Are there social impacts linked to the introduction of such policies? How to tackle
such social impacts? There is no doubt that increasing energy prices do and will have strong social impacts
fuel poverty. It is also without doubt that policies that mobilizing the large investments could also
have impacts on some part of the population. The distributional impacts largely depend on the policy instruments and its design
while tax reliefcredits mitigates to a certain degree the distributional impacts as taxes
are paid according to the income, most other instruments, in particular those that
charge the investment costs finally to the consumer of energy lead to distributional
effects among consumers. Especially low income consumers may require particular measures to support their
transition to a more efficient energy use. Which innovative policies could be designed to finance investments in energy
efficient buildings? From the discussion of innovative building polices in the building report the following
message are derived
Innovative approaches to finance building rehabilitation should have the substantial
advantages of financing stability and risk-lowering
Such features may be characteristics of an energy efficiency levy or Energy Efficiency
Feed-in tariffs FiTs. This is in principle similar to the promotion of renewables
through feed-in tariffs while energy saving obligations are the equivalent to quota
systems for renewable. Given the fact that renewables already charge heavily especially electricity prices in
some countries, it may be difficult to levy in the same way the large investments for
refurbishing existing buildings. However, in difference to renewable, where first the costs are positive and serve to
pay their cost down along the cost degression curve, energy efficiency options
provide after some time, benefits to the consumers due to lower energy bills. Also the energy consumption on which the costs for energy efficiency investments
are charged should cover a much larger range than just electricity consumption but
also fossil fuel use. Levying 6 annually would raise between 70 and 100 billion Euro annually, hence
enough to cover the financing needs for the building investments. Which policy combinations may mobilize the required large upfront investments? The report identifies some coherent combinations of policy instruments which describe an
increasing perimeter covered by the instruments and could be able to provide in principle
with more or less barriers - the large upfront-investments specified earlier
Policy Path 1 a combination of regulation and financial incentives based on state
budgets
Policy Path 2 a combination of regulation, financial and fiscal incentives
Policy Path 3 a combination of regulation, financial and fiscal incentives and saving
obligation schemes
Policy Path 4 a combination of regulation, fiscal incentives and an energy saving
trust
Policy Path 5 a combination of regulation, fiscal incentives, energy saving trust and
saving obligation schemes
Policy Path 6 a combination of regulation, financial and fiscal incentives, energy
saving trust and saving obligation schemes
viii
Energy Efficiency Policies in the European Union
In summary solutions exist to cover the large investment needs for the built
environment.
However, Member States and the EU need to design stable mixtures of
policy instruments, depending only partially on state budgets in order to provide the
required long-term stability to investors in efficient buildings, including deep
renovations. Transport Sector
The transport brochure discusses the need for a sustainable hierarchy for measures to
improve energy efficiency in transport, while providing detailed insight into the elements of
such a sustainable hierarchy. From the study presented in the transport brochure, the
following key messages emerge
Why there is a need for a sustainable hierarchy for measures to improve energy
efficiency in transport? There is a growing realisation that a focus on improving the efficiency of vehicles is
only part of the solution in the transport sector. A more holistic approach involving the
reduction of transport demand and the shift of transport to more environmentally
friendly and energy efficient modes is needed if the European Union is to meet its
2030 and 2050 targets.
However very few EU Member States presented a comprehensive package of
transport measures in their National Energy Efficiency Action Plans NEEAPs. What elements are part of the sustainable hierarchy? The most commonly implemented policies at Member State level are those that seek
to improve the efficiency of vehicles or encourage the purchase of cleaner vehicles. Other measures seek to encourage modal shift or change driver behaviour. The majority of policies focus on cars improving the efficiency of cars, encouraging
the take-up of energy efficient cars and changing the behaviour of car drivers. This
focus on cars may be partly due to the homogeneous nature of cars. However, cross-cutting measures such as voluntary agreements and white
certificates are now being applied to other vehicle types, and may be more
appropriate than codes and standards when dealing with heterogeneous technologies
like heavy goods vehicles HGVs. Vehicle efficiency improvement measures are predominantly implemented at EU level
through regulations targeted at vehicle manufacturers. There are also some novel
policies at the national level, particularly on HGVs and public transport vehicles,
including the introduction of longer road trains and voluntary agreements with freight
logistics companies. What are main lessons from the different measures introduced to implement the
sustainable hierarchy to improve energy efficiency in transport? Modal shift can play an important role in reducing energy consumption and
greenhouse gas GHG emissions from transport. Measures include enhancements
to public transport provision, fiscal incentives to encourage the use of public transport
or non-motorised modes, differential toll charges, the promotion of walking and
cycling, and urban mobility planning. Measures to encourage the uptake of cleaner vehicles include labelling, taxation and
infrastructure charges, grants and subsidies and scrappage schemes. Differentiation
of car purchase tax by fuel efficiencyCO2 emissions have now been introduced in
almost two-thirds of Member States, but differentiation of annual circulation taxes is
less common. ix
Energy Efficiency Policies in the European Union
Scrappage schemes for older inefficient cars, have been introduced quite widely
across the EU, although often for relatively limited periods. Many of the schemes also
provide incentives for the purchase of new cars, often stipulating CO2 performance
standards which must be met. Measures to promote the uptake of electric vehicles have expanded substantially in
the last few years, and seek to combat the most common barriers, high capital cost
and lack of charging infrastructure. Changing driver behaviour to encourage more fuel efficient driving is widely
recognised as potentially offering significant savings, and several countries have
introduced training courses and awareness raising campaigns for both car drivers
and freight, and bus and coach drivers. Increasing the utilisation of vehicles, e.g. through car sharing, can also contribute to
improving the overall efficiency of passenger transport, and is typically encouraged
though a range of soft measures to change driver and passenger behaviour. In summary there is an urgent need in many EU Member States to develop
comprehensive packages of transport measures in their National Energy Efficiency
Action Plans despite the fact that the Directive on Energy Efficiency provides
possibilities to exempt this sector from the target setting process. Industry Sector
The industry brochure is looking for answers to the following policy issues in industry
How well do EU and national policies and measures currently conform to the
internationally recognised policy priorities for the improvement of industrial energy
efficiency and how much additional effort is needed? The question concerns, e.g. IEA
recommendations for industry. Particular focus is placed on the analysis of the
different aspects of energy management and measures addressing small and
medium sized enterprises SMEs. the Energy Efficiency Directive and
The Energy Efficiency Directive proposes a set of measures e.g. energy efficiency
obligations, mandatory audits and certification qualification schemes which
represent an ambition level quite far from the current implementation status of these
measures in Europe, requiring massive additional effort from the Member States. How well do the national policies and measures address energy efficiency drivers in
industry? There is no clear correlation between the impact level of the measures and the
measure types. Both high-impact and low-impact measures are of various types. The
situation reflects the varying relative importance of energy efficiency drivers. The focus on energy management in most countries is increasing among the
measures but not in pace with the emphasis given to it by, e.g., the EU policy, IEA
energy efficiency recommendations and the international standardization bodies. While several energy efficiency measures are already in place for SMEs, more
tailored programmes are needed to address their special needs. There is an increasing need for energy advice in all sizes of industry and there is a
need to step up activities in the area. Are there innovative measures which address the drivers well? Though there are innovative measures in the industry sectors, the most successful
measures combine the following four elements
x
Energy Efficiency Policies in the European Union
Energy management
High-efficiency industrial equipment and systems
Energy efficiency services for SMEs
Complementary policies to support industrial energy efficiency
Is there adequate packaging of measures? There appears to be quite wide general consensus in the international energy
efficiency fora on the importance of using multiple policy instruments in order to
address the variable barriers for energy efficiency. Yet, it is not uncommon that
countries rely on a rather limited mix of policies and measures. Economic incentives are frequently used to address financial drivers. Negotiated and
voluntary agreements have a significant policy status on some countries. Norms and
standards as well as various obligations have not been used extensively. Use of
information measures has grown but not as much as could be expected given the
need to further energy management. Two types of measure packages can be identified from the MURE database and the
NEEAPs. Sometimes several independent measures also work together. In other
cases different types of instruments have been included in one overarching measure.
Both approaches are common. Does the financial and economic crisis already have a visible impact on policy design
and implementation? The impact of the economic and financial turmoil since mid-2008 could not yet be
seen on the types of measures implemented as of beginning of 2012. However, there
are indications that financial measures are being cut as the recession has continued. What is the level of monitoring and evaluation of measures? Conscientious monitoring and evaluation schemes are most common in measures
involving tax exemptions. Other well monitored measures are subsidy schemes, audit
programmes, voluntarynegotiated agreements and legislative initiatives related to
energy management. Systematic monitoring and evaluation of other measure types is
less common. Given the significance and expectations placed on Emissions Trading, what is the role
of other measures in industry? Emission trading provides in principle an economic signal. However in the industry
sector a large number of non-economic barriers persist such as split incentives e.g. inefficient electric motors are integrated into machines and sold in a package to the
user where the energy consumption occurs. Those non-economic barriers require
particular instruments such as energy audits or specific agreements among industrial
equipment suppliers and users. As long as the price signal from the ETS is extremely low, there is a specific need for
financial programmes to promote energy efficient investments in the industrial sector. In summary in quite many countries the policy mix needs to be balanced better to
address the multiple drivers of energy efficiency in industry.
Quite many countries
apply only a couple of measure types, often mainly those addressing financial drivers. xi
Energy Efficiency Policies in the European Union
Table of contents
Key Questions and Messages
1
2
3
4
5
Introduction ................................................................................................................ 1
Energy Efficiency Policy in the EU - a cross-cutting view ...................................... 4
2.1 Energy efficiency policies in the EU ..................................................................... 4
2.2 Major provisions from the recent EU Directive on Energy Efficiency 201227EU 6
2.3 Possible future developments in the EU target system for energy ........................ efficiency beyond 2020 ........................................................................................ 7
Energy Efficiency Policies in the EU Buildings Sector ...........................................10
3.1 Financing measures in the portfolio of energy efficiency policies in the ................
building sector ....................................................................................................10
3.2 Energy efficiency policies addressing space and water heating in buildings .......12
3.3 Policies addressing electricity consumption in buildings .....................................18
3.4 Quantitative impact of NEEAP measures in buildings.........................................22
3.5 Designing efficient policy packages in the building sector addressing .................. the financing needs and policy interactions ........................................................24
3.6 Conclusions .......................................................................................................29
Energy Efficiency Policies in the EU Transport Sector ..........................................31
4.1 Sustainable hierarchy for transport measures ...................................................31
4.2 Modal Shift ........................................................................................................35
4.3 Vehicle Efficiency ..............................................................................................39
4.4 Encouraging Uptake of Cleaner Vehicles ..........................................................41
4.5 Driver Behaviour ...............................................................................................47
4.6 Conclusions ......................................................................................................50
Energy Efficiency Policies in the EU Industry Sector .............................................52
The portfolio of industrial energy efficiency measures .......................................52
5.1
5.2
Industry measures in the NEEAPs ....................................................................59
5.3 Packages of measures ......................................................................................64
5.4 High-impact measures ......................................................................................66
5.5 Conclusions ......................................................................................................68
6
References .................................................................................................................71
xii
Energy Efficiency Policies in the European Union
List of Figures
Figure 2-1 Options for the future target system for energy efficiency, renewable .............. and greenhouse gas emissions ...................................................................... 9
Figure 3-1 Energy efficiency policy measures in MURE in the residential and .................. tertiary sector by targeted end-uses ...............................................................11
Figure 3-2 Measures addressing residential and tertiary buildings by type .....................12
Figure 3-3 Semi-quantitative measure impacts for spacewater heating in buildings .......16
Figure 3-4 Semi-quantitative impact of measures addressing electricity in buildings.......21
Figure 3-5 Distributional effects of important energy efficiency policies ...........................27
Figure 4-1 Sustainable Hierarchy for Transport Measures ..............................................31
Figure 4-2 Types of measures implemented ...................................................................34
Figure 4-3 Main aims of ongoing measures ....................................................................34
Figure 5-1 On-going Measures by Type and by Country .................................................53
List of Tables
Impact evaluation of selected energy efficiency measures in the EU .............. 6
Table 2-1
Table 3-1
Comparison of European financial incentive systems ....................................14
Table 3-2 Design features of present energy efficiency obligations schemes ................15
Financialfiscal measures for electricity consumption in buildings ..................19
Table 3-3
Final energy saving in the building sector reported in the 2nd NEEAPs .........22
Table 3-4
Cumulative energy efficiency investments billion 2005 and energy .............
Table 3-5
savings ..........................................................................................................24
Table 4-1 Member States identified as having good practices in NEEAPs ...................35
Table 4-2 Date of introduction of differentiated tax rates ................................................43
Summary of existing scrappage schemes ......................................................47
Table 4-3
EU Measures for Industry in the MURE Database .........................................54
Table 5-1
The Minimum Levels of Taxation Applicable to Fuels for Industrial Use .........55
Table 5-2
Interaction between Driving Forces and Different Types of Policies ...............65
Table 5-3
List of Boxes
Box 1-1
Box 4-1
Box 4-2
Box 5-1
Box 5-2
MURE database ............................................................................................. 1
IEA Recommendations on Transport Energy Efficiency .................................32
Definition of electric vehicles ..........................................................................45
Industry-relevant Provisions in the Energy Efficiency Directive 201227EU ..57
IEA Recommendations for Industry Energy Efficiency ...................................69
xiii
Energy Efficiency Policies in the European Union
1 Introduction
The aim of this brochure is to provide insight into energy policy measures in each end-use
sector in the EU industry, transport and buildings, as well as at the overall policy level. It
summarises three sectoral reports on industry, transport, buildings that are available on the
ODYSSEE web site www.odyssee-indicators.org. This should help policy makers and other
parties involved in energy efficiency and CO2 emission reduction to adapt current policies
and to define new, effective policy measures. Although the main focus is on the improvement
of energy efficiency, other drivers affecting the energy demand trend -such as industrial
growth, structural changes, lifestyle changes - are also considered. The main basis for the analysis is the MURE database including policy measures on energy
efficiency, covering all EU countries plus Croatia and Norway see Box 1-1. A more detailed
analysis of data on energy trends, drivers for energy use, explanatory variables and energy-
related CO2 emissions in the transport sector is contained in a further report from the
ODYSSEE-MURE Project2. Box 1-1 MURE database
The MURE database www.muredatabase.com provides an overview of the most important
energy efficiency policy measures in the EU Member States, Norway, Croatia and the EU
itself. The database is structured by final energy consumption sectors household, tertiary,
industry, transport and also includes a general cross-cutting section. At the level of sectors,
the focus is on single policy measures in order to allow a specific analysis of each measure. More general programs comprising several measures are mainly described in the cross-
cutting section of MURE. The homogeneity of the measure descriptions over sectors and
countries is ensured by detailed guidelines Schlomann Eichhammer 2011. All measures
are classified according to specific keywords, thus allowing queries based on criteria as e.g. their status completed, on-going or planned
their year of introduction and completion
their type legislativenormative e.g. standards for new dwellings, legislativeinformative
e.g. obligatory labels for appliances, financial e.g. subsidies, fiscal e.g.
tax
deductions, informationeducation, cooperative e.g. voluntary agreements and taxes
on energy or CO2-emissions
the targeted end-uses and the main actors involved by the policy measures
their semi-quantitative impact low, medium or high impact, based on quantitative
evaluations or expert estimates
the end-uses involved and the quantitative impact of the policy measure related to a
specific end-use if this information is available
2 ADEME 2012 Energy Efficiency Trends in the Transport Sector in the EU Lessons from the ODYSSEE MURE project, March 2012
1
Energy Efficiency Policies in the European Union
The MURE database www.muredatabase.com provides an overview of the most important
energy efficiency policy measures in the EU Member States, Norway, Croatia and the EU
itself. The database is structured by final energy consumption sectors household, tertiary,
industry, transport and also includes a general cross-cutting section. At the level of sectors,
the focus is on single policy measures in order to allow a specific analysis of each measure. More general programs comprising several measures are mainly described in the cross-
cutting section of MURE. The homogeneity of the measure descriptions over sectors and
countries is ensured by detailed guidelines Schlomann Eichhammer 2011. All measures
are classified according to specific keywords, thus allowing queries based on criteria as e.g. their status completed, on-going or planned
their year of introduction and completion
their type legislativenormative e.g. standards for new dwellings, legislativeinformative
e.g. obligatory labels for appliances, financial e.g. subsidies, fiscal e.g.
tax
deductions, informationeducation, cooperative e.g. voluntary agreements and taxes
on energy or CO2-emissions
the targeted end-uses and the main actors involved by the policy measures
their semi-quantitative impact low, medium or high impact, based on quantitative
evaluations or expert estimates
the end-uses involved and the quantitative impact of the policy measure related to a
specific end-use if this information is available
For each policy measure a detailed description is available in MURE. The MURE database
further provides EU Member States with a structured format to report on measures taken
under the National Energy Efficiency Action Plans requested by the European Commission in
compliance with the Energy Service Directive ESD. Two additional categories have
therefore been added to the MURE database
If a measure is included in the National Energy Efficiency Action Plan under the EU
Energy Efficiency and Service Directive ESD 200632EC, it is classified as NEEAP
measure in the MURE database. This allows an easy identification of policy measures
reported in the NEEAPs and a specific analysis of these policies. In order to separate of EU-wide measures which are common to all countries mainly EU
Directives from pure national measures, a set of EU measures was defined in the
MURE database
In addition, the MURE simulation tool, which is linked to the database, was used by the EU
Commission to assess the energy saving potentials over the period 2010-20303. The building sector, as it is subject of this chapter, refers to two main categories of buildings
residential buildings and non-residential buildings4. Whereas residential buildings are
relatively homogenous and can further be divided into singletwo-family houses and
apartments blocks, non residential buildings are more heterogeneous. They refer to buildings
in the service or tertiary sector and include several building categories esp. office buildings,
hospitals, schools and universities, hotels and restaurants, buildings in wholesale and retail
trade. The energy use in buildings shows different consumption patterns with regard to space and
water heating on the one hand and electricity without electricity consumption for space and
water heating on the other hand see Enerdata 2012. This is also reflected by the often
3 DG TREN 2009 Energy Savings Potentials in EU Member States, Candidate Countries and EEA Countries
4 With regard to the sectoral structure of MURE, the building sector can be more or less equated with the residential and tertiary sector in the
MURE database including electric appliances in both sectors. 2
Energy Efficiency Policies in the European Union
different policy measures addressing these final end-uses. Therefore, a further subdivision
of the building sector by end-uses is useful. In the following, the building sector is subdivided
by the following end-uses
Space and water heating, both including residential and tertiary buildings in tertiary
buildings, other process heat apart from water heating is also added to this
category. Electricity consumption in buildings without electricity for space and water heating,
which shows more differences between the residential and the tertiary sector. In
residential buildings,
the predominant electricity uses are electric household
appliances, information and communication technologies ICTs, lighting, cooking,
and space cooling. In tertiary buildings, the relevant electric end-uses taken into
account here are ICTs, lighting, ventilation and air-conditioning, electric motors and
commercial appliances. The structure of this chapter follows this sectoral and end-use approach
First, a general overview is given on energy efficiency policies included in the MURE
database by different criteria of classification. The report then discussed the role of
financing measures in the portfolio of energy efficiency policies in the building sector
section 3.1. In the following two sections, the energy efficiency policies addressing the building
sector are analyzed separately with regard to space and water heating section 3.2
and electricity section 3.3. The different financial instruments are exemplified with
country-specific information from the MURE database. Section 3.4 provides a view of the impact of energy efficiency measures as extracted
from the measures presented in the second National Energy Efficiency Action Plans
NEEAPs and gathered in the MURE database. Finally, Section 3.5 discusses different aspects of energy efficiency policies for the
financing of the upfront investments identified up to 2020
the size of the required upfront investments,
the role of different financing mechanisms and of private actors,
the exemplary role of the public sector and how the measures there can be
financed,
social impacts and distributional effects of energy efficiency policies in the
building sector,
innovative financing policies. 3
Energy Efficiency Policies in the European Union
2 Energy Efficiency Policy in the EU - a
cross-cutting view
2.1 Energy efficiency policies in the EU
2.1.1 Institutions, programmes and main cross-cutting energy efficiency
measures in the EU
Since 2010 energy issues are represented with a Directorate General for Energy. In
December 2008 the European Union agreed on an Energy and Climate Change Package
plus a Strategic Energy Review.
The most important initiatives relevant for energy efficiency
since then include the Effort Sharing Decision 4062009EC 2009 the EU-Energy Strategy
2020 November 2010 the Energy Efficiency Plan 2011 reemphasizing the indicative 20
energy efficiency target and stating that the EU is on track to achieve only half its target, as
well as the Low Carbon Roadmap 2050 incl. long-term GHG reduction objectives both
March 2011 the Energy Roadmap 2050 Dec. 2011 exploring how long-term GHG targets
can be reached while also ensuring security of supply and competitiveness. The most
controversially discussed initiative was the Commissions proposal for a new Energy
Efficiency Directive EED from June 2011, including a set policy measures ensuring that the
20 saving target is achieved. After a long discussion with the Member States MS, a
compromise text was agreed on under the Danish presidency on 14 June 2012, which was
also approved by the European Parliament on 11 September 2012 and the Council on 4
October 2012.
a new for TV. 2.1.2 Buildings
Apart from the new EED, which also includes provisions relevant for buildings, the recast of
the Energy Performance of Buildings Directive EPBD 201031EC was the most important
policy addressing the building sector. It introduced the following novelties new buildings will
have to consume nearly zero energy and use to a very large extent renewables in 2020
public authorities that own or occupy a new building should set an example by building,
buying or renting nearly zero energy building by 2018 Member States shall develop
4
Energy Efficiency Policies in the European Union
measures to stimulate the refurbishment of buildings into very low energy buildings the 1000
m2 threshold for major renovation has been deleted to be effective in 2014 minimum
requirements for components are introduced for all replacements and renovations a
to push-up MS minimum energy performance
harmonised calculation methodology
requirements towards a cost-optimal level a more detailed and rigorous procedure for
issuing energy performance certificates with mandatory controls required to check their
correctness introduction of penalties for non-compliance. The impact assessment for the
recast EPBD estimates the energy savings at 60 80 Mtoeyear energy savings by 2020, i.e. a reduction of 5-6 of the EU final energy consumption in 2020. 2.1.3 Transport
The main EU initiative is mandatory CO2 standards as voluntary agreements on
performance have failed to reach their target. The new regulation set an average target of
130g CO2km for new passenger cars in 2015. A long term target is introduced for 2020 at
95 g CO2km. Manufacturers will be given interim targets 65 of their fleets in 2012, to 80
in 2014.
In case they exceed the targets, they will have to pay fines. In February 2011 the
European Parliament adopted a legislation on CO2 emissions of new light commercial
vehicles LCV with a target of an average CO2 emission of 175 gkm by 2017 for category
N1, i.e. below 3.5 t gross weight 185 gkm in 2009 and 147 gkm in 2020. Air traffic has
been included in the EU ETS from 2012, emissions for all flights that arrive at or depart from
an EU airport. A similar measure for international marine traffic is under discussion. Regulation EC No 12222009 introduced a labelling scheme for tyres. 2.1.4 Industry
Next to the new EED and the Eco-design Directive which are also relevant for the industry,
the main relevant measure for this sector is the European Emissions Trading Scheme EU
ETS. The system is approaching the end of the second phase 2008-2012, in which
allowances were given for free. The revised EU ETS accepted in December 2008 will apply
over 2013-2020 and should lead to a reduction in GHG emissions of 21 compared to 2005
levels. The quantity of allowances issued each year will decrease in a linear fashion to
reduce gradually the overall level of emissions each year. The industry sector will be, at least
partially and for a transition period, exempted from auctioning and certificates will be
allocated based on benchmarks that have been published in December 2010.
To limit carbon
leakage, 100 free allocation will be kept up to the benchmark by 2020. 2.1.5 Impact evaluation of selected energy efficiency measures
An overview of the most import recent energy efficiency policies and their expected impacts
in terms of reduction in energy consumption and of CO2-emissions by 2020 is given in Table
2-1. 5
All
All
All
All
Energy Efficiency Policies in the European Union
Table 2-1 Impact evaluation of selected energy efficiency measures in the EU
Sectors
Title of Measure
Recast Eco-Design Directive
2009125EC
Various Implementing
Directives
Revised Labelling Directive
201030EC
Since
2009
Energy Mtoe
CO2 Mt
376 TWh for the 12 first measures in 2020
36 motors, 10 lighting, 10 tertiary
lighting, 11 TV, 9 standby, 9 fans
150 Mt of CO2 in
2020
2010
27 Mtoe by 2020
Energy Service Directive
200632EC
2006 9 of final energy excl. emission trading in
2016 89 Mtoe with Early Action
Energy Efficiency Directive
2012
Expected are around 294 Mtoe in primary
energy terms by 2020 though the aim is to
reach 368 Mtoe primary energy savings. However, part of the savings stem from the
impacts of the economic and financial
crisis. 80 Mt of CO2 in
2020
270 Mt of CO2 in
2016
incl. Early Action
893 Mt of CO2 in
2020 incl. impacts
of the economic
crisis
160 to 210 Mtyear
CO2 in 2020
Buildings
Recast EPBD 201031EC
2010
60 80 Mtoeyear by 2020
Households
Transport
Transport
Minimum standards for
televisions
Tyre labelling Regulation
12222009EC
Emissions new cars 130 g
CO2km 2015
2010
43 TWh in 2020 incl. above in Ecodesign 17 Mt of CO2 in
2009
1.5 Mtoe in 2020
2008
Potentially very large impact
2020
4.5 Mt of CO2 in
2020
Transport
Inclusion of aviation in EU ETS
2012 59 Mtoe in 2020 based on CO2 emissions 183 Mt of CO2 in
2020
Industry
EU emission trading scheme
2005
Limited impact due to over-allocation
Industry
Tertiary
Minimum standards for electric
motors
Minimum standards for
commercial lighting
2011
2008
135 TWh in 2020 incl.
above in
Ecodesign
35 TWh in 2020 incl. above in
Ecodesign
54 Mt of CO2
14 Mt of CO2
Source various impact assessments of the EU
2.2 Major provisions from the recent EU Directive on
Energy Efficiency 201227EU
The Energy Efficiency Directive 201227EU was published in November 2012 in the Official
Journal of the European Union European Union 2012b. It does not introduce binding
targets at national level, but binding measures such as an obligation to renovate public
buildings and other initiatives. Key measures of the Directive are
that each country has to present national indicative targets by April 2013. If the
European Commission estimates that those are insufficient to meet the EUs overall
2020 goal, then it can request member states to re-assess their plans.
In the first
semester of 2014, the Commission will review the progress towards the 20 energy-
efficiency target, report on it and assess whether further measures are needed. that energy companies should reduce energy sales by 1.5 per year with their
customers. However, 25 of the 1.5 annual obligation can be achieved through a
series of different measures, in particular
o Early action Member states will be able to include early action taken by
energy companies since 2009. 6
Energy Efficiency Policies in the European Union
o Countries will also be able to count energy savings made in the energy
transformation sector, before it is distributed to clients. o
Industries already make under the EU Emissions Trading System for carbon
dioxide EU-ETS will now be accounted for in the yearly obligation. that the public sector should renovate 3 of buildings owned and occupied by the
central government in each country which focuses on the smaller part of the public
stock as many buildings belong to regional or local authorities. Buildings need to have
a useful area larger than 500 m2 in order to be covered by this requirement lowered
to 250 m2 as of July 2015. that EU countries should set up a roadmap to make the entire buildings sector more
energy efficient by 2050 commercial, public and private households included. that energy audits and management plans are required for large companies, with
cost-benefit analyses for the deployment of combined heat and power generation
CHP and public procurement. The measures in the EED are expected to result in a reduced 15 total energy savings by
2020, short of the 20 goal that member states had agreed on in principle. 2.3 Possible future developments
in the EU target
system for energy efficiency beyond 2020
Due to the discussion around the EU emission trading scheme which suffers from a large
oversupply of emission rights around one years CO2-inventory, which is largely due to the
impacts of the financial crisis and the large inflows of CDM rights but also due to the fact that
renewables have better performed than originally thought, a broad discussion has emerged
about the future target system including energy efficiency in Europe. The main question is whether the present target triad GHG emissions, renewables and
energy efficiency should be further developed or whether there should be a single headline
target to improve energy efficiency and which one. In the following, the main options are
discussed with their pros and cons
Option 1 Three independent targets
Emphasizes objective behind each target supply security, economic benefits, and
environment. Technology specific promotion schemes are possible.
If policies addressing one target are week there may still be enough room for
ambitious policies with the two other targets. At present, the CO2-target is the
weakest one compared to the targets for renewable and energy efficiency. - Dynamic coordination increasingly necessary. - VisibilityStability of policy framework could be an issue, as dynamic adaptations are
at the expense of stability
Option 2 GHG emissions as headline target
Insures consistency in the target system as one target dominates all objectives. - Emphasizes unique objective. - Presently It is difficult to insure large impacts of the polices.
CO2 is the weakest policy
behind the objectives at present, in particular due to the lack in progress in
international climate discussions. 7
Energy Efficiency Policies in the European Union
- Requires specific financing policies for more expensive options. - Floor prices are required to stabilize incentives from the CO2 prices as well as
financial flows from the EU Emission Trading Schemes which in Germany are used to
finance energy efficiency and renewables. - However, depending on the level of the floor price, the market element is increasingly
taken out from the ETS which may at the end be equivalent to a CO2 taxation
- Technology neutrality in the system hampers the uptake of more expensive
technologies which may be required later on in the century to achieve very ambitious
carbon reduction. Option 3 Renewables and energy efficiency final or primary as the headline targets
Insures consistency in the target system. The CO2 target would be derived implicitly
from the energy efficiency and renewables targets. Strong policies at least behind renewable. Much stronger emphasis on objectives
for supply security and economic development which are equally important than the
environment. - Still weak policy on energy efficiency. Future of RES policy in times of tight budgets is
uncertain
- Non-CO2-emissions are neglected in such a system which may require separate
targets for such type of emissions. Fuel shift is only recognized for renewable energy
sources. Option 4 Energy efficiency primary energy as the headline target
Insures consistency in the target system. Renewables are incentivized through the
primary energy targets which includes the shift towards renewable. Specific
incentives for more expensive options may be required through policies providing the
required upfront investments. Strong policy required for energy efficiency to achieve an efficient target system
- The incentives for renewable which are not accounted for with 100 in the
transformation sector is weak. Specific incentives for such type of renewable may be
required. - Non-CO2-emissions are neglected in such a system which may require separate
targets for such type of emissions. Fuel shift towards renewable energy sources is not
recognized unless there are specific mechanisms to take that into account in the
target achievement.
The discussion around the formulation of the target system for energy efficiency beyond
2020 will further take up speed in 2013. 8
Energy Efficiency Policies in the European Union
Figure 2-1 Options for the future target system for energy efficiency, renewable and
greenhouse gas emissions
9
GHG EmissionsEnergyEfficiencyPrimaryFinal
Energy Efficiency Policies in the European Union
3 Energy Efficiency Policies in the EU
Buildings Sector
3.1 Financing measures
in the portfolio of energy
efficiency policies in the building sector
3.1.1 Energy efficiency policies in the building sector
Several studies have shown that there exist large energy saving potentials especially in the
building sector in all EU Member States, Norway and Croatia Eichhammer et al. 2009
EcofysFraunhofer ISI 2010 BoßmannEichhammer et al. 2012. In the Energy Efficiency
Plan from 8 March 2011, the European Commission 2011 also states that the greatest
energy saving potential lies in buildings. In addition, both the Energy Efficiency Plan and the
new Energy Efficiency Directive EED European Commission 2012 include several
proposals for additional policies in order to better exploit the saving potential in the building
sector, above all
the increase of the renovation rate of buildings private and public,
the improvement of components and appliances used in buildings,
the emphasis on the outstanding exemplary role of public buildings,
Article 7 of the forthcoming EED to introduce Energy Efficiency Obligations EEO
obliging final energy suppliers or the distribution network operators to a certain
amount of annual energy savings which would certainly also affect the building
sector. Already in the past, many energy efficiency policies addressing the building sector have been
implemented all over Europe, both at the national level and for the EU as a whole. In April
2012, the MURE database included around 2000 energy efficiency policy measures for the
27 EU Member States, Norway and Croatia, and the EU itself. About half of them are
assigned to the household and tertiary sector, i.e. are mainly related to residential and non-
residential buildings. A certain share of the policy measures addressing energy efficiency are based on EU
legislation. With regard to the building sector, the most important regulations are
the Energy Performance of Buildings Directive EPBD of 2002 200291EC and the
EPBD recast of 2010 201031EC,
the Ecodesign Directive of 2005 200532EC and its recast of October 2009
2009125EC, and
the Energy Labelling Directive
201030EU. from 1992 and
its recast
from May 2010
Another important piece of energy policy for the building sector is the Renewable Energy
Directive of 2009 RED, 200928EC. The RED fosters the use of renewable for heat
purposes RES-H in buildings by the regulatory introduction of a use obligation. Though
renewable and energy efficiency imply different strategies, these two strategies are
increasingly interlinked in the building sector as building regulations integrate the use of
renewable in buildings as a trade-off for energy efficiency. In order to ensure a more homogeneous representation of EU-wide measures across the
countries, a set of EU measures common to all countries mainly EU Directives was defined
10
Energy Efficiency Policies in the European Union
in the MURE database and separated from pure national measures. Around 130 policy
measures in the residential sector and 70 measures in the tertiary sector in MURE are
classified as EU measures. With a share of almost 25, the importance of these policies is
most important in the residential sector. In the other sectors tertiary, industry, transport,
cross-cutting, the share of EU measures in total measures compiled in MURE varies
between 15 and 20. One important classifier in MURE is the end-use which is targeted by a policy measure. With
regard to buildings, policies addressing space heating and hot water both in the household
and tertiary sector should be separated from policies addressing electricity, where the
diversity of targeted end-uses is considerably more pronounced Figure 3-1.
Electricity
consumption in private households is dominated by the large household appliances, lighting,
and space cooling, whereas in the tertiary sector, lighting and ventilation and air-
conditioning are most important. Figure 3-1 Energy efficiency policy measures in MURE in the residential and tertiary sector
by targeted end-uses
Source MURE as of April 2012
3.1.2 The relevance of financing measures in the portfolio of measures
to improve energy efficiency in buildings
The dominating measure types addressing heating consumption in residential buildings are
legislative-normative measures mainly building codes with a share of around 44. Financial measures with a share of 29 come second Figure 3-2. When also taking into
account legislative-informative measures e.g. building certificates with a share of 13, the
total share of legislative and financial measures adds up to 86. Nevertheless, the role of
information and education programs on a voluntary basis must not be underestimated. 10
of the policy measures described in MURE and addressing residential heating belong to this
type e.g. training for professionals in the building sector. Their role is even more important
11
26245848162330193732721414423140102030405060708090100Household-HeatingHousehold-ElectricityTertiary-HeatingTertiary-ElectricityVAC Ventilation and air conditioningElectric motorsICTCommercial appliancesProcess heat excluding hot waterTotal electric consumptionspace coolingcookinglightingelectric appliancesTotal fuel consumptionSpace heatingHot water
with regard to tertiary buildings. According to the MURE database, almost 20 of the policy
measures addressing heating consumption in tertiary buildings are assigned to this type. Figure 3-2 Measures addressing residential and tertiary buildings by type
Energy Efficiency Policies in the European Union
Source MURE as of April 2012 partly double-counting some measures address more types
With regard to electricity, the dominating measure types in the household sector are
legislative-normative measures mainly mandatory energy efficiency standards with a share
of 38. Financial measures are less widespread than for heating, but also important. Mandatory and voluntary informative measures both have a share of 20 . I.e.
informative
policies at a legislative e.g. EU Energy Labelling or voluntary basis are the most important
measure type addressing residential electricity consumption. In the tertiary sector, the
structure of measures by type is similar. But legislative measures are less important,
whereas both voluntary information and co-operative measures are more relevant than in the
household sector. 3.2 Energy efficiency policies addressing space and
water heating in buildings
In this section we focus on individual policies addressing energy efficiency in the space and
water heating uses focusing on financial instruments but presenting also other relevant
instruments, in particular legislative-normative and legislative informative instruments. 3.2.1 Energy Performance Directive for Buildings EPBD
EPBD
The European Directive on Energy Performance of Buildings was enacted in its first instance
on 200291EC and came into force in January 2003. It was amended in 2010 and is in force
in its current version since 8th June 2010. The directive requires the application of a
methodological framework for calculating energy performance of buildings Art. 3 in
12
292030302211443830251320149102018251791110102030405060708090100Household-HeatingHousehold-ElectricityTertiary-HeatingTertiary-ElectricityUnknownCross-cuttingCo-operativeInformationEducationLegislativeInformativeLegislativeNormativeFiscalTariffsFinancial
Energy Efficiency Policies in the European Union
accordance with the guidance given in its annex 1. The EPBD requires further that all new
buildings to be nearly zero-energy buildings by the end of 2020, and all new buildings
occupied and owned by public authorities are nearly zero-energy buildings by end 2018. National plans to reach that target are required and need to include the definition of nearly
zero-energy buildings according to local conditions and by giving a numerical value that
indicates the primary energy use as well as intermediate targets for the energy use of new
buildings to be set for 2015 and information on political and financial measures to achieve
the target. Member states shall ensure that all accessible parts of the heating and air-
conditioning systems are regularly inspected and that heating installations older than 15
years are assessed with respect to their energy performance. In addition, independent
control systems for energy performance certificates and for inspection reports of heating and
air-conditioning systems shall be established. National Building Codes
Member States need to set minimum requirements for the energy performance of buildings
and building elements. New buildings, existing buildings and building elements subject to
major renovation as well as technical building systems that are installed, replaced or
upgraded shall meet minimum energy performance requirements which are to be set at the
cost optimal level or stricter. The cost optimal level is to be determined considering the
investments and the energy costs saved throughout the lifetime of the building. Building Certificates
Member States need to implement certification systems for the energy use of new and
existing buildings. Certificates shall be no older than five years and those of public buildings
shall be prominently displayed. Since the amendment in 2010 the EBPD requires the
extension of the certificate system with indicators enabling the comparison of buildings and
with recommendation for a cost optimal improvement of the building energy performance of. The building certificates that have been implemented are different within the boundaries set
by the EBPD. Most countries have chosen to include an energy efficiency class system in
their certificates, which makes the figures more transparent to end users. These rankings
can for example be used in real estate advertisements as it is done in France. Nevertheless
the impact of the energy certification on investment decisions is still limited according to the
latest barometer ADEME - TNSSofres5 In 2011, 16 of the households of the survey
realized an energy certification compared to 12 in the year before. Only about one third
took note of the recommendations of the certificate and only half of those realized the
recommended improvements, frequently only partially. The certificate is considered as an
informative document for the performance of the building but does not yet seem to have an
impact on the decisions to improve the building. The certificate is even considered as a
barrier to building transactions by three quarters of the households. 3.2.2 Financial and fiscal measures
Countries having introduced financial incentives mostly offer loans at low interest rates often
combined with a grant system also housing allowances and funding. Apart from the subsidy
volumes available for the instruments the systems differ in the conditions that need to be
fulfilled to receive support. The grants usually cover a percentage of the total investments for
the energy saving measure with a coverage of 15-40 for different countries see Table
3-1. There are programs that require implementation of certain technical measures in order
to qualify for a grant of a certain percentage. Different countries have applied different
approaches to ensure the efficiency of the financial measure.
Since financial measures are
financed through the fiscal budget the governments want to make sure that the investment,
as necessary as it is, returns as much fossil energy savings as possible. 5 httpademe.typepad.frfilessynthC3A8se-baromC3A8tre_aout2012.pdf
13
Table 3-1 Comparison of European financial incentive systems
Energy Efficiency Policies in the European Union
Austria
Scope
residential buildings, new
buildings 75 and
renovations 25
Conditions
differ by state
Bulgaria residential buildings
Estonia
residential buildings,
renovation of envelope
Czech
Republic
residential thermal
insulation new construction
in passive standard use of
RES heating Bonus for
combination of measures
Germany refurbishment of residential
buildings
Ireland
Italy
residential buildings, wall
insulation, heating controls,
efficient boilers
heating systems, building
envelope, Existing
buildings
Latvia
privately owned flats in
multi-apartment building
Poland
residential and tertiary
buildings
Slovenia residential renovation and
new buildings, renewables
and efficiency in heating
Volume
2.85 billion 2005-
2009 of which
about 0,5 billion
for renovations
50 million for
credit line 10
million for grants
October 2010
Nov 2011 6,28
Mio Euro
Impact
334.3 ktoe through
building envelope
243.6 ktoe through
efficient heating
systems 1996 2010. from 2000 until March
2011 4.1 ktoe per year
not assessed 33
1000 million EUR
from 2009 - 2010
25.8 ktoe in 2010
103.9 ktoe in 2013
credit line 20 grant max
850
grant 15-35 of renovation
cost depending on energy
savings 20-50 and size,
renovation loan
not described
energy performance of 55 to
115 of the requirement for
new buildings support
depending on performance
Building energy rating
loans comprising
4.2 billion Euro
grants of 75
million Euro
not described
396.4 ktoe in 2007 and
additional 561.2 ktoe in
2016
257.9 ktoe in 2016 and
515.8 ktoe in 2020
meeting required u-values,
renewable heating, more
support for exceeding u-values
by 20
20 energy savings monitored
ex post to implementation
financial efficiency of at least 2
MWhyear per EURO of
financing
energy audit specifying
alternative options with
economic and technical
details review of audit report
by designated authorities
new buildings need to meet a
defined standard
tax credit
not described
30 million EUR up
to 2011
expected 20.64 Mtoe in
2016
23 70 million
EUR annually
since 2007,
decreasing
2011 to 2016
estimated volume
of 161 million EUR
696.44 ktoe in 2016
envelope 37.83 ktoe in
2016 and 55.03 ktoe in
2020
heating 54.17 ktoe in
2016 and 76.52 ktoe in
2020
3.2.3 Informational and educational measures
There are lots of different concepts of information and educational measures ranging from
the pure publication of informational material over consulting offers via telephone or in
person and mass media advertising campaigns through monitoring and advice services of
independent experts. These measures are primarily intended to induce a change in the
users behaviour by creating awareness of energy use and interest in its reduction. The effect
of these measures is comparably low and hard to assess due to the facts that it is essentially
difficult to measure the change of a single users behaviour. Further, when a change in user
behaviour is identified and quantified it is hard to determine its origin. Lots of informational
measures are combined with other types of measures, like financial incentives. This
combination leaves the question of the allocation of the energy savings open. 14
Energy Efficiency Policies in the European Union
There are many national and European programs affecting the behaviour of users
concerning their heating and hot water demand, though few directly focus on heat supply
within buildings. Guidelines and data to inform the user about the areas where energy can be
saved and how are made available through numerous European and national projects and
websites. Such a website is for example Energyoffice and Build up at European level. A
further step is to consult the user in person or via phone. This provides the opportunity to
answer specific questions according to the users situation. Such programs are for example
The Power of One in Ireland, the Tailored Energy Advice in the Netherlands, the energy
information helpline in Norway and the Energy advice for private consumers in Germany. Other programs encourage single users and groups of users to compete in saving energy
through behavioural changes examples for such European programs are the European
Citizens Climate Cup and the Energy neighbourhoods. Outstanding are programs that go
further than just offering information and advice. The British government has fixed its plan to
roll out Smart Metering and Billing throughout the complete country and has supported early
installations and ensured all necessary technology and systems are being build and tested
until the mass roll out in 2014. Connected to this is the establishment of a Data and
Communications Company that enables the data collection and transfer needed. 3.2.4 Energy efficiency obligations
Energy efficiency obligations are another important tool for financing energy saving
measures as they broaden the basis by including energy companies as private investors into
the scheme. Table 3-2 summarizes the design features of the present systems.
Table 3-2 Design features of present energy efficiency obligations schemes
UK
France
Italy
Denmark
Nature of saving
target
Cumulative CO2
emissions during the
lifetime
Cumulated
discounted final
energy during the
lifetime
Cumulative primary
energy over 5 year
period buildings 8
yr, CHP 10 yr
Final energy
accounted only in
the 1st year
Standardized saving
target final energy
Danish mode
Standardized saving
target final energy
British mode
679.2 ktoea
971.6 ktoea
593.3 ktoea
146.2 ktoea
20.4 Mtoea
9.9 Mtoea
6.3 Mtoea
1.5 Mtoea
Obligated companies Energy suppliers
Energy suppliers
Energy distributors Energy distributors
Actors authorized to
realize saving
measures
Participation of the
obligated companies
necessary
Participation of the
obligated compa-
nies necessary
No restriction
Participation of the
obligated compa-
nies necessary
Targeted sectors
Residential
Residential, tertiary,
industry, transport
Residential, tertiary,
industry,
Residential,
tertiary, industry
Certificates trading No, bilateral trading is
possible
Yes but limited
trading activity
Yes
No
Targeted end-uses of
the energy-saving
measures
62 building
refurbishment
25 CFL
72 heating
systems
14 building
refurbishment
6 transport
8 industry
Quality of the
induced saving
measures
43 of building mea-
sures are cavity wall
insulation 57 loft
insulation.
Distribution of 300
million energy-saving
Heating system
measures mainly
exchange by
condensing boilers
state of the art
47 industry
44 residential
50 electricity uses
also energy-
saving lamps
25 heating and
hot water also
shower heads
20 Industry
Distribution of 60
million energy-
saving lamps about
1 per inhabitant
15
Energy Efficiency Policies in the European Union
lamps 5 per inhab. 3.2.5 Impact of measures in the field of space heating and hot water
Though no full quantitative overview of impacts can be provided in this section, semi-
quantitative impact categories6 available in the MURE database show increasing impacts of
the policy measures. This type of semi-quantitative evaluation provides useful information for
screening the policy measures and establishing a first order estimate of the impact of policy
measures. Figure 3-3 shows all measures addressing energy consumption for space heating
and hot water in residential and non-residential buildings ordered by the semi-quantitative
impact assessment since 1990. The share of high impact measures considerably increases
for measures starting from 2005 or later, both in the household and tertiary sector.
Figure 3-3 Semi-quantitative measure impacts for spacewater heating in buildings
6 These semi-quantitative impact categories low, medium or high are linked to the energy or electricity consumption of the sector through a
percentage range. 16
010203040506070up to 1990up to 1995up to 2000up to 2005up to 2011Number of ongoing and completed measuresstarting year of measurelowmedium highHousehold sector -spaceheating and hot waterSemi-quantative impact
Energy Efficiency Policies in the European Union
Source MURE as of April 2012
17
05101520253035up to 1990up to 1995up to 2000up to 2005up to 2011Number of ongoing and completed measuresstarting year of measurelowmedium highTertiary sector -spaceheating and hot waterSemi-quantative impact
Energy Efficiency Policies in the European Union
3.3 Policies addressing electricity consumption
in
buildings
In this section we will focus on individual policies addressing energy efficiency in the field of
electric uses in the residential and tertiary sector, focusing again on financial instruments but
presenting also the full spectrum of other relevant instruments, in particular legislative-
normative and legislative informative instruments. Mandatory minimum energy efficiency requirement and mandatory energy labelling are the
most important legislative measures addressing electricity consumption in residential and
tertiary buildings. These are EU policies which have to be transposed into national law by the
Member States and therefore also play an important role in the national mix of energy
efficiency policies. In the following these EU policies are described more detailed. 3.3.1 Ecodesign Directive
The European Directive 2009125EC of 21 October 2009 establishes a framework for the
setting of ecodesign requirements for energy-related products ErP. The ErPcreates a
framework for the constitution of requirements to an ecologic design of products that are
related to energy. It replaces the European Directive 200532EC from 6 July 2005, better
known as Energy-using Products EuP Directive. The EuP which had to be transformed
into national law by the member states until 11 August 2007 was related to energy efficiency
and environmental compatibility of electronic devices only. The subsequent directive, ErP,
includes - besides products that actively need electricity - those which are relevant for energy
consumption and influence energy efficiency such as insulating materials. It had to be
translated into national law until 20 November 2010. The EuP respectively the ErP builds
the basic of a variety of implementing regulations. In addition to the implementing regulations
already in place, almost 40 energy-using product groups are in preparation as well as some
energy-related product groups such as windows, insulation material or shower heads. Voluntary agreement instead of regulation is discussed too as e.g. for complex set-top
boxes or imaging equipment.7 According to the impact assessment of the Directive, the first
12 implementing measures are estimated to allow yearly savings by 2020 equivalent to
almost 14 of the EU final electricity consumption in 2009. 3.3.2 Energy Labelling Directive
Energy labels are thought as a complementary instrument for minimum energy efficiency
requirements. Whereas efficiency standards shall remove the less energy-efficient products
from the market, energy labels shall help consumers choosing the most energy-efficient
products and also to provide incentives for the industry to develop and invest in these
products. Directive 9275EEC of 22 September 1992 on the Indication by labelling and
standard product information of the consumption of energy and other resources of household
appliances has been substantially amended by Directive 20101030 of 19 May 2010 on the
indication by labelling and standard product information of the consumption of energy and
other resources by energy-related products. Where the scope of Directive 9275EEC is
restricted to household appliances, an extension to energy-related products which have a
significant direct or indirect impact on energy consumption during use is covered by the
Revised Directive for Labelling of Energy-related Products Directive 201030EU, which
entered into force on 19 June 2010. 8 Energy labelling requirements are already in force for a
number of products and the Commission plans to adopt delegated regulations for energy
labelling in parallel with the adoption of the Ecodesign regulations.
It is estimated that energy
labelling has contributed to annual energy savings in the order of 3 Mtoe in the period 1996-
2004. According to the impact assessment, the recast Directive, when fully implemented as
7 A comprehensive overview of the legislation process is also given on the eceee website httpwww.eceee.orgEco_design. 8 For detailed information on the EU legislation on energy labelling see httpec.europa.euenergyefficiencylabellinglabelling_en.htm
18
Energy Efficiency Policies in the European Union
planned, is estimated to save 22 Mtoe by 2020 and some 5 Mtoe additional savings from the
broadening on the scope. 3.3.3 Financial and fiscal measures
Compared to the financial support given for energy efficiency investment in the field of space
heating and hot water, there are relatively few financial and fiscal policy measures promoting
the spread of energy-efficient electrical appliances in the residential and tertiary sector. Many
countries providing extended financial support programmes with regard to space heating do
not have this kind of measures for electrical appliances e.g. Germany or Austria. In
addition, some of these programmes are included in a broader instrument, as e.g. energy
efficiency obligation schemes. Another broad financial instrument supporting energy efficiency investment is an energy
efficiency fund. Such funds have been established in a considerable number of Member
States. In the MURE database, these funds are mainly described in the cross-cutting section,
since they usually address more than one sector. Nevertheless, many of them also include
specific programs addressing electricity consumption in residential and tertiary buildings. Such funds are established e.g. in Bulgaria, Czech Republic, Denmark, Germany, Greece,
Malta, Norway at local level, Slovakia, Slovenia or UK. Some countries have introduced subsidies or tax incentives to promote energy-efficient
household appliances or lighting Table 3-3. Table 3-3 Financialfiscal measures for electricity consumption in buildings
Country Scope
Conditions
Bulgaria Household
appliances
Hungary Household
appliances
Credits
appliances.
for purchasing energy-efficient electrical
Max 225 for Class A appliances, max 260 for class
A and A refrigerators the last 10 percent of the
subsidy was only paid after
the successful
termination
Budget
Impact
276 million 2016
66
ktoe
3.7 million n.a. Malta
Lighting
households
in
A number of energy saving lamps CFLs free of
charge for every household
Not
described
2010
ktoe
3.5
Spain
Appliances
Mix of labelling, financial, training and informational
measures to promote-efficient lighting in existing
buildings. Target substitution of 300000 appliancesyr
Public
support
2011-2020
In 2020 92
ktoe
Spain
Italy
Italy
Luxem-
bourg
Lighting in buildings Mix of minimum efficiency standards,
informational measures
financial,
to promote-
training and
in existing buildings. Target
efficient
replacement of 34 million incandescent light bulbs in
households and acting on 200 million m2 of floor
space area in buildings. lighting
500 million
Public
support
2011-2020
192 million
In 2020 842
ktoe
Refrigerators
and
freezers, lighting in
non-residential
buildings
Incentive of up to 200 for any A refrigerator and
freezer purchased by 31.12.2007 and tax incentive of
36 for efficient lighting in non-residential buildings in
2009. n.a. Household
appliances, standby,
lighting
Promotion
of
efficient refrigerators
A
Campaigns addressing appliance labelling, reduction
of standby consumption, and energy-efficient lighting. Fund
million
1
n.a. Subsidies for the purchase of highly efficient electrical
appliances
n.a. 2010
ktoe
0.25
19
Energy Efficiency Policies in the European Union
3.3.4 Informational and educational measure
There are many national programs in the Member States which aim to change consumer
behaviour regarding his energy consumption and to be more concerned of energy efficiency
in his purchasing decisions. The most common way for informational and educational
measures is promoting more energy efficient usage through campaigns via print, internet and
TV. Such campaigns were realized in many countries, like in Denmark, where a booklet with
guidelines on energy consumption was given to all households in 2007. An example for a
campaign via internet is the Austrian topprodukte.at web portal for consumers, which helps
to find the most energy efficient products on the market. Another way to inform the consumer
of energy efficient products is the introduction of voluntary labels like the Blauer Engel Blue
Angel in Germany, which exists since 1977, or the Danish GoEnergimærket label, which is
used on the markets 20 most efficient products of a category. A step further goes the EFEKT program in the Czech Republic. The purpose of this
program is to assist in the organizing of exhibits, professional courses, seminars and
conferences regarding energy saving and renewable energy sources and subsidies such
events with up to 60 of the total cost. Smart metering programs are used to reduce the energy consumption in many countries
within the EU. The meters will record the actual consumption of the consumer and send the
data to a central system of energy providers which will be collected and processed. Such
programs exist in smaller or larger scale in Ireland, Greece, Spain and Austria. In Austria,
where 24000 smart meters were installed in 2010, these programs also go along with an
informative billing program like in Norway.
The Norwegian informative billing program is
estimated to save up to 3 of electricity consumption of participating households which
results in 1.8 TWhyear. The Austrian ongoing project Wohnmodern implements the direct consulting approach for
modernization of large residential buildings. Advisers develop an analysis of the respective
building, which involves important parameters in terms of efficiency as well as an inspection
of the property. According to this information individual proposals for the refurbishment are
offered.
An assessment of the costs and the sponsorships helps the customer to make an
objective decision. 3.3.5 Energy efficiency obligations
There is no energy saving obligation scheme with a special focus on appliances, likewise the
British CERT scheme for buildings. Within this scheme, the eligibility of CFLs has ended,
since every household in the UK has been delivered an average of 12 CFLs. Nevertheless
except from this scheme, all the other saving obligation schemes also cover electricity use,
nevertheless there are differences in the schemes design, which hinder the implementation
of electricity targeted measures. In France, the accounting of the cumulated lifetime savings
of final energy favours long-lasting measures in the fuel sector. In contrast the focus on
primary energy in Italy and the accounting of first year savings in Denmark favour electricity
savings. In Denmark a lot of appliances have been excluded from the obligation scheme, for
these measures are covered well by other policies, so the accounting of these measures
resulted in deadweight effects. 3.3.6 Impact of policy measures addressing electricity consumption
Figure 3-4 shows all measures addressing electricity consumption in residential and non-
residential buildings ordered by the semi-quantitative impact assessment since 1990. The
share of high impact measures considerably increases from 2005 or later, especially in the
household sector. In the tertiary sector, the trend started earlier. 20
Figure 3-4 Semi-quantitative impact of measures addressing electricity in buildings
Energy Efficiency Policies in the European Union
Source MURE as of April 2012
21
05101520253035404550up to 1990up to 1995up to 2000up to 2005up to 2011Number of ongoing and completed measuresstarting year of measurelowmedium highHousehold sector -electricitySemi-quantative impact024681012141618up to 1990up to 1995up to 2000up to 2005up to 2011Number of ongoing and completed measuresstarting year of measurelowmedium highTertiarysector -electricitySemi-quantative impact
Energy Efficiency Policies in the European Union
3.4 Quantitative impact of NEEAP measures in buildings
In the building brochure, the energy efficiency measures of the NEEAPs of the EU Member
States are analyzed at the aggregated level of EU-27. The focus of the analysis is on the
building sector, including space heating consumption plus sanitary hot water and electricity
consumption without space heating and hot water. The measures included in the MURE
database constitute the main analytical basis. In addition, savings reported in the 2nd
NEEAPs9 are also taken into account in order to get a more comprehensive picture of repor-
ted savings and also to include impacts of top-down calculated savings. MURE also provides
a simulation tool to carry out calculations of final energy saving potentials covering all EU
Member States. This tool was the methodological basis for the calculation of energy saving
potentials in a study on behalf of the European Commission Eichhammer et al. 2009. Since the MURE Measure Database is structured by single energy efficiency policies, only
the impact of bottom-up BU evaluated measures from the NEEAPs can be drawn from the
MURE database. In addition, the energy savings reported in the 2nd NEEAPs are also taken
into account directly from the NEEAPs10 in order to get a more comprehensive picture of the
reported savings and also to include the impact of top-down TD calculated savings. Top-
down savings, however, were only taken into account for those Member States where no
bottom-up calculations were available for the building sector. The top-down saving generally
include the impact of autonomous progress and of energy efficiency policies previous to the
period under consideration. Table 3-4 Final energy saving in the building sector reported in the 2nd NEEAPs
Sources MURE Measure Database National Energy Efficiency Action Plans of the EU Member
States Eichhammer et al. 2009 Ecofys Fraunhofer ISI 2010 Boßmann et al.
2011 own
calculations Fraunhofer ISI
An overview of the final energy savings calculated under these assumptions gives Table 3-4. In total, bottom-up calculated final energy savings in the residential and tertiary sector
including public sector, excl. agriculture of around 40 Mtoe are calculated from the NEEAPs
for the year 2016, the target year of the ESD. This result is based on bottom-up calculated
9 All National Energy Efficiency Action Plans NEEAPs submitted by the Member States under the ESD can be found under
httpec.europa.euenergyefficiencyend-use_en.htm. 10 httpec.europa.euenergyefficiencyend-use_en.htm
22
Residential sector Tertiary incl. Public sector Total Building SectorHeatingElectricityTotalHeatingElectricityTotalHeatingElectricityTotalUnitMURE NEEAP measures201625428527296352020 projection34539731041849NEEAPs only BU2016337402020 projection461056NEEAPs incl. TD2016509582020 projection691281Saving Potentials HPI201651556187246912812020727792411359618114Based on information from23 EU Member States Based on information from21 EU Member States All EU Member States EU-27All EU Member States EU-27MtoeBased on information from15 EU Member States Based on information from12 EU Member States Based on information from19 EU Member States Based on information from18 EU Member States
Energy Efficiency Policies in the European Union
energy savings in 19 NEEAPs, which provide bottom-up calculated energy savings at the
level of end-use sectors. If also adding the top-down calculated savings for the residential
and tertiary sector from 4 additional NEEAPs Bulgaria, France, Greece, Netherlands11 , the
total savings for the building sector in the year 2016 amount to around 58 Mtoe. In order to compare these savings with the EU 20 saving target for 2020, a rough
projection of the 2016 figures was also made for 2020, using a projection factor of 1.4.12 This
rough approach for projection may be justified in a first order, as the larger part of the
measures address the buildings, where the build-up of the savings is rather linear over time
well beyond the end of the ESD period in 2016. Based on bottom-up quantifications, total
savings in the building sector of 56 Mtoe are projected for 2020 from the NEEAPs based on
19 countries, which is not far from the savings of 49 Mtoe based on 15 countries projected
from the information in the MURE database. When also taking into account top-down
calculated savings from 4 additional Member States, the total final energy savings amount to
in the building sector in 2020 amount to almost 81 Mtoe. This would be, only in the building
sector, around 40 of the total primary savings of 200 Mtoe which are still missing in order
to achieve the EU 20 for 2020. However, it must be taken into account that all the
calculations shown here are based on final energy, thus not taking into account the impact of
renewable energies and the conversion sector, whereas the EU 20 saving target is based
on primary energy. Furthermore, the missing energy savings for the EU 20 2020 are by
nature savings from 2006 additional to baseline projections, whereas the 81 Mtoe from the
NEEAPs include a part of the baseline savings and some early energy savings before 2006
as explained below. When comparing the reported savings with the saving potentials calculated in the High Policy
Scenario, around 70 of the estimated savings in the building sector are already exploited if
both including bottom-up and top-down reported savings. When only taking into account BU
measures, the exploitation rate is around 50. However, an important point to note is that
the NEEAPs also include so-called Early Action, that is policy measures but also often
individual action initiated in the period 1995-2007 which still have an impact in 2016 which is
the case for example for most thermal building regulations from that period, the buildings
built during that period according to this building regulation and which have a long-term
impact. Only few NEEAPs provide enough information to separate clearly Early Action
from new measures taken in the period since 2008. In addition, the top-down savings
included do in general include also autonomous progress as the top-down indicators used
are not corrected for such savings. This is evidenced by the comparatively large savings
added by the four additional countries.
They increase the savings from the 19 countries with
BU approaches by around 64. The bottom-up savings reported contain generally only
policy measures hence autonomous development is largely excluded though it may in some
measures be included to some degree in the form of free-rider effects, i.e. part of the impacts
included are not a direct consequence of the measure but may have occurred anyhow. Previous estimates of the authors based on the first NEEAPs showed that on average up to
one third of the measure impacts included in the NEEAPs may be due to Early Action. For
example the German NEEAP comprises 45 energy savings from Early Action in the
ResidentialTertiary sector electricity conversion factor 1, the NEEAP of Luxembourg 41,
the NEEAP of the UK an estimated third of the savings, the NEEAP of Austria 42
residential sector only, the NEEAP of Sweden 66. The savings from the High Policy
Scenario on the contrary do not include Early Action and are additional to a Business-As-
Usual-Scenario which comprises autonomous progress. 11 In 2 NEEAPs Germany and Latvia, both bottom-up and top-down calculations are shown in the NEEAP in that case, the BU-value was taken. For 4 EU Member States Poland, Portugal, Romania, Slovakia, no impact evaluation could be taken into account since savings at the sectoral
level were only quantified for interim years 2010 andor 2013 or the NEEAP was not available in English. 12 Only in a few NEEAPs Denmark, Finland, France, UK energy savings are also reported for 2020. 23
Energy Efficiency Policies in the European Union
3.5 Designing efficient policy packages in the building
sector addressing the financing needs and policy
interactions
3.5.1 Financing energy efficiency policy measures in buildings
The study The upfront investments required to double energy savings in the European
Union in 2020 EcofysFraunhofer 2011 identified the additional investment costs to
improving energy efficiency in the European Union with 200 Mtoe in 2020. Such an
improvement would bridge the gap between current expectations of energy use in the
European Union in 2020 and the targeted energy use, as derived from the EUs 20 energy
savings targetAs a best estimate for the total additional investment the study finds a
number of 900 billion over the period 2010 2020. The uncertainty range is from 800
1200 billion. This number was derived combining data from several bottom-up and top-down
studies. The breakdown of the 900 billion is as follows
buildings 400 billion uncertainty range 350 650 billion
transportation 400 billion uncertainty range 300 500 billion
industry 100 billion. The uncertainty in the investments numbers is highest in the buildings sector because it has
a big impact on costs whether retrofit is carried out in conjunction to regular refurbishment or
not. The study assumed that most of the energy efficient retrofitting can be done in
connection to refurbishment that will occur anyhow. If this is not the case, costs will become
higher, in particular when renovation rates are enhanced beyond the present level as
evidenced by EcofysFraunhofer ISI 2011 Table 3-5. Those differential financing requirements of up to 100-110 billion Euro annually up to 2020
may be financed by different sources13
State budgets this is for example the case of a number of subsidy programmes
described in the MURE database such as the KfW programme in Germany. The large
drawback of this type of financing is that in times of tight budgets it will be difficult to
find the additional investments as the costs cannot be easily passed on to the tax
payers although the energy savings will at the end relieve the pressure on the
economy from reduced energy costs. It seems unlikely that through this path all the
investment needs identified in the building sector could be covered.
The advantage of
this type of financing is that the means can be directed towards deep renovations. Table 3-5 Cumulative energy efficiency investments billion 2005 and energy savings
Note that the potentials mentioned are the remaining potentials for the period 2011-2020
13 For much more complete overviews see in particular BPIE 2012 and RezessyBertoldi 2010
24
Source EcofysFraunhofer ISI 2011
Energy Efficiency Policies in the European Union
Financing from state-like budgets, e.g. the use of income from the emission trading
scheme to finance energy efficiency investment. The drawback of this financing
source is that it is heavily dependent on the CO2 price, the advantage that is
independent from the direct state budget.
However, the temptation is large for
governments to use such income not in a dedicated manner for energy efficiency
options. In order to finance the large investment volumes required for building
rehabilitation, the CO2 price should be considerably higher than present levels in
order to contribute substantially to the annual investment needs identified above. Leveraging of private investments from companies in the energy sector through
energy saving obligationsWhite Certificates This has the advantage in opening new,
more stable, financing sources. At the end the cost will be passed on to the
consumer. The advantage is that private investments are leveraged and that energy
companies may possibly develop into energy service companies. The disadvantage
is that, if no special provisions are taken, mainly shallow refurbishments are
undertaken. Leveraging of private investments from through energy service companies
Here the charge is totally on the private sector. The investor gets his money from the
reduced energy cost of the client.
This has the advantage that markets are developed
for energy services and that the energy consumer is in principle not charged
additionally and may even get a small reduction in energy cost during the phase
when the investment is paid off. At present, mainly energy conversion options or
options that pay off rapidly are financed in such a way boilers, HVAC systems,
building control systems etc. while deep renovations including the building envelope
are rather rare due to the long payback time. An option may be to subsidise the
payback to a rate interesting for the energy service companies. Also risk mitigation is
an important aspect where the state generally plays a role. Financing through a levy on energy consumption Feed-in tariff for energy
efficiency this is in principle similar to the promotion of renewable through feed-in
tariffs while energy saving obligations are the equivalent to quote systems for
renewable - and has the substantial advantage of financing stability and risk-lowering. On the other hand, given the fact that renewable already charge heavily especially
electricity prices in some countries, it may be difficult to levy in the same way the
large investments for refurbishing existing buildings. However, in difference to
renewable, where first the costs are positive and serve to pay their cost down along
the cost degression curve, energy efficiency options provide after some time, benefits
to the consumers due to lower energy bills. Also the energy consumption on which
the costs for energy efficiency investments are charged should cover a much larger
range than just electricity consumption but also fossil fuel use. Combining different sources in an Energy Efficiency Fund one important
possibility of generating the funds necessary for the large investments is combining
different sources discussed in the previous point in a general energy efficiency funds,
such as the EU Energy Efficiency fund but at a much larger level of volumes. Combining the sources would have the advantage of taking the largest basis
possible, though, in most cases, the final consumer would carry the charges in some
innovative
flexibility
way. Energy efficiency
technologies and solutions than other financing sources. funds offer more
in promoting
This discussion of pros and cons shows that in order to deal with the challenge of a large
reduction in energy consumption of buildings a combination of financing instruments is
necessary otherwise the large investment needs could not be levied. 25
Energy Efficiency Policies in the European Union
3.5.2 Financing energy efficiency in the public sector
Tight public budgets raise the question on how energy efficiency could be improved in the
public sector and what role financing plays in that context. On the other hand, there could be
at present an enormous push to building refurbishment exactly as a consequence of the
economic crisis first of all, as public money gets rare, public buildings could save large
amounts on the budget. Second, through investments in buildings, based on public or private
sources, the presently low running European economies could get a push that helps to
emerge from the crisis. Article 5 of the Energy Efficiency Directive EED advocates an exemplary role of public
bodies buildings By 1 January 2014, 3 of the total floor area of heated andor cooled
buildings owned and occupied by central governments is to be renovated each year to meet
at least the minimum energy performance requirements that are set up in application of
Article 4 of the EPBD Directive 201031EU. This exemplary role of the public sector requested by the EED need to be fulfilled by a
combination of instruments, including financial instruments. Many of these examples imply
public budgets to provide grants for investments. An extended discussion of these aspects in
the main report on buildings makes appear three aspects
the large scope for low-cost measures in the public buildings and their large potential
which is well-illustrated with the case of Ireland and the activities of the Office for
Public Works in Ireland. the limits of the approach when it comes to investments, and in particular investments
into the building envelope with comparatively large sums and longer periods of return,
also illustrated with the example of Ireland. The emerging role of Energy Service Companies ESCOs to build the bridge beyond
the public budgets but not without difficulties, especially when it comes to finance
deep renovations including the building envelope with its long payback periods. 3.5.3 Social impact of policy measures in the building sector
Rising energy prices threaten the poorest households, and subsidizing the price increase, as
done in some EU Member States in the past14, is not a long-term option as public budgets
will not allow for such subsidies at a large scale. Energy efficiency improvement is an important long-term means to combat fuel poverty. Energy efficiency measures will finally pay off for the individual consumer, as well as for the
whole economy. However, mobilising the upfront-investments has strong distributional
aspects and may impact on the poorest part of the population. Energy efficiency policies
have therefore to be designed to allow the poorest households to undertake the necessary
investments or put the burden on stronger investors. This is the rational for policies like
energy saving obligations with a special target for fuel pour households or the Green Deal in
the UK. For poor households the terms fuel povertyenergy poverty have become common. In the
definition used by the UK, a household is said to be fuel poor if it spends more than 10 per
cent of its income on fuel to maintain an adequate level of warmth. Although the emphasis in
the definition is on heating the home, modelled fuel costs in the definition of fuel poverty also
include spending on heating water, lights and appliance usage and cooking costs.
The 10
threshold was criticised as not reflecting adequately all populations which suffer from high
energy prices, and a twice-median threshold was therefore proposed more recently15. This
14 For example, France had introduced a subsidy for the poorest households during 2007-2009 prime à la cuve which reached up to 200 Euros
for households that do not pay taxes. The subsidy was not reconducted in 2010 with the effects of the financial and economic crises on state
budgets. 15 See the discussion of this threshold by Liddell et al. 2011. The paper emphasises that a national fuel poverty prevalence rate, based on a
national twice-median, remains vital for ensuring parity across the regions, especially in the achievement of the long-term goal of eradicating fuel
poverty wherever practical.
26
Energy Efficiency Policies in the European Union
was taken up by the European Commission 2010a. The overview by the EU Commission
shows that 27 million households or 65 million persons were concerned by fuel poverty with
most of the data from 2005, i.e. before the strong rise in energy prices. This number is
therefore to increase in the future. The fuel poverty data may be used to help develop and target policies towards those most
likely to be fuel poor, or those most at risk of falling into fuel poverty. Energy efficiency
policies are thought to alleviate fuel poverty at the longer term but may also generate
considerable distributional impacts due to the high upfront-investments. Such distributional
effects need to be considered in the design of policy instruments in the building sectors. Figure 3-5 shows the general distribution effects of different instruments in the field of energy
efficiency policy. The graphics concentrates on two major instruments and their distributional
effects. The main report on buildings discusses the distributional effects of more policies.
Figure 3-5 Distributional effects of important energy efficiency policies
energy efficiency
obligation
energy efficiency
fund
Those distributional effects may require actions to mitigate the strongest effects. One
possible target group for energy efficiency measures which is increasingly discussed with
regard to building renovations are low-income households
Slovenia has a special scheme of energy efficiency for low-income households. Also,
in the other funding schemes of Slovenia the issue of fuel poverty is explicitly
addressed. In France, a target has been set to renovate the 800 000 most energy hungry social
dwellings by 2020. In the UK, besides the CERT-scheme, there are other funding schemes directly
connected to fuel poverty, such as the warm front scheme. 27
In Germany an energy check supports low-income households with a cost-free
energy audit and direct support with instant technical measures. Energy Efficiency Policies in the European Union
3.5.4 Innovative financing measures in the building sector
In this section we will focus on innovative measures to finance building rehabilitation and in
particular debate the idea of an energy efficiency levy or Energy Efficiency Feed-in tariffs
FiTs. This is in principle similar to the promotion of renewable through feed-in tariffs while
energy saving obligations are the equivalent to quote systems for renewable - and has the
substantial advantage of financing stability and risk-lowering. On the other hand, given the
fact that renewable already charge heavily especially electricity prices in some countries, it
may be difficult to levy in the same way the large investments for refurbishing existing
buildings. However, in difference to renewable, where first the costs are positive and serve to
pay their cost down along the cost degression curve, energy efficiency options provide after
some time, benefits to the consumers due to lower energy bills. Also the energy consumption
on which the costs for energy efficiency investments are charged should cover a much larger
range than just electricity consumption but also fossil fuel use. A simple calculation, taking into account the financing needs of around 80 billion Euro
annually for the built environment up to 2020, shows by much energy prices may need to be
increased to cover those financing needs. The Primes projections from 2009 European
Commission 2010b estimate the energy costs for the EU27 with 1220 billion Euro2005 in
2010 and 1729 billion Euro2005 in 2020. Levying 6 annually would raise between 70
and 100 billion Euro annually, hence enough to cover the financing needs for the
building investments. However, in difference to the feed-in tariffs for renewables, this is not
an extra cost to buy the cost of renewable down along the cost degression curve but would
come back to the economy over time in the form of reduced energy costs and imports.
Hence on average there would be net benefits to the consumers. For comparison electricity
is charged at present in Germany since 2012 with 5.3ckWh under the feed-in tariffs, hence
roughly at a level 20. Naturally the more fuels and groups are exempted from such a levy,
they higher gets the charge on the other consumers, as is the case for the feed-in tariff in
Germany, which levies only on electricity and exempts industries mostly from the levy. It is important to underline that energy levies are not new. For example Germany has put
eco-taxes on different types of energy carriers. There are many other examples gathered in
the MURE database under the category of fiscal measures.
However, none of these levies
have been used to a large degree and in a dedicated manner to cover investment needs for
energy efficiency. Several recent sources debate advantages and disadvantages of such a system
A recent report published by Neme and Cowart 2012 concludes that until an
efficiency FiT is tested on a large scale, it is difficult to make definitive determinations
as to how it compares to energy savings obligations andor other policy mechanisms
for generating energy savings. Green Alliance 2011 debates a demand reduction FiT for electricity in UK. New financing instruments for renewable heat are discussed at present in Germany. At present renewable heat in Germany is promoted with a subsidy programme
Marktanreizprogramm MAP. Since 2011 part of the programme means are
provided by the Energy and Climate Fund. The German Energiewende plan
provides for an explicit mandate to investigate such budget independent promotion
schemes for renewable heat, notely premium or portfolio models Seefeldt, 2011
Nast et al., 2006 Seefeldt et al., 2012. In Germany the Ministry of Finance submitted
in 2011 a proposal to switch climate protection measures in the heat sector,
especially for thermal building rehabilitation to a market-based solution BMF, 2011. The premium model is further discussed in detail in KüchlerNestle 2012 for both
renwables for heat and energy efficiency measures in the building sector. 28
Energy Efficiency Policies in the European Union
3.6 Conclusions
The large financing needs identified earlier may require combining different financing
instruments. In addition, to tackle the barriers hindering energy efficiency improvements in
building a combination of several political instruments seems reasonable as none of the
described policies alone delivers the desired savings with regard to the energy efficiency
targets. Every policy package should comprise regulatory as well as incentivising instruments
stick and carrot, where the regulatory instruments define the technological baseline. Other
instruments may either encourage investors to undertake measures complying with this
baseline or may set incentives to exceed standards significantly. Especially for the building
itself a regulatory instrument alone will not be able to target the existing building stock. Ambitious regulatory approaches are hampered by ownership rights and deep renovations
may not be possible under such an approach. In contrast, regarding the replacement-driven
market of household appliances, a regulatory approach may be highly successful. Nevertheless a combination with financial incentives to invest in even more energy efficient
solutions still may enhance the impact of the instrument. In the building report six coherent combinations of policy instruments are described which
cover an increasing perimeter and could be able to provide in principle with more or less
barriers - the large upfront-investments specified earlier
Policy Path 1 - a combination of regulation and financial incentives based on
state budgets This policy path is a combination of financial incentives based on
state budgets combined with regulation. The status of regulation reflects the actual
situation in Europe, where buildings are subject to a broad regulation in accordance
with the EPBD. The regulation of appliances does not yet includes all product
groups and is therefore incomplete. Le limitations of this combination of instruments
stem from the limitations on state budgets. Policy Path 2 - a combination of regulation, financial and fiscal incentives This
extends the instrument mix of path 1 by adding tax relief schemes to the instrument
mix and assumes a broad extension of product regulation. Additionally the financial
incentives may be extended to some appliance categories. Policy Path 3 - a combination of regulation, financial and fiscal incentives and
saving obligation schemes This path includes the experiences with saving
obligation schemes and represents an even wider mix of instruments. The saving
obligation schemes introduced in this path include appliances as well as some parts
of measures related to the building itself but does not cover deep renovation due to
the difficulties that such an instrument, whose main feature are standardised energy
savings, may encounter for such applications. Policy Path 4 - a combination of regulation, fiscal incentives and an energy
saving trust This path is a reduction of the instrument set, preserving a broad range
of application. The role of state funded support schemes is taken by an energy saving
trust which may of course be also funded by some tax money. Such a trust, possibly
including a tender system, could cover all sectors. Still some tax relief schemes
covering the buildings themselves seem reasonable due to rather high upfront costs. Policy Path 5 - a combination of regulation, fiscal incentives, energy saving
trust and saving obligation schemes The advantages of an energy saving trust
and a saving obligation scheme are combined in this policy path. The saving
obligations cover the measures suitable for deemed savings, the appliances. The
saving trust thus covers the more complex measures with longer payback times
covering the building structure. Policy Path 6 - a combination of regulation, financial and fiscal incentives,
energy saving trust and saving obligation schemes Finally path 6 is a
combination of all the approaches mentioned before, including a saving trust, saving
29
Energy Efficiency Policies in the European Union
obligation schemes, financial and fiscal incentives and tightened regulation.
In such a
case the interaction between the instruments could be complex and a careful design
of the individual instrument is necessary taking into account the overall objectives. 30
Energy Efficiency Policies in the European Union
4 Energy Efficiency Policies in the EU
Transport Sector
4.1 Sustainable hierarchy for transport measures
Globally transport is the sector with the highest final energy consumption and, without any
significant policy changes, is likely to remain so. It is responsible for about one-fifth of CO2
emissions in the EU, and emissions from the sector are still rising rapidly.
The recent EU
White Paper EC, 2011 has however set a clear quantitative target for the reduction of GHG
emissions from transporti, of 60 by 2050 from 1990 levels which is equivalent to about a
70 reduction from 2008 levels, with an interim goal of reducing emissions by around 20
below their 2008 level by 2030. Figure 4-1 Sustainable Hierarchy for Transport Measures
It is widely recognised that the transport sector remains one of the most challenging areas for
improving energy efficiency, and that while in the past, measures have focussed on
technological improvements, there is the need to move towards a more holistic approach,
which includes reduction of transport demand and shift of transport to more environmentally
31
IMPROVEEfficiency improvementsSHIFTModal shift to more sustainable modesAVOIDBehavioural changes including encouraging higher occupancy rates for both private vehicles e.g. lift sharing and public transport promotion of car clubs promotion of ecodrivingtechniquesTechnical interventions to improve vehicle efficiencyTechnical interventions to promote more efficient use of transport infrastructure and net worksShifting away from motorised modes to cycling and walkingShifting from private motor vehicles to public transportIncludes better integration between different public transport systems, walking and cyclingWide range of measures ranging from good spatial planning through to technological solutions such as telecommutingReduce demand for powered transport
Energy Efficiency Policies in the European Union
friendly and energy efficient modes. A hierarchy for sustainable transport policies has been
identified e.g. SDC, 2011 EEA, 2010 which prioritises demand reduction, and modal shift. Historically there has been a tendency for measures to focus on technological solutions to
improve vehicle efficiency, particularly of cars. A review of the first National Energy Efficiency
Action Plans NEEAPs submitted by Member States16, found that although there had been
significant improvements over recent years in vehicle technology, particularly fuel efficiency,
these were not sufficient to neutralize the effect of increases in traffic and car size. On the
other hand the review also found that only a few Member States reported a clear and
consistent strategy for modal shifts to more energy saving modes of transport. The IEA has also recognised the need to tackle transport sector energy consumption in a
more comprehensive way. In 2008 it made four key recommendations on transport,
concerning tyre efficiency, fuel economy of light and heavy duty vehicles and ecodriving, In
2010, a review of implementation of these recommendations in Member States which
concluded that none of the recommendations had been fully implemented in all counties
recognised that the original recommendations mainly focused on vehicle and tyre efficiency
and did not address driver behaviour aside from the recommendations on eco-driving or
travel demand. Their recommendations have subsequently been expanded to include other
aspects of vehicle efficiency and modal shift Box 4-1. Box 4-1 IEA Recommendations on Transport Energy Efficiency
As part of a set of 25 energy efficiency recommendations, the IEA has made the following five
recommendations for measures to tap energy savings in the transport sector
Implement and periodically strengthen mandatory fuel-efficiency standards for light- and heavy-
duty vehicles for heavy duty vehicles this includes establishing testing procedures
Adopt measures such as labelling, incentives and taxes to boost vehicle efficiency and accelerate
the market penetration of new efficient vehicle technologies. This should include Infrastructure
support and incentive schemes for very low CO2- emitting and fuel-efficient vehicles. Put in place policies to improve the performance of tyres, air conditioning, lighting and other non-
engine components that affect a vehicles fuel efficiency. This should include mandatory fitting of
tyre-pressure monitoring systems on new road vehicles and the introduction of energy efficiency
requirements for air-conditioning systems
Promote eco-driving by making it a required element of drivers education programmes and
requiring feedback instruments in new vehicles. Enable policies that increase the overall energy efficiency of national, regional and local transport
systems, and promote shifts of passengers and freight to more efficient modes. Policies should
ensure that users pay the economic, environmental and energy security-related costs of the
transport system, that transport infrastructure is built to support the most energy efficient transport
modes, and that urban and commercial development planning takes into account the likely
implications for transport and energy demand. Source IEA, 2011. A wide range of types of measures are discussed in the transport report, ranging from
regulations, to fiscal measures to information type measures and voluntary agreements. Most of the measures discussed in the report are national measures, as the MURE database
is not designed to include local or regional measures unless the measure is particularly
innovative and could be easily replicated in a number of regions or localities.
Similarly,
infrastructure developments such as introduction of high speed rail lines are not included. 16 SEC2009889 final MOVING FORWARD TOGETHER ON SAVING ENERGY
Synthesis of the complete assessment of all 27 National Energy Efficiency Action Plans as required by Directive 200632EC on energy end-use
efficiency and energy services COMMISSION STAFF WORKING DOCUMENT
32
Energy Efficiency Policies in the European Union
However both of these types of measures can have a role to play in developing programmes
to reduce transport energy demand. 4.1.1 EU wide policies
Within the EU, policies to improve transport energy efficiency have been focussed on
passenger cars, but have more recently been expanded to include vans and, through its
inclusion in the ETS, aviation. Specific policies include
Regulations setting CO2 limits for new passenger cars and vans from 2012
Regulations requiring gear shift indicators in new passenger cars from 2012
Regulations requiring tyre pressure monitoring systems in new cars from 2012, the
use of low rolling resistance tyres on new cars from November 2014, and the
introduction of a labelling scheme specifying the rolling resistance of tyres in 2012. Inclusion of the aviation sector in the EU ETS from 2012
More details of these policies and discussions of how some of these policies have been
implemented in Member States are included in the relevant sections of the report. Looking forward, the recent EU White Paper on transport EC, 2011 has set a target for the
reduction of GHG emissions from transportii, of 60 by 2050 from 1990 levels which is
equivalent to about a 70 reduction from 2008 levels, with an interim goal of reducing
emissions by around 20 below their 2008 level by 2030. In addition to this there are
specific targets for reducing CO2 emissions from maritime bunker fuel use 40 reduction by
2050. On the passenger side, a key aim is to phase out the use of conventionally-fuelled
cars in urban transport, and on the freight side, The paper proposes that 30 of road freight
over 300 km should shift to other modes such as rail or waterborne transport by 2030, and
more than 50 by 2050. 4.1.2 Policy Measures in Member States
Member States have implemented a wide range of policy measures in the transport sector. The MURE database contains examples of 427 measures in the MURE database in the EU,
Norway and Croatia, of which just over three-quarters 333 are ongoing. 30 of the reported
measures have been implemented in the three years since 200817. A wide range of policy instruments are used the most common is fiscal measures, which
now account for 28 of all measures, and are used in almost every Member State. In recent
years since 2008 there is a trend towards using fewer regulatory or normative measures,
and more co-operative measures such as voluntary agreements Figure 4-2. The most common aim of measures Figure 4-3 is improving the efficiency of passenger
transport, predominantly through improvements to the efficiency of cars or measures to
increase the uptake of cleaner vehicles, but also through promoting modal shift. Measures
are however also beginning to tackle improving the efficiency of other modes, and
encouraging modal shift of freight from road to other less energy intensive modes such as
sea and rail. 17 Measures were extracted from the database in November 2011. 33
Figure 4-2 Types of measures implemented
Energy Efficiency Policies in the European Union
Note Regulations includes measures categorised in MURE database normative and organisational
measures includes infrastructure and social planning measures
Source MURE database
Figure 4-3 Main aims of ongoing measures
Note adds to 100 as measures may target more than one aspect
Source Derived from the MURE database
4.1.3 Transport Measures in the NEEAPs
A review by the Commission of the National Energy Efficiency Action Plans NEEAPS found
a similar pattern in terms of types of measures and aim of measures. A large number
included technological measures to improve vehicle efficiency and fiscal incentives and
subsides to encourage cleaner vehicles, but fewer had policies on other strategies such as
modal shift and mobility management Table 4-1. Overall the Commission concluded that
34
010203040Fiscal or financialRegulationsOrganisationalInformationCo-operative measuresAll datesSince 2000Since 200801020304050Modal shift passengerModal shift freightEfficiency carsEfficiency other modesCleaner vehicles -labellingCleaner vehicles -fiscalCleaner vehicles -electricSpeed limitsDriver behaviourOtherBiofuels
Energy Efficiency Policies in the European Union
while the increasing importance of energy use in the transport sector called for a more
comprehensive and strategic approach that captured technological, infrastructural, financial,
behavioural and spatial planning measures, only a few Member States had presented clear
and consistent strategies in transport. In particular it found that well-described and sound
packages of transport measures targeting behaviour change, including modal shift were rare
andor had been introduced as separate fragments that did not seem to form part of a
coherent strategy encompassing other measures. In addition very few Member States
included spatial planning aspects, although it was acknowledged that spatial and urban
planning measures are related to local policies and hence may be only broadly sketched out
at central level in the NEEAPS.
cars to bicycles. It is interesting to note that more than half of the measures in the MURE database include an
infrastructure element, i.e. involving the development, extension or improvement of the
transport infrastructure, although a quarter of these also include an information education
training element to maximise the efficiency of the initiative. Furthermore, nearly a third of the
measures aim to promote or provide information, education and training, although this is
once again often combined with other types of action e.g. infrastructure, financial, fiscal,
social planning organisational and co-operative elements. Overall, from the 27 EU countries, Norway and Croatia, all but Romania, Portugal and
Lithuania have implemented national or local modal shift measures 122 measures18 that
18 The MURE Transport brochure is based on measures entered in the MURE database as of December 2011. 35
Energy Efficiency Policies in the European Union
aim to change traffic patterns and reduce the use of cars. Nearly a third of these measures
were put in place since 2008, of which, three quarters are still on-going and most of the
remaining ones are proposed. Two of the most active countries putting in place modal shift
measures recently are Spain and France, whilst overall, Estonia, Germany, Ireland, Italy and
the Netherlands have also been very active in putting in place modal shift measures. With regards to the impact of modal shift measures, approximatelly half of the measures are
expected to have a low impact, whilst nearly a quarter are expected to have a medium
impact and even fewer than that are expected to have a high impact. It should be noted that measures that have been categorised under modal shift and are
included in the analysis in this section may also be relevant and included in the analysis of
other sections. For instance, a measure may promote modal shift between motorised modes
by extending improving the transport infrastructure, whilst at the same time encouraging the
uptake of cleaner vehicles. The same applies for the sub-sections on modal shift, i.e. a
measure may include actions that promote both a shift between motorised modes and to
non-motorised modes, thus, will be considered in both categories. 4.2.1 Shift between motorised modes
Modal shift between motorised modes has been considered separately for the transport of
passengers and for that of goods. The first primarily targets private cars, shifting passengers
towards the use of public transport, whilst the latter targets vans and heavy duty vehicles,
shifting the transport of goods to more sustainable modes. Modal shift for passengers
A total of 88 modal shift measures have been implemented or have been proposed, in order
to encourage passengers to use more energy efficient transport modes across the EU27
countries. These can be split into the three following categories
To develop and or improve public transport services to encourage and
incentivise passengers to use public transport services, a number of countries
have implemented or proposed measures that further develop, extend or improve
public transport services and infrastructure such as increase transportation links
between cities and airports Cyprus, improve and extend existing metro lines with
construction of organized parking near suburban bus and metro stations Greece,
build new metro lines Greece, Hungary, improvements in the connections and
effectiveness of the existing network Greece, Ireland and interventions in the traffic
network of buses Greece. To provide financial incentives or disincentives a number of countries have
implemented or proposed measures that encourage and incentivise passengers to
use public transport services. A number of countries have implemented or proposed
measures that either increase the cost of travelling by car air using a tax, or
penalties Germany, Denmark, Hungary or subsidise the use of public transport
Germany, Slovenia, France. To provide information and promote behavioural change to encourage and
incentivise passengers to use public transport services, a number of countries have
implemented or proposed measures that provide information, raise awareness
Slovenia, Spain and promote behavioural change, for instance by establishing
information centres or developing website tools Estonia that facilitate the use of
public transport as well as through campaigns or education programmes raising
awareness on the benefits of using public transport. The majority of measures are complementary and not implemented in isolation, thus
combining, improving and extending the existing infrastructure with providing information and
incentives to get passenger to switch from using their cars to public transport. 36
Energy Efficiency Policies in the European Union
Modal shift for freight
A total of 43 modal shift measures have been implemented or have been proposed that
encourage a shift for the transport of goods to more energy efficient modes by further
developing and or improving the transport infrastructure such as the French Sea
motorways measure that supports sea motorway routes between France, Spain and Portugal
and the Spanish measure to encourage the larger participation of railways in passenger and
goods transport aiming to internalise the real road costs and improve the quality of both the
railway service and infrastructure. Other measures focus on financial incentives or disincentives for moving goods from road to
other modes of transport, such as the French measure on developing the infrastructure for
combined transport roadrail, roadriver, short sea shipping by providing grants, or cost
savings for acquiring high-performance combined transport equipment. The German Heavy
goods vehicle toll charge measure sets a distance-based toll, for all vehicles or vehicle
combinations, using the German toll-road network, with a gross vehicle weight of 12 tonnes
or more and designed or used exclusively for goods transport See Section 0 for more
details. Slovenia introduced a measure promoting sustainable freight transport that provides
direct subsidies from the national budget to increase inter-modality and rail freight transport. It should be noted that some measures described in the section focusing on modal shift for
passengers also promote modal shift for freight, for instance, the Operational Programme on
Transport 2007-2013 in Bulgaria, as well as other measures that aim to improve and or
extend the existing railway network e.g.
in Spain, Greece and Ireland.. In particular most
measures that introduce a toll on roads, highways, motorways etc. or that introduce a tax on
fuels used by road vehicles, for instance the German Ecological Tax Reform, encourage a
shift for the transport of goods to more energy efficient and cheaper modes. 4.2.2 Shift to non-motorised modes
A total of 61 modal shift measures have been implemented or have been proposed that
encourage passengers to walk or cycle instead of using a car, by improving and developing
new transport infrastructures and or by promoting cycling or walking. To encourage and incentivise passengers to cycle or walk instead of using a car, a number
of countries have implemented or proposed measures that either develop or improve cycling
and walking infrastructures e.g. Germany, Finland, Belgium in order to increase the
attractiveness of cycling and walking and minimise any safety considerations, or make it
increasingly difficult expensive for people to use cars e.g. Malta, Austria. It should be
noted that the latter types of measures may also promote the use of public transport. To encourage passengers to cycle or walk instead of using a car, a number of countries have
also implemented or proposed measures that promote cycling and walking, either by raising
awareness of the benefits of cycling and walking, through information programmes or
campaigns e.g. car free day campaigns in various cities in Finland, France, Ireland etc. or
by making bicycles readily available. For example, under the Barclays Cycle Hire scheme,
8,300 bicycles are available from 567 docking stations across the city. Casual users can buy
daily or weekly access at a docking station terminal, online or by phone with a credit or debit
card available for non-UK residents as well. Alternatively, regular users can become a
member of the scheme for 3.6, which allows a cheaper annual access fee, and a card key
to release bikes from the docking station. The scheme is intended for short journeys. In
addition to the access and usage charges, there is a late return charge 180 if the cycle is
kept for more than 24 hours or the access period runs out, a damage charge up to 360
and a non-return charge 360. There have been over 14 million cycle hires in the first two
years of the scheme, which launched at the end of July 2010.
The scheme is intended for
relatively short term hire, with charges increasing substantially for longer periods, and
average hire times are less than half an hour 19 minutes on week days and 29 minutes for
weekend journeys. 37
Energy Efficiency Policies in the European Union
In most cases these measures may also promote the use of public transport, in a few cases
the use of more energy efficient modes for transport of goods as well. 4.2.3 Mobility plans
A sustainable mobility plan aims to promote the use of different modes of transport by
implementing several of the measures described in the previous sections.
Key characteristics
of a mobility plan include IDAE, 2006
It is applicable at a local or metropolitan urban level
It covers all applicable modes of transport for both freight and passengers
It reduces adverse effects from transport, reduces traffic in roads, promotes modal
shifts to cleaner and more energy efficient modes
It guarantees the accessibility and demand for municipal mobility
It is linked to national and regional plans
Examples of measures that may be included in such a plan include
Promoting modal shift through campaigns and information programmes such as
walking, cycling and public transport
Promoting more sustainable behaviour and practices e.g. introducing car-pooling,
car sharing, parking management, congestion charges
Improving public transport e.g. optimising public traffic, changing bus routes to more
efficient ones, creating mobility centres, creating bus lanes and tramways, eco-driving
for public transport drivers etc. Improving existing transport infrastructures e.g. developing new cycling paths,
bicycle parking, pedestrian zoneseg motorways of the sea . A few countries, such as Spain and France, have introduced sustainable urban mobility
plans. Other countries have proposed to introduce mobility plans, such as Greece and
Bulgaria in Bulgaria it is called municipal programmes for public transport optimization. Mobility management can be incorporated in mobility plans. The European Platform on
Mobility Management EPOMM is an international partnership that aims to promote and
further develop mobility management in Europe. According to EPOMM mobility management
is a concept to promote sustainable transport and manage the demand for car use by
changing travellers attitudes and behaviour. At the core of Mobility Management are soft
measures like information and communication, organising services and coordinating
activities of different partners.19
Some countries have introduced urban mobility plans at a local level targeting specific
groups or area, e.g. schools and companies in France to promote the use of public or
collective transport either through information provision or grants and subsidies. In Malta
proposed Green travel plans for the public sector target specifically government employees
and large employers in the Valletta Floriana area. In Belgium, the Flemish government
intends to develop cross-network collection services for the transport of schoolchildren, In
Spain, the Action Plan 2011-2020, includes a measure on Transport Plans in firms and
activity centres that aims to establish transport plans for all firms and activity centres such
as industrial estates, leisure centres, hospitals, educational centres, to reduce the number of
journeys from low-occupancy private cars from and to the workplace study place. 19 httpwww.epomm.euindex.php
38
Energy Efficiency Policies in the European Union
4.3 Vehicle Efficiency
4.3.1 Cars
Measures to improve the efficiency of cars, are generally undertaken at the EU level. As
discussed in section 2, the key EU policy to improve the efficiency of cars is a 2009
regulation20 which sets CO2 limits for new passenger cars from passenger cars from 2012. By 2015 the fleet average for each manufacturer for new passenger cars must be less than
or equal to 130 g CO2km with a long term target of 95 g CO2km in 2020. Intermediate
targets are also set, by 2012, 65 of each manufacturers cars must comply with the 130 g
CO2 limit value, 75 in 2013 and 80 in 2014. Manufacturers who exceed the limit will have
to pay an excess emissions premium for each car registered. This premium amounts to 5
for the first gkm of exceedance, 15 for the second gkm, 25 for the third gkm, and 95 for
each subsequent gkm.
From 2019, the first gkm of exceedance will cost 95. The Directive
was brought in after a target of an average emission of 140 g CO2km for new cars sold in
2008, set in an earlier voluntary agreement with the three main car manufacturers
associations for Europe, Japan and Korea21 was not achieved. Incentives to encourage the uptake of more fuel efficient cars, such as graduating car
purchase tax and road tax on the basis of fuel consumption or CO2 emissions, and raising
consumer awareness through the labelling of cars with their fuel efficiency and CO2
emissions are discussed in Section 4.4. Other EU measures to improve the efficiency of cars as driven in the real world include
legislation on tyres and gear shift indicators. A 2009 regulation4 requires all new car models
to be fitted with tyre pressure monitoring systems by November 2012 and all new cars by
November 2014. The systems will alert the driver when the tyre pressure falls by 20 from
its normal warm running pressure, as under-inflated tyres can increase fuel consumption. Tyre pressure monitoring systems are estimated to reduce CO2 emissions by around 2.5
for a typical car Álvarez, 2008. The same Regulation requires all new car models to be
equipped with low rolling resistance tyres by November 2013, and all new cars by
November 2014. A second phase, with stricter rolling resistance limits, will apply for new car
models from November 2017 and all new cars from November 2018. Additional consumer
information will be provided by a tyre labelling scheme which will enter into force in 2012225. The fuel efficiency rolling resistance, wet grip and external rolling noise performances of
tyres will be displayed by means of a grading A-G scale. Expected fuel savings from the
increased use of fuel efficient tyres are estimated at between 2.4 and 6.6 Mtoe million
tonnes of oil equivalent in 2020 depending on the speed of market transformation.
The technical CO2 reduction potential of gear shift indicators is estimated at 6 real
reductions will be lower than this, depending on the degree to which drivers respond to the
indicator. New car models should have gear shift indicators by 2012, all new cars by 201423
4.3.2 Vans and HGVs
Vans
A similar regulation to that setting a limit for CO2 emissions from cars was adopted for vans
in May 201124 new vans on average 175 g CO2km by 2017 and 147g CO2km by 2020,
with the reduction phased in from 2014. Similar penalties as for passenger cars apply to
20 Regulation EC No 4432009 of the European Parliament and of the Council of 23 April 2009 setting emission performance standards for new
passenger cars as part of the Communitys integrated approach to reduce CO2 emissions from light-duty vehicles
21 European Automobile Manufacturers Association ACEA, Japan Automobile Manufacturers association JAMA and Korean Automobile
Manufacturers Association
22 Regulation EC No 12222009 of the European Parliament and Council of 25 November 2009 on the labelling of tyres with respect to fuel
efficiency and other essential parameters
23 Regulation EC No 6612009 of the European Parliament and Council of 13 July 2009 concerning type-approval requirements for the general
safety of motor vehicles, their trailers and systems, components and separate technical units intended therefore
24 Regulation EU No 5102011 of the European Parliament and of the Council of 11 May 2011 setting emission performance standards for new
light commercial vehicles as part of the Unions integrated approach to reduce CO2 emissions from light-duty vehicles
39
Energy Efficiency Policies in the European Union
manufacturers exceeding the limit. The Vans Regulation gives manufacturers additional
incentives to produce vehicles with extremely low emissions below 50gkm. Each low-
emitting van will be counted as 3.52.51.5 vehicles in 2014-151617 respectively. HGVs
In the case of heavy goods vehicles HGVs, there is no EU wide legislation to improve fuel
efficiency. This is partly because agreeing emissions standards for HGVs is much more
complex for HGVs than cars, as the HGV fleet is much more heterogeneous than the car
fleet. There is a diversity of body types, and several types of gross weight class, axle
numbers and variations in the nature of auxiliary equipment, meaning that there is a large
degree of variety, particularly for articulated vehicles. Such vehicles typically combine sub-
systems engines, vehicle body, trailers and ancillary equipment such as refrigeration
produced by different manufacturers, and individual manufacturers therefore, have much less
control over the fuel performance of the final lorry than their counterparts in the car sector
McKinnon, 2008. A number of countries have sought to improve the energy efficiency of HGVs and the
efficiency with which they are operated however, using a variety of policies and measures. Denmark has a subsidy scheme to improve the aerodynamic performance of trailers.
In the UK there is a competition run to bring the developers of some of the most
promising technologies for improving fuel efficiency to the attention of key vehicle and
component manufacturers and fleet operators. An approach being trialled in Denmark and the Netherlands focuses on improving the
overall efficiency of freight transport is the use of longer road trains. While European legislation controls the maximum dimensions of vehicles, and the
maximum weight that guarantees free circulation within the EU, it permits trials and
the use of longer, heavier vehicles under certain strict conditions within national
boundaries. Long road trains of 25 m are permitted on the major part of the road
network in Finland and Sweden, where transport distances are often large, and are
also used in Germany. The trial in Denmark, which began in 2008, has allowed longer
road trains on a limited road network consisting mainly of motorways and other
intercity roads, but also a number of roads connecting company sites to the
designated road network. The longer road trains offer fuel savings of 15 per tkm. In
the Netherlands, a large scale five year trial, which will end in November 2012 has
been assessing, fuel savings and impacts on traffic safety, infrastructure and modal
split. To date, experience has been positive and if the final evaluation confirms this,
then longer heavier vehicles will become the normal combination in the Netherlands. Another approach taken to improving the overall fuel efficiency of freight transport is
the use of voluntary agreements. In France, a voluntary agreement charter, drawn up
in partnership with the trade associations, the National Federation of Road Carriers
FNTR and the Federation of the Haulage Companies and Logistics of France TLF
was launched in 2007. The number of companies signing the charter has risen
significantly each year, and by the end of 2010, 233 road transport companies
running more than 44 000 vehicles had signed up. Companies make a commitment
for 3 years, developing a plan with concrete actions to decrease their fuel
consumption. The target reductions agreed by the end of 2010 equate to a reduction
of around 8 in fuel consumption per unit of activity. In Finland, the Government has
an Energy Efficiency Agreement for Freight Transport and Logistics, with the Finnish
Transport and Logistics SKAL and its member associations, the Association of
Logistic Enterprises in Finland LL and the rail company VR. The agreement which
covers the period 2008-2016 is a continuation of former agreements and programmes
in the sector and is intended to realise about one-third of the total savings target for
the transport sector set in the NEEAP. It sets a numerical target for participants of a
1 annual improvement from 2008 to 2016 in the specific energy consumption
MJtonne-km of freight transport, and the aim is for 60 of the companies or
40
Energy Efficiency Policies in the European Union
registered vehicles in the sector to be covered by the agreement. Rather than signing
an agreements, companies register by joining EMISTRA Use of the Energy and
Environmental Accounting and Reporting System for Transport and Logistics Sector,
a nationwide energy and environmental accounting and reporting system for transport
and logistics businesses. In Denmark businesses and municipalities and can commit to a reduction in fuel
consumption though the green certification scheme of the Danish Transport Authority. To achieve certification, participants, must map their fleet and fuel consumption and
set a CO2 reduction target to be achieved within the following year, with an action
plan detailing the CO2 reducing projects to be implemented e.g. by introducing more
energy efficient vehicles and making more efficient use of existing fleet.
They must
evaluate and report progress after one year, after which they can be recertified if they
achieve their goal and set a new CO2 reduction target for the following year. 4.3.3 Public transport
In Finland, the voluntary agreements approach used in the freight sector is also being used
to improve energy efficiency in the public transport sector. In Finland, there is a voluntary
agreement between the Government and the Finnish Bus and Coach Association LAL and
the VR rail company long-distance transport, which individual companies join by signing an
Association Agreement. The aim is for 80 of public transport in 2016 to be covered by the
agreement and for signatories to achieve a 1 annual reduction in energy consumption in
the public transport covered by the Agreement during the 20082016 period. Participants
must adopt a recognised environmental management system, such as ISO 14001, EMAS or
BAK, must report their fuel consumption and other energy consumption data into a database,
to allow monitoring of energy efficiency. Annual monitoring reports will be prepared, and after
every three years, the scheme will be evaluated to establish whether it needs to be reviewed. France is also planning to extend the scheme where road transport companies make a
commitment to reduce CO2 emissions to road passenger transport. More generally, in the longer term improvements in the energy efficiency of public transport
fleet should be aided by the European Directive 200933EC on the promotion of clean and
energy-efficient road transport vehicles. This requires that public authorities and some other
operators, take into account the impact of energy consumption, CO2 emissions and other
pollutant emissions during the operational lifetime of the vehicles, either by setting technical
specifications for energy and environmental or including energy and environmental impacts
in the purchasing decision. This could be of particular importance in some of the newer
Member states, where public transport has a relatively high share of passenger mobility, but
the fleet is relatively old and inefficient. In Estonia, renewal of the public transport sale has
been aided by revenue from the sale of assigned amount units AAU to Spain under a green
investment system GIS. From the first sale in July 2010, 21million were invested in about
100 energy efficient and environment friendly buses which will replacing the most out-of-date
vehicles in use on regional and outlying urban routes. 45 million from the second sale in
May 2011 will be invested in about 15 modern city trams, for the city of Tallinn which will use
electricity generated from renewable energy sources.
Currently, the average age of trams in
Tallinn is 25 years. 4.4 Encouraging Uptake of Cleaner Vehicles
4.4.1 Labelling
The majority of labelling policies are aimed at passenger cars, however there are a few
policies that are aimed at tyres, road freight vehicles, and France has a labelling policy for
aviation. There are 34 transport-related labelling policies in the MURE database, 80 are
related to new vehicles and 70 are aimed at cars or passenger vehicles. 41
Energy Efficiency Policies in the European Union
Car Labelling
The EU vehicle labelling Directive25, requires for new passenger cars that
information on fuel economy and CO2 emissions is shown on a fuel economy label
to be displayed at the point of sale
a guide on fuel economy and CO2 emissions should be available at the point of sale
and from designated bodies
a poster or a display showing the official fuel consumption and CO2 emissions
data of all new passenger car models displayed or offered for sale or lease at, or
through, the respective point of sale
all promotional literature must contain the official fuel consumption and specific CO2
emission data for the passenger car model to which it refers. These minimum requirements have been implemented in all Member States, but some have
gone beyond the Directive in terms of additional legislative and voluntary requirements for
the information tools. In addition some countries have extended the car labelling scheme. For example, Denmark
has extended the scheme to Light Goods Vehicles and introduction of a similar scheme is
planned for France from early 2012. The UK enables a label for used cars to be generated
on a voluntary basis including the same information as the required label for new passenger
cars data are available for cars registered from 2001. An online database was initially
developed by the Low Carbon Vehicle Partnership LowCVP with support from the Retail
Motor Industry Federation, the Society of Motor Manufacturers and Traders and the UK
government the scheme was originally run by the Vehicle Certification Agency VCA, but is
now provided by two external organisations. Dealers register with the organisation, and can
them submit registration details for the used vehicle online to receive a label participation is
free. Finland also has a scheme for labelling used cars, and France is considering
introducing a mandatory label for used car registered from 2004. France is also considering
introducing mandatory labelling for car rentals longer than three months. In Finland, a revised CO2 label, which more closely resembled the energy efficiency labels
for consumer appliances, was introduced in 2010. Use of the new label, which makes
comparison between cars of different sizes easier as ratings also take into account the
vehicle weight, is voluntary.
As well as fuel efficiency data, the EU CO2 emission limit for the
same weight category is given, together with emissions of pollutants and fuel costs based on
an assumed annual mileage of 18 000 km mileage per year. 4.4.2 Taxation
Road transport
One of the most common fiscal instruments used to encourage the uptake of more energy
efficient vehicles or modal shift is taxation. In the case of road transport, a wide range of
taxes apply, including
annual circulation tax road tax,
vehicle purchase tax,
infrastructure charge tolls on specific parts of the network, e.g. motorways, tunnels,
bridges,
parking fees,
congestion charge,
company car taxation
fuel excise tax
25 Directive 199994EC on Passenger Car Labelling on fuel economy rating
42
Energy Efficiency Policies in the European Union
insurance tax
Car Purchase and Circulation Taxes The two most commonly used tax related policies to
encourage the uptake of cleaner vehicles are differentiation of car registration taxes paid on
purchasing a car, and annual circulation tax on the basis of energy efficiency. Historically, car
purchase taxes in most countries were usually linked to the type of fuel, size of car and
status private versus company. However 16 Member States and Norway have now
introduced registration taxes which are dependent on the fuel efficiency or CO2 emissions of
the vehicle. These vary from systems offering rebates for cars with low CO2 emissions and
surcharges for high CO2 emissions to simple banding systems based on CO2 emissions, and
to systems where tax is calculated as the product of CO2 emissions per km and a value per g
of CO2, which increases the higher the CO2 emissions rate. There are also hybrid systems
which also take into account engine size or the classification of the car for other emissions. In
the case of Austria, which was the first Member State to introduce a differentiated, scheme
based on fuel consumption in 1992, the tax was reformed in 2008 to a bonusmalus system
where cars with relative low CO2-emissions get tax breaks and cars with higher CO2-
emissions have to pay a higher tax. Fewer Member States seven have a differentiated
system for annual road tax. Table 4-2 Date of introduction of differentiated tax rates
Year
Car Purchase Tax
1992
2000
2002
2006
2007
2008
2009
2010
2012
Annual tax
1997
1998
2006
2008
2010
Member States
Austria
Denmark
UK company cars
Cyprus, France, Netherlands, Portugal
Luxembourg, Norway
Spain, Finland, Ireland
Germany
Greece, Latvia, Slovenia, UK private cars
Belgium
Denmark
UK
France company cars only, Sweden
Netherlands, Ireland
Finland
Infrastructure Charges While a number of countries have some toll roads where a charge
is made for all vehicles using the road, a number have introduced tolls specifically aimed at
heavy goods vehicles, with the aim of encouraging the use of less polluting vehicles,
maximising the efficiency of freight distribution, and encouraging modal shift of freight. Examples of such schemes in the New Member States are planned or exist in Latvia or
Poland. One of the most innovative schemes, which is much more targeted, is the distance based
HGV toll system in Germany which uses GPS satellite systems, rather than conventional toll
booths, and links charges to the vehicles emissions category. Revenue from the system is
intended to be used to subsidise rail and water transport infrastructure. 43
Energy Efficiency Policies in the European Union
France is also introducing a levy on HGVs to encourage modal shift for long distances
transport and improvements in freight logistics. Legislation in 2009 paved the way for the
introduction of a charge on a per kilometre basis for HGVs using the national road network
where tolls are not already in place. The levy collected will be allocated to the Agency
responsible for the national road network to finance improvements in the road infrastructure. It is planned that implementation and operation of the scheme will be carried out by a third
party, under a public-private partnership contract, but due to legal challenges in the process
of appointing a supplier, the scheme has not yet begun.
26 26 for short haul to 188 for long haul converted at 10.86
27 Egmond, and de Jong, 2010. Aviation Taxes, Capgemini Nederland B.V, Utrecht
44
Energy Efficiency Policies in the European Union
4.4.3 Electric vehicles
The range and magnitude of incentives for the uptake of electric vehicles is particularly wide
and may consist of grants, reductions in taxes and exemptions from taxes and other charges
e.g. parking charges. Some countries use a combination of different measures for example
Portugal awards a premium for purchase of electric vehicles, as well as exempting them from
circulation and registration taxes. There are over 40 policies spread across 16 EU countries aimed at increasing the uptake of
electric vehicles, nearly half of which were put in place since 2008. Of the total policies, three
quarters are still ongoing and more are planned to start in 2012. A definition of the different types of electric vehicle is set out in Box 5.6. Studies28 indicate that the most significant barriers to the uptake of electric vehicles relate to
High upfront cost the premium is currently around 15,000 to 40,000, per vehicle,
potentially decreasing to 5,000 in the longer term ETC, 2009. The cost of charging
an electric car is lower than the cost of refuelling a petrol vehicle however, there is
extensive evidence that consumers are more influenced by purchase prices and do
not take into account savings over the lifetime of the vehicle Ecolane, 2011. Issues related to charging limited range, inconvenient charging and lack of
charging infrastructure. Range anxiety is the fear of being stranded due to
insufficient battery capacity. Electric vehicles will usually meet the daily needs of
most users, however, typical home charging points take 7-8 hours to charge a
battery, which can be inconvenient. Box 4-2 Definition of electric vehicles
The term electric vehicles may encompass several different types of configuration including
Battery electric vehicles BEV run on the battery alone, and have no auxiliary on-board
power. Extended-range electric vehicles EREV the battery is the main energy source, but a
combustion engine driven range-extender running on hydrocarbons is used to sustain the battery
where distances exceed the electric range. Plug-in hybrid electric vehicles PHEV the battery is the main energy source, but a combustion
engine running on hydrocarbons is used after batteries are depleted. Conventional hybrid electric vehicles HEVs, where the drive comes from the internal combustion
engine as opposed to the electric motor, are not in this study considered to be electric vehicles, but
may still be included in the scope of some EU policies. Grants
To address the high upfront costs of electric vehicles, the most frequently used financial
incentives are
1. Reductions in car registration tax covered in section 5.2 above
2. Reductions in annual circulation tax covered in section 5.2 above
3. Grants at the point of purchase. Grants for the purchase of electric vehicles have received much attention in Europe. Grants
at the point of purchase refer to bonuses or reductions in price when a vehicle is bought, as
opposed to other measures where the consumers claim a rebate back later e.g. through
28 Studies include Element Energy , 2009 ARUP, 2008 and FIA, 2011. 45
Energy Efficiency Policies in the European Union
reductions in personal income tax. In the UK, the maximum level of subsidy is 5,000
5,720 or 25 of the vehicle purchase price. The total budget is 43 million 49.2 million,
which would support the sales of 8,600 vehicles assuming each EV purchaser receives the
maximum subsidy of 5,000. Luxembourg offers up to 3,000 per vehicle provided the
purchaser agrees to buy electricity from renewable energy sources. In Portugal, purchasers
of the first 5,000 electric vehicles can receive a premium of 5,000, and could qualify for an
additional 1,500 if they simultaneously scrap their old car. The UK implemented its Plug-in Car grant scheme in January 2011 to encourage the uptake
of ultra low emissions vehicles ULEVs.
Spain has implemented a grant scheme to
encourage the uptake of EV and PHEV, allowing grants of up to 6,000 per electric vehicle
This action is funded with an M240 budget M 80 in 2011 M160 in 2012. Infrastructure
Public charging infrastructure is an important means of counteracting range anxiety, which
is the fear of being stranded due to insufficient battery capacity. Although most trips can
easily be accommodated by modern electric cars, consumers prefer to buy cars that are
capable of much longer distances. For instance, over 80 of car journeys are below 20km,
and most Europeans drive less than 40km per day ETC, 2009. Vehicle range and
inconvenient charging, are starting to be addressed by improvements in technology, for
example extended range vehicles, fast charging 3-4 hours and rapid charging 30 minutes as
opposed to 7-8 hours slow charging, and new business models such as battery hire
combined with battery swapping stations reducing charging time to several minutes. Lack of charging infrastructure is being addressed by a number of EU countries by
implementing regional policies and programmes to increase access to charging points along
strategic transport routes and in major cities, as uptake of electric vehicles is likely to be
higher in cities compared to rural areas. For example schemes to increase the availability of
charging points have been implemented in Amsterdam, Berlin, London, Paris, Switzerland,
and Denmark. City programmes serve as demonstration projects to gather data on consumer
behaviour which can be used to improve subsequent projects. City authorities may partner
with a private firm to ensure consistency and compatibility across all charging points. In many
cases, access is controlled by cards which enable users to be billed on a subscription or pay-
per-use basis. Standardisation is a particular concern in terms of battery layouts and plug design, as a
harmonised standard will likely need to be in place before significant rollout. The European
Standardisation Organisation has been mandated to develop a common charging system.
A
further issue is related to the use of a common billing system in order to ensure
interoperability between different areas. 4.4.4 Scrappage schemes
Scrappage schemes have been introduced in several Member States to further drive the
replacement of old inefficient vehicles with new more fuel efficient vehicles and cover
primarily passenger cars. Table 4-3 shows a comparison of the different car scrappage
schemes in place in early 2010. Some countries have also introduced scrappage schemes
for HGVs and buses for example Croatia has a subsidy programme to encourage the
scrapping of older , less efficient HGVs and school buses Euro 0,1,2 or3 and replacement
with Euro 5 compliant vehicles. In the majority of countries, scrappage schemes for older inefficient cars have been
combined with incentives for purchasing new, efficient or low CO2 emitting cars, thus making
it an integrated measure. The scheme in France, the Bonus-Malus scheme includes a
penalty for purchase of cars with the highest CO2 emissions, which is intended to make the
scheme revenue neutral. 46
Energy Efficiency Policies in the European Union
Table 4-3 Summary of existing scrappage schemes
Country
Austria
Cyprus
France
Germany
Greece
Italy
Ireland
Main characteristics of scheme
Purchase a new car minimum Euro-4 and scrapping a
vehicle 13 years old. Scrapping car 15 years old only, or scrap and purchase a
new car with fuel economy max 7 litres100km or max 5
litres100km. Scrap car 10 years, new car with CO2 160gkm, or LCV. Scrap car 9 years, purchase new car minimum Euro-4, and
1 year old. Scrapping a car registered pre-2005, not necessary to
purchase new car. Or purchase new car or LCV, minimum
Euro-4 or Euro-5. Scrap car or LCV 9 years, new car CO2 max 130gkm
diesel or 140gkmgasoline petrol. Scrapping car10 years old and buying new car CO2
140gkm gives relief on Vehicle Registration Tax. Incentives
1,500
6751,700
1,000 plus rebate
up
to 5,000, and
bonus in new if low
CO2
2,500, tax rebate if
Euro-56
5003,200
5003,700 LCVs
Cars
1,5003,000 Cars
2,5006,000 LCVs
up to 1,500
Luxembourg Scrapping car 10 years old, and purchase new car
1,5001,750
CO2120gkm, diesel PM5mg or new car CO2 150gkm. Netherlands Buying a new vehicle and scrapping gasoline petrol vehicle
13 years, or buying a new vehicle and scrapping a diesel
vehicle 9 years old. Scrap a car 10 years old, or 15 years old and buy new car
CO2 140gkm.From August 2009, scrap a car 8 years old,
or 13 years old and buy new car CO2 140gkm. Portugal
Romania
Slovakia
Spain
UK
Scrapping a car 10 years old
Purchase new car maximum 25,000 price, scrapping car 10
years old. Vive plan, 0 loan to 10,000, new or used car 5 years,
max 140gkm, and LCV max 160gkm Scrap 10 years, fitted
ESC. with
Plan2000escrap 10 years or 250,000km, and buy new
car max CO2 140gkm car, lower threshold of 120gkm or
LCV max 160gkm.
Scrap car 10 years, purchase new car. sensors
seat
and
belt
7501,000 1,000
1,750
incentive
1,0001,250
purchase
1,2501,500
purchase incentive
Approx 900
1,0001,500
2,000
2,000
2,000
incentive
equivalent
purchase
2,000
Source MURE Database and IHS Global Insight, March 2010
4.5 Driver Behaviour
4.5.1 Traffic managementspeed limits
The specific fuel consumption of cars l100 km is generally at a minimum at speeds of
around 90 km29 per hour, and decreases as speeds rise above this. The idea of using more
stringent speed limits to reduce travelling speeds on motorways and thereby cut fuel
consumption and transport emissions has received much attention recently, as it could have
an immediate effect on fuel consumption and emissions. Current motorway speed limits differ
across EU Member States, varying from 110 to 130 kmh with some countries also apply
variable speed limits related to traffic and weather conditions. Modelling of a reduction in
29 httpwww.guardian.co.ukenvironmentgreen-living-blog2011mar25hypermiling-tips
47
Energy Efficiency Policies in the European Union
motorway speed limits from 120 kmh to 110 kmh suggest that in practice this might reduce
the fuel consumption of cars by 2 for diesel cars and 3 for petrol cars30. In 2011, as part
of an effort to reduce the national energy bill in the face of the oil price spike caused by the
unrest in Libya and elsewhere in the Arab world, Spain reduced speed limits on its
motorways from 120 to 110 kmh. Stickers with the new speed limit were applied to 6,150
signs, at a cost of 230,000. The temporary restriction was lifted at the end of June, with the
Spanish Government reporting that it saved 450 million on fuel costs31, although this was
disputed. Several other countries have legislative measures in place to reduce andor regulate speed
limits for various different vehicle classes ie Bulgaria, Estonia, Finland, France, Hungary,
Ireland, Luxembourg, Malta, Netherlands, Norway, Poland, Romania, Sweden, and United
Kingdom. However these measures are typically driven by other factors such as safety
concerns rather than their contribution to improved fuel economy and fuel savings., and
cannot really be considered as energy efficiency measures. Reducing speed limits on motorways or ensuring more stringent enforcement of existing
limits, will mainly deliver fuel savings from cars, as the speed of HGVs and buses with more
than 8 passenger seats is set by a European Directive 200285EC which requires that
speed limiters are fitted to restrict the speed of HGVs to 90 km per hour and buses to 100
kmh, which is close to the optimum speed for fuel efficiency. 4.5.2 Eco-driving
Eco-driving often refers
techniques training courses, awareness raising
campaigns that enable drivers to optimise their car fuel economy. Several countries have
on-going measures in place. to driving
Examples of schemes to encourage Eco-driving, in the passenger, freight and rail sectors
are
Austria Eco-drive campaign and competition
Netherlands Het Nieuwe Rijden, This programme promotes more efficient driving
methods for car drivers and professional drivers including freight. Germany Rail eco-driving scheme Activities of Deutsche Bahn The Deutsche Bahn
set specific CO2 reduction targets for the period 2002 to 2006 for their passenger
transport, rail freight transport, and logistics business areas. The business areas
themselves can choose the measures to meet their respective targets. United Kingdom SAFED This programme was specifically aimed at vans, HGVs,
bus and coach drivers.
It consisted of a one day complimentary driver development
course combining driver training and assessment. Spain Action Plan 2011-2020
Apart from country specific initiatives there are also European wide eco-driving initiatives
such as ECO DRIVEN, a eco-driving campaign that covers 9 countries and is aimed at
drivers of passenger cars, delivery vans, HGVs and buses.
Another example would be the
ECoWILL project32 focusing on reducing carbon emissions by 8Mt by 2015 through
implementing more fuel efficient driving across Europe. 30 httpwww.eea.europa.euthemestransportspeed-limits
31 httpsuite101.comarticleconfusion-over-spain-speed-limit-u-turn-a377305
32 httpwww.ecodrive.orgenhomeecowill_the_project
48
Energy Efficiency Policies in the European Union
4.5.1 Optimised logistics
Freight logistics
Another approach taken by countries to improving the overall fuel efficiency of freight
transport is through fleet managementfleet logistics, such as voluntary agreements which
are already covered in section 0. An example is the management of road transport fleets in
Spain As part of the basket of measures on More Efficient Use of the Means in the
Transport Sector within the Action Plan 2011-2020, Spain introduced a measure to improve
the management of the road transport fleet in order to achieve a reduction in the specific
consumption per ton or transported passenger.
This includes for example the establishment
of minimum criteria in terms of efficient fleet management so as to grant licences to collective
passenger and goods transport companies, economic incentives for audits and the
conduction of training campaigns aimed at professionals of transport fleets, as well as the
definition and grant of the suitable accreditation to all those firms having an efficient fleet
system management in their organisation. Car Sharing
Energy efficiency of passenger transport can also be improved through soft measures such
as limiting the number of trips made or making car journeys more efficiency by utilising the
maximising the capacity of passengers by car journey, i.e. car sharing. Belgium is trying to incentivise car sharing through measures such as reserving a lane of
traffic to make car sharing more attractive commuters travelling by car represent 20 to 30
of road traffic. The highway code was modified in 2003 to allow the road system manager to
reserve a lane of traffic not only to public transport vehicles, but also to private vehicles
occupied by more than one passenger. France introduced the car club, which is defined as making a fleet of motorised land
transport vehicles available to subscribing users on a shared basis. Each subscriber may
have access to a vehicle, without a driver, for the journey of his or her choice and for a
limited period. A car club label is currently being defined at national level and will be the
subject of a decree stating the terms of its award and use. Town hall authorities may reserve
parking spaces for vehicles with this label. A CERTU study concerns mechanisms for
encouraging the use of alternatives to private cars in European countries, including car clubs. The study has been finalised but has not yet been made public. Similar measures are in
place in the United Kingdom e.g. Streetcar, City Car Club. Horizontal cross cutting measures
Horizontal cross cutting measures are defined as measures that have successfully been
implemented in other sectors than transport and are now introduced to the transport sector to
improve energy efficiency. One example is White Certificates Scheme for Transport in
France The White Certificates Scheme was launched in France in 2005, with the first
obligation period running from 2006 to 2009, and placing obligations for energy suppliers the
tertiary and residential sectors to achieve energy savings by promoting energy efficiency
measures to their customers. In 2010 the scheme was expanded to include transport fuel
suppliers whose annual sales exceed a certain threshold. They will be required to achieve
savings of 30 TWh cumac per year, or a total of 90TWh over the second obligation period
January 2011 to December 2013. The obligation is shared between suppliers according to
their sales.
through priority access to car parking or reducing
journey times, by allowing car sharers access to reserved lanes on roads. 51
Energy Efficiency Policies in the European Union
5 Energy Efficiency Policies in the EU
Industry Sector
5.1 The portfolio of
industrial energy efficiency
measures
5.1.1 Policy context for energy efficiency in industry in Europe
At the end of 2006, the EU pledged to cut its annual consumption of primary energy by 20
by 2020. Despite substantial steps taken towards this objective, recent Commission
estimates suggest that the EU may only achieve half of the 20 objective. In June 2011, a
new set of measures for increased energy efficiency, namely the Energy Efficiency Directive,
was proposed by the European Commission to fill the gap. The proposed directive brings
forward measures to step up Member States efforts to use energy more efficiently at all
stages of the energy chain. At the EU level energy efficiency in industry is seen as a matter of competitiveness as
substantiated in EUs Energy Efficiency Plan 2011 which preceded the proposed Energy
Efficiency Directive. The Plan proposes the following measures for industry energy efficiency
requirements for industrial equipment, improved information provision for SMEs, energy
audits and energy management systems. In energy for industry, the whole energy supply
chain is addressed.
Research and innovation are seen as catalysts for cost-effective energy
efficient technologies in industry. European Commission 2011a
The 25 IEA recommendations 2011 for energy efficiency include actions also in industry
see section Erreur ! Source du renvoi introuvable.. Recent IEA analysis concludes that
substantial opportunities to improve industrial energy efficiency exist OECDIEA 2011. According to the IEA, much of this potential can be captured through policies for promoting
use and optimisation of energy-efficient industrial equipment and systems, and improving
overall efficiency through energy management. The European Commission has not yet published analyses of the second National Energy
Efficiency Action Plans NEEAPs, which each of the Member States is required to issue by
the Energy Services Directive. The first NEEAPs were to be submitted to the Commission by
June 2007 and the second NEEAPs by June 2011. The analysis of the first NEEAPs and
information collected on their implementation status in 2010 shows that while most NEEAPs
have focused on the building sector, also the number of measures implemented to trigger
energy savings in industry and industrial buildings has been relatively high European
Commission 2011c. The European Commission 2009 points out that particularly three
Member States, namely Hungary, Malta and the Slovak Republic, place a strong focus on
energy efficiency in industry, and expect the highest share of savings to come from industry
measures. 5.1.2 Overview of energy efficiency measures for industry
As of January 2012, the MURE database contained a total of 289 industry measures, out of
which 183 were in operation the others 106 were either not active any more or were being
planned. Financial measures have been in the core of the policy mix for industry over the last two
decades. While co-operative measures principally voluntary agreements were introduced
frequently in the early 1990s and they have remained in the policy mix, new schemes have
been introduced less frequently in the past decade. Information measures are diverse
52
Energy Efficiency Policies in the European Union
measures ranging from information campaigns to energy audits and training. Their role has
grown. Legislative and fiscal measures are less often implemented in industry.
However,
when cross-sectoral measures in industry are analysed in more detail, energy and
environmental taxes and pollution charges listed within this group of measures augment the
relative importance of fiscal measures. EU Emissions Trading is an important market-based
instrument applied in industry in all EU Member Countries. If we look only at measures introduced during the period of the on-going economic and
financial turmoil, i.e., starting from 2009, there is not much change in the dispersion of
measure types among the 41 measures launched thereafter. Financial measures still
dominate and informative measures have a significant role. There is a slight increase in
legislative measures, driven both by national implementation of EU measures and by new
national measures. It is plausible that countries did not cut financial support immediately after
the start of the recession in order to stimulate the economy. However, more recent signals
indicate that reductions are starting to take place. Energy efficiency improvements are hindered by various barriers, each of which need to be
addressed by different types of measures. This is done best by developing a balanced policy
mix which includes several types of measures. The adopted policy mix varies significantly
from country to country Figure 5-1. Figure 5-1 On-going Measures by Type and by Country
Note Some caution is needed while analysing the figure because there is some variety in how
countries package their measures. Some countries have reported lager packages of measures as one
measure while others split them into several independent measures. EU policies and measures for
energy efficiency in industry
Source MURE database, January 2012
5.1.3 EU energy efficiency policies for industry
In addition to national measures, the MURE database also includes common European
measures for industry Table 5-1. However, the voluntary labelling of electric motors has
been replaced by the Eco-design Directive. 53
051015202530LithuaniaMaltaAustriaCzech RepublicCroatiaDenmarkSloveniaSpainHungaryPolandCyprusPortugalGreeceLuxembourgBulgariaEstoniaIrelandNetherlandsRomaniaNorwayBelgiumItalySlovakiaSwedenFranceFinlandUnited KingdomLatviaGermanyNumber of measuresLegislativeFinancial, fiscal, tariffsNew Market-based InstrumentsInformationEducationTrainingCo-operative MeasuresCross-cutting with sector-specific characteristics
Only the CHP Directive has been classified as a high-impact measure33 and emissions
trading as a medium-impact measure. Other measures are expected to have low impact or
their impact is unknown. Energy Efficiency Policies in the European Union
Table 5-1 EU Measures for Industry in the MURE Database
Code
Title
Status
Type
EU2
Voluntary labelling of electric
motors CEMEPEU
Agreement
Complete
d
EU1
Motor Challenge Programme Ongoing
EU3
EU9
E2MAS
Combined Heat and Power
Cogeneration Directive
20048EC
Unknown
Ongoing
Co-operative
Measures,
InformationEducation
Training
InformationEducation
Training
LegislativeInformative
LegislativeNormative
Starting
Year
2000
Semi-
quantitativ
e Impact
Low
2002
Low
2003
2004
Low
High
EU14 Community framework for
Ongoing
FiscalTariffs
2004
Low
the taxation of energy
products and electricity
200396EC
EU Emissions Trading
Scheme 200387EC
EU4
EU10 Efficiency reference values
for electricity and heat
production
EU11 European Green Light
Programme
Integrated Pollution
Prevention and Control
Directive IPPC 20081EC
EU13
EU12 Amended EU Emissions
Trading Scheme
200929EC
Source MURE database, January 2012
Ongoing
Ongoing
New Market-based
Instruments
LegislativeNormative
2005
2007
Ongoing
Ongoing
Co-operative
Measures
LegislativeInformative
2007
Low
2008
Low
Ongoing
New Market-based
Instruments
2012
Medium
Also some cross-sectoral measures have considerable industry relevance. Of particular
interest is the Eco-design Directive for Energy-using Products Directive 200532EC and its
recast for energy-related products Directive 2009125EC.
The Eco-design Directive is
discussed in more detail in section 0. Furthermore, the cross-sectoral measures include
those for renewable energy and taxation as well as the Energy Services Directive. Emissions trading
The European Emission Trading Scheme EU ETS was launched in January 2005. The EU
ETS covers around 11 000 large greenhouse gas emitting installations in the energy and
industry sectors combustion installations with a rated thermal input capacity of at least 20
MW, as well as refineries, coke ovens, steel plants, and installations producing cement
clinker, lime, bricks, glass, pulp and paper provided that they exceed the threshold
production levels given in Annex 1 of the ETS Directive. In total, the EU ETS covers about
33 In MURE, each measure is classified with a qualitative impact label high, medium, low or unknown if no qualitative impact evaluation has
been done. The impact of a measure is high if the corresponding savings are equal to or higher than 0.5 of the final energy consumption of the
entire sector. The impact is medium if the savings are between 0.1 and 0.5, and low if they are less than 0.1 of the final energy consumption
of the entire sector.
The classification is made by national teams for national measure and by the MURE management team for European
measures. 54
Energy Efficiency Policies in the European Union
50 of Europes CO2 emissions and 40 of its total greenhouse gas emissions. The ETS
now operates in 30 countries the 27 EU Member States plus Iceland, Liechtenstein and
Norway. The EU ETS was governed by the EU ETS Directive 200387EC. It was substantially
revised in 2009 200929EC and the provisions of the Directive are required to be
transposed into national law by 31 December 2012. The new regulations describe the revised operation of the EU ETS from 2013 onwards, i.e.,
the third trading period. Specifically, the regulations mandate the national authorities to
collect duly substantiated and verified emissions data from installations that will only be
covered by the EU ETS starting from 2013. The exclusion of certain small installations may
be considered which are subject to measures that will achieve an equivalent contribution to
emission reductions.
Furthermore, the European Environmental Agency has been appointed
as an auctioneer, which is required under the Commissions regulation. For phases 1 2005-2007 and 2 2008-2012 individual Member States developed country-
specific National Allocation Plans NAPs. NAPs will no longer be required in the third trading
period which introduces a European wide scheme. The main allocation principles are
auctioning for the energy supply sectors and benchmarking for industrial companies. Energy taxation
Environmental taxes can be divided into four broad categories energy, transport, pollution
and resource taxes. Energy taxes are by far the most significant, representing around three
quarters of environmental tax receipts in Europe. Eurostat 2011
According to Eurostat 2011 environmental taxes have not been growing in recent years at
the EU average level. A steady fall in the level of environmental taxes can be observed from
2003 onwards up to around 2008, after which there was an upturn following excise duty
increases in several countries namely Bulgaria, Czech Republic, Denmark, Estonia, Greece,
Hungary, Latvia, Lithuania, Romania, Slovenia, Spain. Only Italy, Poland and Slovak
Republic cut the excise duties on energy. There has been real value erosion in energy taxes
while the level of other environmental taxes on transport and resourcespollution has
remained relatively constant. This, however, concerns all energy using sectors together, not
just that in industry. Eurostat 2011
Community framework for the taxation of energy products and electricity Directive
200396EC sets minimum rates of taxation, including those for industry Table 5-2.
However, energy products and electricity are only taxed when they are used as motor or
heating fuel, and not when they are used as raw materials or for the purposes of chemical
reduction or in electrolytic and metallurgical processes. Table 5-2 The Minimum Levels of Taxation Applicable to Fuels for Industrial Use
Fuel
Diesel 1000 litres
Kerosene 1000 litres
Liquefied petroleum gas LPG 1000 kg
Natural gas gigajoule
Current minimum excise rates
21
21
41
0.3
Source MURE database
IPPC Directive
The IPPC Directive Integrated Pollution Prevention and Control Directive latest amendment
20081EC requires industrial and agricultural activities with a high pollution potential to have
an environmental permit. This permit can only be issued if certain environmental conditions
55
Energy Efficiency Policies in the European Union
are met, so that the companies themselves bear responsibility for preventing and reducing
any pollution they may cause. Integrated pollution prevention and control concerns new or existing industrial and
agricultural activities with a high pollution potential, as defined in Annex I to the Directive
energy industries, production and processing of metals, mineral industry, chemical industry,
waste management, livestock farming, etc.. In order to receive a permit, the installation must use energy efficiently. Among other
requirements, it also has to use the best available techniques BAT which reduce
environmental impact as a whole, however, taking into account local considerations such as
the technical characteristics of the installation and any special needs of the local
environment. The requirement for efficient use of energy is reinforced by Directive 201075EC on
industrial emissions, which the Member States shall transpose to national legislation by
November 2012. The Industrial Emissions Directive makes the requirements for best
available technologies described in so-called BREF documents binding. Eco-Design Directive
The Eco-design directive for energy-related products Directive 2009125EC has direct
impact on the efficiency through regulation on the efficiency of industrial process equipment
such as electric motors, pumps, compressors and industrial ovens. Furthermore, it has
significant indirect impact because the manufacturing industries must consider the energy
efficiency and other environmental qualities of their energy-related products over their
lifecycle. Only a couple of countries have introduced national minimum energy performance standards
for industrial equipment. German Large-Scale Combustion Plant Ordinance 1983, last
revised in 2009 caps the major emissions components of combustion plants with at least
50 MW of heating capacity. By capping the carbon dioxide emissions, energy consumption is
curbed. Latvia issued energy efficiency requirements in 2010 for district heating systems.
The requirements concern heat production boilers and CHP units feeding district heating
systems as well as heat losses in district heat network. Energy Efficiency Directive EED
The Energy Efficiency Plan 2011 is a strategic document issued by the EU in March 2011
European Commission 2011a. In June 2011, it was translated into a proposal of a new
directive, provisionally known as the Energy Efficiency Directive EED which, after long
discussions with the Member States, was adopted on 25 October 2012 as Directive
201227EU on Energy Efficiency. The directive repeals both the Energy Services Directive
200632EC and the CHP Directive 20048EC. The new directive addresses industry in
several different ways. It introduce measures for energy efficiency in the manufacturing
industry for energy transformation including CHP for energy transmission and distribution
and it mandates energy suppliers to help customers to save energy Box 5-1. European
Commission 2011b, DECC 2012
56
Energy Efficiency Policies in the European Union
Box 5-1 Industry-relevant Provisions in the Energy Efficiency Directive 201227EU
Provisions for industry
Member States must establish an energy efficiency obligation scheme requiring all energy
suppliers or distributors to meet an annual energy-saving target equal to 1.5 of their energy
sales by volume in the previous year. Alternatively, Member States may opt to take other
measures to achieve energy savings amongst final customers as long as they deliver equivalent
energy savings. Such alternative approaches must be approved by the Commission. Article 7
Member States must promote the availability of energy audits and encourage SMEs to undergo
an audit. Article 8
Member States must ensure that large companies undertake an independent audit by 5
December 2015 and every four years thereafter.
These audits may be conducted under existing
energy management systems or voluntary agreements between stakeholder organisations and
Government. Article 8
Energy transformation and CHP
Member States shall produce a National Heating and Cooling Plan to develop the national
potential for co-generation. The Plan must be submitted to the Commission by 31 December
2015 and then updated every five years. Article 14
All new thermal electricity plant above 20 MW should be high efficiency co-generation units and is
sited where waste heat can be used, subject to cost-benefit analysis. When an existing thermal
electricity plant above 20 MW is significantly refurbished or its permit is updated, it must be
converted to allow operation as a high-efficiency co-generation installation provided it is sited
where waste heat can be used. Article 14
Authorisation criteria must be adopted whereby other new or substantially refurbished industrial
installations above 20 MW thermal input capture and make use of their waste heat. Article 14
Member States may lay down exemptions from these requirements on the basis of availability of
heat load or a negative costbenefit analysis, though these conditions for exemption must be
approved by the Commission. Article 14
Member States must draw up and update every 3 years an inventory detailing the energy
performance for all combustion installations and refineries with a total rated thermal input of 50
MW or more. The Commission will use this information to assess the energy efficiency potential
of these installations and, if necessary, may propose requirements to improve their efficiency
when new installations are permitted or re-permitted after periodic review. Article 15
Energy transmission and distribution
Member States must ensure that energy regulators pay due regard to energy efficiency in their
decisions relating to the operation of gas and electricity transmission and distribution
infrastructure. Article 15
By 30 June 2015, Member States must adopt plans which assess the energy efficiency of their
gas, electricity and heating and cooling infrastructure and identify concrete measures and
investments to deliver cost-effective improvements. Article 15
Member States must guarantee transmission and distribution of electricity from high efficiency
CHP, as well as priority access to the grid and priority dispatch for CHP electricity. Article 15
Cross-cutting provisions with industry relevance
Availability of Certification Schemes Member States must ensure that by 31 December 2014
certification and qualification schemes are available for providers of energy services, energy
audits and energy efficiency improvement measures. Article 16
Energy Services Member States must promote the energy service market through making
available lists of providers, model contracts, and disseminating a range of information on
incentives to support energy service projects. Article 17
Member States may set up an Energy Efficiency National Fund. The Commission shall, where
appropriate, directly or via the European financial institutions, assist Member States in setting up
financing facilities and technical support schemes with the aim of increasing energy efficiency in
different sectors. Article 20
57
Energy Efficiency Policies in the European Union
Source European Commission 2012
The proposed measures for industry have already been implemented in varying degree in
the Member States. However, the current overall implementation status is quite long way off
the level of ambition in the EED requiring massive additional effort from the Member States.
Implementation status of energy obligation schemes
Five countries have already got an energy savings obligations scheme, also known as white
certificates. These countries are Belgium Flanders Region, Denmark, France, Italy and the
UK Erreur ! Source du renvoi introuvable.. In UK, only the household sector is targeted. In the other countries, savings can be obtained in industry - although some countries exclude
establishments under the ETS e.g. France and Belgium-Flanders. However, in general the
industry sector is weekly targeted in energy obligation schemes except for industry. Implementation status of energy audits
All countries but Cyprus report in the MURE Database that they run either voluntary or
mandatory energy audit schemes or provide audit subsidies. Nineteen countries state that at
least some of the measures advancing energy audits cover also the SMEs but as many as
ten countries do not promote them for the SMEs. Furthermore, it is not clear how well the
generic audit schemes reach the SME audience, particularly, when in-depth audits are the
only option. Bulgaria, Finland, Germany, Ireland and Sweden have implemented tailored
audit and energy advice programmes for the SMEs. In Finland, the SMEs benefit of 10 per
cent points higher audit subsidies than other companies. A notable number of countries have introduced mandatory energy audits but the
implementation of these schemes varies considerably. Also the certification and qualification
schemes included in the Energy Efficiency Directive relate to the matter. More details on
different approaches and case examples from Bulgaria, Portugal and Romania can be found
in the sector report on industry. Information on certification and qualification schemes for providers of energy services,
energy audits and energy efficiency improvement measures in the MURE Database is
somewhat fragmented making it difficult to form a comprehensive view of the situation. However, some information is available on the appointment of energy managers. In Hungary,
Romania and in the Slovak Republic the appointment of energy managers is mandatory
among large energy users and training and formal certification schemes are in place. Some
other countries, e.g., Greece and Italy, also require the appointment of energy managers but
they do not need a specific certificate. In Finland, undertaking an energy audit is voluntary but those making subsidized energy
audits must pass a qualification scheme. Certification of auditors is also required in other
countries, e.g., in Bulgaria, the Czech Republic and Romania.
Mandatory energy audit schemes may include various different elements beyond the site
examination and reporting the results. The elements identified by WEC 2010 were
Obligation to carry out audits at regular intervals generally companies above certain
threshold of energy consumption
Reporting obligations to governmental organisations and communication of audit
results to the public energy consumption reporting, reporting on saving measures,
reporting on implemented measures
Obligation to propose action plans to implement the energy savings measures
identified in audits
Obligation to carry out certain types of measures
Obligation to appoint an energy manager
Mandatory certification of auditors
58
Energy Efficiency Policies in the European Union
Mandatory comparison to reference values benchmarking
Implementation status of other provisions
Some measures, particularly financial, have already been in place to advance the use of
CHP. While financial support may be justified to open the market for CHP and speed up the
adoption of new technologies, care should be taken to avoid excessive support to inefficient
CHP and market distortions which have occurred in some cases. Another financial
mechanism is third party financing, which has been used to a significant decree in Spain. However, the take-up of cogeneration was generally quite stagnated in the early 2000s when
the CHP Directive 20048EC was issued. The Member States were to implement it by
February 2006. The objective of the Directive was to overcome some barriers which the
European Commission had identified, namely lack of coherent policies in some Member
States, market uncertainties, higher fuel prices for small producers, relatively low prices for
generated electricity, barriers to grid access to sell surplus electricity, and relatively high
start-up costs. The Energy Efficiency Directive, which repeals the CHP directive, addresses
the still existing barriers. According to the MURE Database, there is little evidence that
measures in line with the new provisions would already have been implemented in the
Member States. There are few measures in place to promote the use of waste heat from industrial thermal
generation units. However, the Dutch programme Heat at Full Steam advances the use of
industrial waste heat by subsidising regional heat maps which visualise availability of
industrial waste heat and options for the use of geothermal heat. Energy efficiency measures in transmission and distribution which are addressed by the
Energy Efficiency Directive are not included in the MURE Database. Therefore these
measures are not discussed here. 5.2 Industry measures in the NEEAPs
The MURE database contains 132 NEEAP-measures for industry in the EU Member
States. Also Croatias two and Norways six on-going industrial measures are included in the
analysis.