COMMISSION STAFF WORKING DOCUMENT Country Factsheet Cyprus Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK State of the Energy Union
Date: 2015-11-18
Institutions: European Commission, Secretariat-General
Subjects: Cyprus, competitiveness, economic and social cohesion, electrical energy, energy policy, gas, innovation, reduction of gas emissions, regional cooperation, single market

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 18.11.2015  SWD(2015) 219 final   COMMISSION STAFF WORKING DOCUMENT Country Factsheet Cyprus Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK State of the Energy Union {COM(2015) 572} {SWD(2015) 208 à 209} {SWD(2015) 217 à 218} {SWD(2015) 220 à 243}  
 
 
Towards an Energy Union  
           Cyprus 

Macroeconomic relevance of energy 

IMPORTANCE OF THE ENERGY SECTOR 

The share of the energy sector in in the gross value added has risen faster in Cyprus than in the EU as 
a whole. In 2012, the value added in energy sector was above EU average whereas, in 2014, the value 
added  of  the  energy  sector  declined  to  1.8%  of  the  gross  value  added.    The  energy  sector's 
employment share also rises but remains significantly lower than the (nearly constant) EU average, 
possibly partly reflecting the near absence of renewable energy sub-sectors which are more labour-
intensive.  

Source: EUROSTAT – National Accounts 

According to EurObserv'ER, in 2013, the share 
of  direct  and 
indirect  renewable  energy 
related  employment  in  total  employment  of 
the  economy  in  Cyprus  was  at  about  0.15%, 
below the EU average of 0.53%. 

Source:  European  Commission,  based  on  EurObserv'ER  and 
EUROSTAT

0.00.40.81.21.62.02.420052012CYEU27Value added of energy sector% of grossvalue added (total economy)0.00.10.20.30.40.50.620052012CYEU27Employment in energy sector% of total employment 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Cyprus 

TRADE BALANCE OF ENERGY PRODUCTS 

The almost full dependence on imported oil products translates into one of the largest energy trade 
deficits  in  the  EU  in  GDP  terms.1 The  large  deficit  has  even  increased  a  bit  over  the  period  under 
consideration  and  hence  it  has  continued  contributing  to  a  relatively  large  current  account  deficit. 
This picture is likely to change radically in the medium terms when the energy sector will succeed in 
being sourced from its domestic natural gas supply. 

Source: EUROSTAT 
Note: Current account balance for EU28 from European Commission (AMECO) 

1. Energy Security, solidarity and trust 

ENERGY MIX 

The energy mix of Cyprus differs totally from the one of the EU-28, energy generation in Cyprus being 
almost  exclusively  from  petroleum  and  products.  Compared  to  1995,  the  share  of  petroleum  and 
products has remained at the same high level (95-99% of the energy mix). 

Gross inland energy consumption in 2013  

Source: European Commission, based on EUROSTAT  

1  

The  Eurostat  trade  data  (COMEXT  database)  also  reports  some  gas  imports  in  addition  to  that  of  oil  products.  As 
Cyprus  currently  does  not  import  natural  gas  for  inland  consumption,  the  recorded  gas  trade  refers  to  imports  of 
liquefied propane and butane, minor imports of other petroleum gases and hydrocarbons, liquefied.  

2 

-12-10-8-6-4-202CYEU28% of GDPCoalOilElectricityGasC. A. BalanceTrade balance of energy product and currentaccount balance, 2010-8-6-4-202CYEU28% of GDPCoalOilElectricityGasC. A. BalanceTrade balance of energy product and currentaccount balance, 2014  
 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Cyprus 

IMPORT DEPENDENCY 

Energy  dependency2 remains a key issue in Cyprus, which relies heavily on imported sources (92%) 
for  its  energy  needs.  Consequently,  this  translates  into  a  very  significant  energy  trade  deficit, 
expressed in percentage of GDP. The recent discovery of natural gas in the EEZ of Cyprus is expected 
to significantly change the energy situation of Cyprus; from exclusive energy importer to exporter. In 
the meantime, renewable energy could play a vital role in security of supply and should be promoted 
in line with its high potential. 

Source: European Commission, based on EUROSTAT  

2. A fully-integrated internal energy market 

INTERCONNECTIONS 

The  interconnection  capacity  for  electricity  was  0%  in  2014  for  Cyprus. 
Cyprus  is  an  energy  island  which  is  currently  heavily  dependent  on  oil 
products  for  its  energy  needs.  A  future  subsea  cable  project  called 
"Euroasia  Interconnector"  is  in  the  feasibility  phase  and  was  included  in 
the  first  Project  of  common  interest  (PCIs)  list.  The  project  will  have  a 
capacity of 2,000 MW and interconnect the Cypriot, Israeli and the Greek 
transmission networks. 
Cyprus  is  also  planning  the  development  of  a  domestic  gas  transmission 
infrastructure  to  support  the  introduction  of  natural  gas  in  the  country. 
The first step will be the connection of Vasilikos, Moni and Dhekelia power 
plants. 

Source: European Commission 
based on ENTSO-E scenario 
outlook and adequacy forecast 
2014 
to  2030 
Note:  Reference 
target  is  based  on  October 
2014 
Council 
European 
conclusions  stating  that  "the 
Commission  will  also  report 
regularly  to  the  European 
Council  with  the  objective  of 
arriving  at  a  15%  target  by 
2030" 

2   Note: A dependency rate in excess of 100% indicates that energy products have been stocked. 

3 

Top non-EU gas suppliers in 2013 (% in total imports)CyprusEuropean Union country[%]country[%]Russia39.0Norway29.5Algeria9.7Qatar6.7101%96%102%101%0%0%52%53%82%87%57%65%200520132005201320052013All fuelsPetroleum andproductsNatural gasCYEU28Import dependency 2013 
 
 
 
 
 
 
 
  
 
                                                                 
Towards an Energy Union - Cyprus 

ELECTRICITY AND GAS MARKETS 

Market concentration index for power 
generation (left) and gas (right) in 
2013.(Herfindahl index – 10000 means 
monopoly) 

Sources: European Commission based on ESTAT, 
CEER and Platts Power Vision 

Sources:ESTAT 
Calculations 

and  European  Commission 

The  concentration  of  the  power  generation  market  is  very 
high  in  Cyprus.  Currently,  natural  gas  is  not  supplied  to 
Cyprus.  No wholesale market is currently operating in Cyprus. 
The full liberalisation of the electricity market was legally put 
in  force  on  1st  January  2014,  but  it  has  not  yet  been 
implemented in practice, as EAC, a state owned enterprise, is 
currently  the  sole  supplier  and  virtually  the  sole  producer. 
Consequently,  there  is  no  scope  yet  for  supplier  switching. 
The Cyprus Energy Regulatory Authority (CERA) has published 
on  12  May  2015  a  regulatory  decision  defining  a  new 
electricity  market  model,  with  the  objective  of  introducing 
competition in the electricity market. 

As  regards  the  gas  market,  DEFA,  the  sole  Cypriot  gas 
company, has launched an invitation for an open competition 
for  the  supply  of  gas  to  Cyprus,  in  particular  for  the  main 
power station in Vasilikos. DEFA is currently at the final stage 
of concluding the relevant gas supply agreement. 
According  to  the  10th  Consumer  Markets  Scoreboard3,  the 
electricity services score slightly lower than the EU average in 
terms  of  consumer  satisfaction.  In  2014  electricity  retail 
prices  were  reduced  compared  to  2013,  but  were  still 
recorded  as  second  highest  in  the  EU  for  medium-sized 
industries and 5th highest for households, mainly due to high 
generation and supply costs, but also to VAT. 

As  regards  smart  meters,  Cyprus  carried  out  a  cost-benefit 
assessment  which  turned  out  positive  for  a  wide-scale  roll-
out.  It will  be further  refined with input coming from  a  pilot 
project, involving the installation of 3,000 smart meters. 

CONTRIBUTION OF ENERGY TO CONSUMER PRICE EVOLUTION 

The almost complete dependency on imported oil products also implies a bigger impact of changes in 
the world oil prices on domestic inflation. This is visible from the impact of the oil price peak in 2008 
and the subsequent oil price fall in the following year. 

3  
http://ec.europa.eu/consumers/consumer_evidence/consumer_scoreboards/10_edition/index_en.htm 

10th Consumer Markets Scoreboard (June 2014),   

4 

 
 
 
 
 
 
                                                                 
Towards an Energy Union - Cyprus 

Source:DG ECFIN based on Eurostat 

VULNERABLE CONSUMERS 

Source: European Commission, based on on EUROSTAT SILC 

survey 

Based  on  a  EUROSTAT  survey  on  income  and  living 
conditions,  three  proxy  indicators  are  used  to  assess 
fuel poverty. They indicate that this is a significant issue 
in  Cyprus.  Energy  poverty,  vulnerable  consumers 
categories and measures to protect them were defined 
in  a  Ministerial  Decree.  It  includes  measures  such  as 
reduced  prices  on  electricity  tariffs  and  financial 
incentives  for  participating  in  a  plan  for  installing  a 
photovoltaic  system  at  their  house,  as  well  as  grants 
for  upgrading  the  energy  efficiency  of  their  houses.4 
temporary  measures  of  non-
More 
disconnection  were  also  introduced  by  the  national 
regulatory  authority 5 .  These  measures  were  lifted 
following  the  revised  Ministerial  Decreee,  which 
into  force  on  14  September  2015.  The 
entered 
Ministerial  Decree  widened 
categories  of 
vulnerable  electricity  consumers  and  safeguard  the 
continuous supply of electricity, during critical periods, 
to those vulnerable consumers for which uninterrupted 
power supply is essential for health reasons. 

recently, 

the 

4  
5  

CERA National Report 2013 
CERA  issued  the  22.12.2014  a  provisional  instruction  of  non-disconnection  in  critical  times  for  all  categories  of 
vulnerable  consumers  –  this  was  applicable  till  31.03.2015  and  later  extended  to  also  cover  the  Easter  holidays.  An 
estimated 4,000 households allegedly benefitted from this measure (ref. media reports). 

5 

-2024620052007200920112013% increase on a year earlierNon EnergyEnergyAll itemsCyprus : Price evolution & the contribution of energy prices-2024620052007200920112013% increase on a year earlierNon EnergyEnergyAll itemsEA : Price evolution & the contribution of energy prices 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Cyprus 

3. Energy Efficiency and moderation of energy demand 

ENERGY EFFICIENCY TARGET 2020  
(2.2 Mtoe primary energy and 1.8 Mtoe final energy) 

Cyprus' 2020 energy efficiency target is 2.2 Mtoe expressed in 
primary  energy  consumption  (1.8  Mtoe  expressed  in  final 
energy consumption). Even if Cyprus’ current primary energy 
consumption (2.2 Mtoe in 2013) is in line with its 2020 target, 
additional  efforts  are  needed  to  keep  the  primary  energy 
consumption  at  this  level  or  to  minimise  its  increase  if  the 
GDP  increases  again  during  the  next  five  year  period.  Over 
half of the planned reduction should come from the massive 
switch  from  oil  to  natural  gas  in  electricity  generation  (see 
above).6  

 Source:  European  Commission,  based  on 
EUROSTAT  and  on  national  energy  efficiency 
targets  as  declared  by  the  MS  under  the  Energy 

Efficiency Directive 

ENERGY INTENSITY 

Primary energy intensity in Cyprus has decreased from 2005, at a slightly faster rate than EU average. 
Energy intensity in the industrial sector has increased significantly in 2013, and could be explained by 
sectoral shifts in economic activity. It remains in line with EU average. 

Primary energy intensity of the economy   

Final energy intensity in industry 

Source: European Commission based on  EUROSTAT and European 

Commission/AMECO 

Source: European Commission based on  EUROSTAT and European 
Commission/AMECO 

Electricity demand by end consumers had been steadily decreasing in the period from 2010 to 2013, 
reflecting  the  contraction  in  the  country's  GDP.  The  fuel  consumption  per  vehicle  decreased  from 
0.7748 TOE in 2007 to 0.7080 in 2012 which reflects success of targeted measures (Vehicle Scrapping 
Plan and the Grant Scheme). It is however still higher than EU average. The specific energy intensity 
for freight transport increased between 2005 and 2010 (by 11%), i.e. from the same unit of energy 
fewer tonnes of good are  transported  and/or on shorter distances (or the filling factor of  goods in 
freight vehicles are lower). This is also much higher than EU average, and could be explained by the 
geographical characteristics of Cyprus and by the lack of railways. 

6   Oil burned in steam generators has a lower efficiency, i.e. 35.1%, while gas will be burned in two Combined Cycle Gas 

Turbine (CCGT) power units which have an efficiency of 46.1% and 46.9% respectively. 

6 

 
 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Cyprus 

Final  energy  consumption  per  m2  in  residential 
sector, climate corrected 

Specific energy intensity for passenger cars and freight transport7  

Source: EC, based on Odyssee database 
EU  legislation sets  mandatory  CO2  emission  reduction  targets  for  new  cars  and  vans.  By  2021,  the 
fleet average to be achieved by all new cars is 95 grams of CO2 per kilometre. For new vans, the fleet 
average is set at 147 g/km by 2020. 

Source:  PRIMES  model  background  data  and  estimations  based  on  EU 
Commission and EU MS inputs   

Source: European Environmental Agency. 2014 values are provisional. 2013 EU average refers to EU-27. 

Regarding transport performance, in EU-28 the inland freight modal shares are 71% by road, 17% by 
rail, 7% by inland waterways and 5% by pipelines. The respective inland passenger modal shares are 
82% by private car, 9% by buses and coaches, 7% by railways and 2% by tram and metro.  In Cyprus, 
freight and passenger transport is completely based on road, as there is no rail infrastructure. 

Modal share 

Source:  Eurostat  and  EU  transport  in  figures  2015.  Data  refers  to  2013.  Modal  shares  based  on  tonne-kilometres  for  freight  sector  and 
passenger-kilometres for passenger sector, freight data based on activity within country territory. Estimates are made when data is missing. 

7  

Statistics  on  energy  demand  for  passengers  and  freight  transport  are  not  available  and  model  estimates  have  been 
used instead. These issues should be borne in mind when comparing energy intensity in freight or passenger transport 
between Member States, which should be regarded as merely indicative. 

7 

 
 
 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Cyprus 

4. Decarbonisation of the economy 

NON-ETS GHG EMISSION REDUCTION TARGET 2020  
(-5% by 2020 as compared to 2005 in the non-ETS sector) 

Cyprus'  emissions  in  2014  are  31%  below 
the  2014  ESD  target  (approximated  data). 
According  to  the  latest  projections,  Cyprus 
will  overachieve 
its  greenhouse  gas 
emission  reduction  target  for  2020  by  a 
wide margin of 49% compared to 2005.  

Source:  European  Commission    based  on  EEA.  Based  on  preliminary 
inventory data. 

ESD (Effort Sharing Decision) emissions are the emissions from sectors not 

covered by the EU ETS.  

Emissions 

Non-ETS 
(vs. 2005) 
Projections with 
existing measures 
2020 

Projections/pr
oxy* 

target 

2.8 MT CO2 eq.  

Proxy 2014 

4 MT CO2 eq. 

5.5  MT  CO2 
eq. 

5.9  MT  CO2 
eq. 

* Due to significant developments, particularly in the area of 
energy which are expected to be launched soon, there will be 
a revised submission of Cyprus GHG emissions projection. 

RENEWABLE ENERGY SHARE TARGET 2020 (13%) 

With  a  renewable  energy  share  of  8.1%  in 
2013,  Cyprus  is  on  track  to  reach  its  13% 
target in 2020. 

Source: European Commission based on  EUROSTAT 

GREENHOUSE GAS EMISSION INDICATORS 

In  2014  the  revenues  from  the  auctioning  of  ETS  allowances  of  Cyprus  amounted  to  EUR  0.7  million,  out  of 
which 55% are used or planned to be used for energy and climate-related purposes.      

Largest Sectors of GHG 
Emissions in 2012 (*) 

Energy/power industry  

Transport 

Industry  

Agriculture (incl. forestry & 
fishery) 

Residential & Commercial 

Waste & others 

Cyprus 

EU 
Average 

38% 

22% 

14% 

10% 

5% 

11% 

33% 

20% 

19% 

12% 

13% 

3% 

GHG Emissions 

Cyprus 

EU 

EU ETS auctioning revenues 
in 2014(EUR millions) 

Share of ETS emissions in 
2013 

GHG emissions/capita in 
2013 (tCO2equivalent) 
Carbon intensity of 
economy in 2013 
(tCO2equivalent/EUR 
millions) 

0.7 

3205 

49% 

42% 

9.6 

8.5 

471 

328 

8 

 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Cyprus 

Source: European Commission  based on EEA 

(*)Sectoral breakdown for 2013 data not available 

ENERGY & TRANSPORT TAXATION 

Over the period Cyprus' GDP share of energy and transport taxes has fallen, but remains above the stable EU 
average. This decline is almost fully due to the marked fall in transport vehicle tax revenues. The GDP share of 
fuel taxes exceeds the EU average, but it has hardly changed over the period. 

Source: Eurostat 

5. Research, innovation and competitiveness 

RESEARCH AND INNOVATION 

Cyprus shows very low levels in terms of public support share allocated to research and innovation in 
the field of energy and environment. Consequently, in terms of intensity of low-carbon technologies 
patents, Cyprus is much behind the EU average and main worldwide partners.  

Source: European Commission based on  EUROSTAT   

9 

0.01.02.03.04.0CYEU-28Energy & Transport related taxes % of GDP, 2005TransportvehiclesTransport fuelHeat &Electricity0.01.02.03.04.0CYEU-28Energy & Transport related taxes % of GDP, 2012TransportvehiclesTransport fuelHeat &Electricity 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Cyprus 

COMPETITIVENESS 

Real unit energy costs (% of value added) 

The  real  unit  energy  costs 8  in  Cyprus  have 
increased  from  its  2000  level,  also  vis-à-vis  the 
EU average and the US.  However, a lack of data 
does not allow interpreting this trend in detail.  
Due  to  its  peculiar  energy  mix,  energy  prices  in 
Cyprus are dependent of oil product prices. This 
can  partly  explain  why  Cyprus  has  the  highest 
electricity  prices  paid  by  industrial  users  in  the 
EU,  as  well  as  higher  prices  than  international 
competitors.  

Source: European Commission 

Source: EUROPEAN COMMISSION based on EUROSTAT and IEA 

6. Post-2020 Energy and Climate policy Strategy  

COMPREHENSIVE MEDIUM TO LONG-TERM STRATEGY (post-2020) 
FOR CLIMATE AND ENERGY  

  Cyprus  has  not  yet  finalized  a  comprehensive  post-2020  climate  and  energy  strategy  for  the 

medium and long run.  

  An  ad-hoc  committee  has  been  set  up  for  the  detailed  revision  of  the  policies  and  measures 
already  in  place,  to  streamline  these  into  a  more  detailed  strategy  for  the  reduction  of 
greenhouse gas emissions  relative to  the 2030 and 2050 time horizon. Several  policies  that are 
currently in place (e.g. energy efficiency and promotion of  renewable energies) will continue to 
contribute with reductions in 2030. 

  A national strategy for renewable energy and energy efficiency for 2030 is being developed with 
technical assistance. Cyprus is currently estimating the impact of the implemented and planned 
measures up to 2030, as well as the level of national target for energy efficiency for 2030.  With 
the  technical  assistance  from  IRENA  and  JRC,  Cyprus  is  currently  preparing  the  national 
renewable energy roadmap aiming to determine the optimum penetration of renewable energy 
for  electricity  supply  until  2030.  Recently,  technical  assistance  was  extended  to  cover  the 
expansion of the roadmap up to 2040 and to include in the calculations not only electricity but 

8 This indicator measures the amount of money spent on energy sources needed to obtain one unit of value added. 

10 

10.69.58.217.013.28.817.013.78.0024681012141618CYEU27US200020092011 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Cyprus 

also the heating, cooling and transport sectors.  

  Cyprus  is  preparing  a  comprehensive  post-2020  climate  and  energy  strategy  for  the  post  2020 
period:  “The  Low  Carbon  Development  Strategy  of  Cyprus”.    The  strategy  sets  five  principal 
objectives  with  respect  to  climate  change  which  are:  a)  fulfilment  of  Cyprus  international  and 
European obligations according to the  UNFCCC, the Kyoto Protocol and  the legal framework of 
the  EU,  b)  reduction  of  greenhouse  gas  emissions  with  emphasis  on  reducing  the  use  of  fossil 
fuels,  c)  increase  of  carbon  sequestration  from  the  atmosphere,  d)  foster  research  and 
innovation in fields related to climate change affairs, and e) invest in raising public awareness for 
reducing emissions.   

  Cyprus  will finalize  the  post  2020  low  carbon  strategy  in an integrated  manner,  as  soon as  the 
final  national  contribution  (emission  reductions)  will  be  decided  in  the  new  Effort  Sharing 
Decision (ESD) based on the relevant Council conclusions.  

  The  electricity  sector  has  a  crucial  role  to  play  in  the  long-term  decarbonization  of  the  Cyprus 
economy  as  it  makes  up  a  significant  share  of  Cyprus  emissions.  Apart  from  reducing  GHG 
emissions, the integrated low carbon strategy will be structured appropriately in order to bring 
further benefits such as less pollution, green jobs and reduced dependence on energy imports. 

NATIONAL TARGETS, especially for 2030 

Objective, 2030-2050 

GHG reduction  

Targets 
No 

Renewable energy share 

No 

Comments 
For  the  post  2020  period  the  target  has  not  been 
decided yet. 
the 
Cyprus  has  prepared  a  roadmap  regarding 
penetration of renewables in the electricity production 
by  2025.  Based  on  these  calculations,  the  national 
target  for  the  penetration  of  renewable  energy  to  the 
electricity grid could reach 21% by 2025. This roadmap 
is now under revision. 

Energy Efficiency / savings 

No 

7. Regional cooperation 

Cyprus electric system is not interconnected with any other MS or third country and there is no gas 
system.  This  leaves  scope  for  regional  cooperation.  To  that  effect,  Cyprus  promotes  initiatives  for 
regional  cooperation  with  EU  and/or  non-EU  countries.  There  are  already  two  projects  (East  Med 
pipeline,  and  the  EuroAsia  Interconnector)  which  have  qualified  as  Projects  of  common  interest 
(PCIs) on the basis inter alia of their cross-boundary effect.  

In  the  hydrocarbons  sector,  Cyprus  concluded  Delimitation  Agreements  with  Egypt  in  2003,  with 
Lebanon in 2007, and with Israel in 2010. A Framework Agreement concerning the joint development 
of  potentially  common  hydrocarbon  reservoirs  was  signed  with  Egypt  in  2013,  and  similar 
agreements are under negotiation with Lebanon and Israel.  

In  addition,  Cyprus  is  actively  pursuing  wider  (trilateral)  regional  cooperation  in  the  energy  sector. 
The Memorandum of Understanding between Cyprus-Greece-Israel in August 2013 and the Cyprus-
Greece-Egypt Declaration adopted in November 2014 are sound examples.  

Furthermore,  Cyprus  is  promoting  regional  cooperation  initiatives  to  interconnect  natural  gas 
infrastructures  in  the  region.  In  relation  to  the  Aphrodite  gas  discovery  in  the  Cyprus  EEZ,  the 
regional pipeline option from Cyprus to Egypt seems to be commercially the most viable option. This 
will  consist  of  a  Floating  Production,  Storage  &  Offloading  standalone  unit  at  the  Aphrodite  Field 

11 

 
 
 
 
 
  
 
 
 
 
Towards an Energy Union - Cyprus 

connected with a gas export pipeline directed to Egypt and a parallel gas pipeline supplying natural 
gas to the Cyprus domestic market.  

8. Cohesion policy contribution 

The  EU  Cohesion  policy  provides  important  investment  possibilities  to  implement  energy  policy 
objectives in Cyprus which will be complemented by national public and private co-financing, aiming 
at  optimal  leverage.  It  also  ensures  integrated  territorial  solutions  to  challenges  by  supporting 
capacity building, technical assistance and territorial cooperation. 

Energy  Efficiency:  Over  2014-2020,  EU  Cohesion  Policy  will  invest  some  EUR  45  million  in  energy 
efficiency improvements in public and residential buildings and in SMEs, as well as in high-efficiency 
cogeneration and district heating in Cyprus. These investments are expected to contribute to around 
3 500 households with improved energy consumption classification and a decrease of around 3 000 
000 kWh per year of decreased primary energy consumption of public buildings. A further estimated 
EUR 82.25 million will be invested in the transport sector, of which EUR 55.5 million will be used to 
support the move towards an energy-efficient, decarbonised transport sector.  

Decarbonisation: Overall, the EU Cohesion Policy investments in Cyprus over 2014-2020 are expected 
to contribute to an estimated annual decrease of GHG of around 3 104 000 tonnes of CO2eq. No EU 
Cohesion Policy investments in renewable energy infrastructure envisaged in Cyprus over 2014-2020; 
research and innovation in the area of renewable energy might be supported. 

Research,  Innovation  and  Competitiveness:  Over  2014-2020,  EU  Cohesion  Policy  will  invest 
significantly in R&I and in SME competitiveness in Cyprus. This will be based on the national strategy 
for  smart  specialisation.  For  Cyprus,  the  Strategy9 includes  a  focus  on  sustainable  energy.  At  this 
stage,  the  allocations  foreseen  for  investments  in  R&I  and  adoption  of  low-carbon  technologies  in 
Cyprus are not specified, but should become available in line with the evolving content of the smart 
specialisation strategy.  

9  

"Smart Specialisation Strategy for Cyprus S3CY", adopted by the CY Government on 26 March 2015. 

12