What the EU "Winter Package" means for industry

Energy Efficiency

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19 December 2016

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Rod Janssen

Recognising industry’s contribution to clean energy

The European Commission has published its proposals for the contribution of clean energy in meeting the EU’s obligations for the Paris climate agreement.

Published on 30 November, the “winter package” is appropriately entitled “Clean Energy for All Europeans”. The Communication proposes a binding target for energy saving for 2030 and it includes recommendations to adapt the Energy Efficiency Directive, the Energy Performance of Buildings Directive, and other existing guidance.

The Communication states the three main goals as:

  1. Putting energy efficiency first
  2. Achieving global leadership in renewable energies
  3. Providing a fair deal for consumers.

The proposals put a welcome focus on energy demand, calling for all consumers to be involved – whether they are consumers of energy-related technologies or of energy. Whether the proposals are sufficient to significantly contribute to the EU meeting its Paris climate obligations is up to debate.

But there are clear, and somewhat puzzling, proposals for industry too.

The Communication includes an impact assessment for industry using policy scenarios to calculate that the proposals could achieve reductions in industry by 2030 ranging from 0.5% to 12%. But the savings are mainly driven by the EU Emissions Trading System and the impact of Ecodesign on the performance of industrial motors. In the more ambitious scenarios, there are also savings from horizontal measures and the application of best available technologies. The forecast improvements in energy intensity in industry are a minimal compared to the residential or services sectors.

This seems a rather partial assessment of the potential for energy savings in industry. The 2012 Energy Efficiency Directive emphasised mandatory audits for large industry, the promotion of energy efficiency in SMEs, and the promotion of energy management systems. Yet the recent Communication makes no mention of how those mandatory industry audits that have been completed can be used to undertake and track reductions in energy use and increases in energy efficiency.

The package makes no mention of the potential for using those audits to establish a database of potential savings. It does not discuss whether the Commission will help finance specific recommendations that flow from the audits. What will the Commission do to further support energy management systems such as ISO 50001? Such systems are crucial to change the culture within businesses as well as achieving real efficiency.

The Communication includes many proposals for facilitating actions related to industry, including initiatives to accelerate clean energy innovation, fostering competition, maximising Europe’s leadership in clean energy technologies and services to help third countries. Further, the Communication mentions spurring investment and technological leadership that will create new employment opportunities and enhance citizen welfare.

Degree of the Commission’s commitment to realising the potential of industrial energy efficiency

Yet the Communication itself casts some doubt on the degree of the Commission’s commitment to realising the potential of industrial energy efficiency. While the Communication says that EU industry must be at the forefront of the clean energy transition, it adds that the “Commission will support industry-led initiatives to promote EU global leadership in clean energy and low-carbon technological solutions.”

It does not seem highly ambitious for the Commission to wait for industry to lead, and to assign itself the reactive role of simply providing support. The more so, when in a discussion of energy intensive industries, the Communication urges further energy efficiency improvements and notes that “Such investments generally pay off in terms of reduced energy costs.” Really? Has the Commission not moved beyond the need to mention that energy efficiency is good for the bottom line.

The publication of the Communication is the starting gun on negotiations to set a long-term policy framework for 2030. Policymakers, industry associations, environmental groups, consumer groups and others will now be dissecting it and suggesting changes, endorsing certain parts and helping to ensure that Europe does, indeed, set a framework for clean energy to contribute significantly to the Paris climate obligations.

So now is the chance to correct the weaknesses, through critical consultation.

About the Author

Rod Janssen is the President of Energy Efficiency in Industrial Processes (EEIP).