EU Commissioner for Climate Action Connie Hedegaard has identified energy efficiency as a crucial tool in the EU’s battle to reduce carbon emissions but it is often overlooked by the EU member states, who are currently on track to only meet half of the 20 percent energy efficiency target by 2020. Biwa Kwan investigates why.

Energy saving light bulbs. Better insulation for houses through the use of double glazed windows. Fixing leaky energy ducts.

Not to be confused with carbon emissions, the idea of energy efficiency measures is to encourage consumers to use less energy by making smarter, more aware choices.

It is an area which has plenty of untapped potential to mitigate against climate change simply because it is cheaper and quicker to cut back on energy you already consume, said Vera Hoefele from the German think tank, Wuppertal Institute for Climate, Environment and Energy.

“If you have to change your production process to reduce emissions you will only have costs, but if you improve your energy efficiency you will also save energy costs. Therefore most energy efficiency measures pay back rather quickly or at least during the lifetime of the product or building – you will save more than you had to invest originally,” she said.

EU member states performance below par

The European Commission has calculated the possible cost savings of energy efficiency to be 100,000 euros per household annually. Yet politicians of the EU member states are failing to achieve the EU’s 2020 energy efficiency targets, despite political statements of support for the approach.

Commissioners revealed in a high level ministerial meeting in February that based on current rates, the EU member states would achieve between 9 and 11 percent improvement in energy efficiency by 2020, only half of the 20 percent target.

“I think it has always been seen as the kind of the Cinderella, if you like, of the climate objectives. Everyone says how important energy savings is but then it’s always seen to be the last to get any attention. It is certainly the last [climate change policy area] to receive resources and funding,” said Catherine Pearce, senior policy officer for the umbrella NGO group, European Environmental Bureau (EEB).

“Many people regard it as a very difficult policy area, in terms of the number of people and stakeholders you’re trying to reach – it’s across the whole supply chain…and in terms of what ministers and what big heads of government like, they like big projects that you can see.”

The winds of change?

At the formal presentation of the European Commission’s “Energy Efficiency Plan for 2011” and the “Low Carbon Roadmap to 2050” earlier this month, Hedegaard renewed the call for member states to ramp up efforts to achieve their energy efficiency targets, saying such action would enable a further 5 percent cut in carbon emissions by 2020.

“If we deliver on our energy efficiency targets that would, alone, bring us to the 25 percent [to make the transition to a low carbon economy cost efficient],” said Hedegaard.

But the proposed measures to require 3 percent of all public buildings to be refurbished each year and have better energy labels on products were criticized by NGOs for the lack of measures to ensure the enforcement of the plan among the member states.

Energy efficiency targets are the only part of the EU’s “20-20-20” climate change policy package that is not binding.

“The impact assessment that supports the plan, says itself, that there is no guarantee that any of the measures will meet the 20 percent energy savings target. It says that the few measures that are proposed are left to the individual ambition of the member states,” said EEB’s Pearce, adding that binding targets were needed to ensure member states followed through on their stated intentions.

Energy Commissioner Oettinger has said member states will have until 2013 to improve their energy efficiency through voluntary actions, when a review will take place to determine if binding targets are needed.

To date individual member states have been against mandates from the EU on energy efficiency.

Burden on member states

Without binding targets, enforcement of the individual member states’ National Energy Action Plan (NEAP) has been problematic.

The stated energy efficiency goal within the 2007 energy efficiency action plan for the newer EU member state of Poland, is a reduction in the Polish economy’s energy intensity to EU 15 level.

Wojciech Stępniewski, head of climate policy at World Wildlife Foundation Poland, has carried out an analysis of the Polish government’s energy efficiency action plan to conclude that little has been achieved in recent years.

“Poland is not on track with its action plan, basically the majority of the actions are not done, the majority of the measures proposed are not undertaken,” he said.

In the coal-intensive economy of Poland, where about 90 percent of its energy is derived from the fuel source, politicians remain unconvinced of the cost savings benefits of energy efficiency projects.

“In the view of the finance minister, energy efficiency is not a measure to save money for the budget. He thinks of it only as a cost and not as a form of income in the future,” said Stępniewski.

He said only 2 percent of available funding from the EU’s structural and cohesion policy goes into energy efficiency projects in Poland, with the majority of investment being funnelled into large infrastructure projects.

“I think that it is essential that the [energy efficiency] target is binding because if the target is indicative it doesn’t give any obligation to anybody to fulfil this, so it should be binding.”

Denmark recently ranked in the top three European countries, with the UK and Ireland, who used the least amount of energy per unit of GDP in the eight years until 2008, according to a Commission report released earlier this month.

But even considering its track record on the energy efficiency front, the voluntary national targets on energy efficiency of 9 percent reduction by 2016 do not inspire confidence, said senior scientist Kenneth Karlsson from the DTU Climate Centre at the Technical University of Denmark, who has done future projections on Denmark’s energy-use for the Danish Climate Commission.

“With what has been started with Denmark’s energy strategy, I don’t see how they can manage to reach the 20 percent target of energy savings. My guess is around 15 percent or so in 2020, depending on whether they put up new measures after the presentation of the government’s new energy strategy [released last month].”

Although Karlsson conceded Denmark is “one of the most efficient countries when it comes to energy “, he identified electricity use in households and industry, and incentives for energy efficient household appliances as areas in need of improvement.

EU compliance measures

Climate Action Commissioner Connie Hedegaard said a voluntary approach from member states until 2013 would enable the EU to use more of an incentives-based approach to encourage the compliance of member states.

“There are many tools that the Commission has – and of course through the budget, it could be a possibility to say: why don’t we give a higher priority through the EU budget to energy efficiency, so that you make carrots instead of always sticks,” she said.

But NGOs and experts said there was little evidence of strong compliance measures within the Commission’s updated Energy Efficiency Plan.

“We have a lot of good approaches, good ambitions, but the implementation is a problem here, and this is something that is not mentioned in the new energy efficiency plan – that it is important to improve the compliance and implementation of the existing legislation,” said Wuppertal Institute’s Hoefele.

“For example, with the energy performance of buildings directive. It really is a good directive for what its goal is and what is written down there, but the problem is, the directive is not implemented correctly at a member state level. There are also many delays [with the energy performance of buildings directive] and with the eco-design directive.”

As the NEAP deadline approaches in June and the European Commission releases its white paper on transport later this month, the EU’s energy efficiency policy is likely to come under increased scrutiny.

Meanwhile, international developments such as the oil crisis, puts even greater pressure on the European Union to examine its energy efficiency policy.

“I believe that in the time we are now in, where the oil prices are increasing as much as they are, I think the whole attention towards energy efficiency will be much bigger in the months and years to come than in the years we have been in since the crisis hit,” said Hedegaard.