The European Parliament adopted by 471 votes to 147, with 17 abstentions, a legislative resolution on the proposal for a Directive of the European Parliament and of the Council on energy efficiency (recast).

The European Parliament's position adopted at first reading under the ordinary legislative procedure amends the Commission's proposal as follows:

Subject matter and scope

This Directive establishes a common framework of measures to promote energy efficiency within the Union in order to ensure that the Union's targets on energy efficiency are met and enables further energy efficiency improvements. The aim of that common framework is to contribute to the implementation of Regulation (EU) 2021/1119 of the European Parliament and of the Council and to the Union’s security of energy supply by reducing its dependence on energy imports, including fossil fuels.

Energy efficiency first principle

In accordance with the energy efficiency first principle, Member States should ensure that energy efficiency solutions, including demand-side resources and system flexibilities, are assessed in planning, policy and major investment decisions of a value of more than EUR 100 million each or EUR 175 million for transport infrastructure projects, relating to the following sectors:

- energy systems; and

- non-energy sectors, where those sectors have an impact on energy consumption and energy efficiency such as buildings, transport, water, information and communications technology (ICT), agriculture and financial sectors.

In applying the energy efficiency first principle, Member States should:

- ensure the application of, and make publicly available, cost-benefit methodologies that allow proper assessment of the wider benefits of energy efficiency solutions where appropriate, taking into account the entire life cycle and long-term perspective, system and cost efficiency, security of supply and quantification from the societal, health, economic and climate neutrality perspectives, sustainability and circular economy principles in transition to climate neutrality;

- address the impact on energy poverty;

- identify an entity or entities responsible for monitoring the application of the energy efficiency first principle.

Energy efficiency targets

Member States should collectively ensure a reduction of energy consumption of at least 11.7 % in 2030 compared to the projections of the 2020 EU Reference Scenario so that the Union’s final energy consumption amounts to no more than 763 Mtoe. Member States should make efforts to collectively contribute to the indicative Union primary energy consumption target amounting to no more than 992.5 Mtoe in 2030.

Each Member State should set an indicative national energy efficiency contribution based on final energy consumption to meet, collectively, the Union’s binding final energy consumption target and should make efforts to contribute collectively to the Union’s indicative primary energy consumption target.

The Commission should assess that the collective contribution of Member States is at least equal to the Union’s binding target for final energy consumption.

Exemplary role of the public sector

Member States should ensure that the total final energy consumption of all public bodies combined is reduced by at least 1.9% each year , compared with 2021. This obligation does not cover, until 31 December 2026, the energy consumption of public bodies in local administrative units with fewer than 50 000 inhabitants and, until 31 December 2029, the energy consumption of public bodies in local administrative units with fewer than 5 000 inhabitants.

Each Member State should ensure that at least 3% of the total floor area of heated and/or cooled buildings that are owned by public bodies is renovated each year to be transformed into at least nearly zero-energy buildings or zero-emission buildings. Member States may choose which buildings to include in the 3% renovation requirement, giving due consideration to cost-effectiveness and technical feasibility in the choice of buildings to renovate. They may exempt social housing from the obligation to renovate.

Less stringent requirements may apply to: (i) buildings officially protected as part of a designated environment, or because of their special architectural or historical merit, in so far as compliance with certain minimum energy performance requirements would alter their character or appearance unacceptably; (ii) buildings owned by the armed forces or central government and serving national defence purposes, apart from single living quarters or office buildings for the armed forces and other staff employed by national defence authorities; (iii) buildings used as places of worship and for religious activities.

Energy savings obligations

Member States should achieve cumulative end-use energy savings for the entire obligation period up to 2030, equivalent to new annual savings of at least 0.8% of final energy consumption up to 31 December 2023 and of at least 1.3% from 1 January 2024, 1.5% from 1 January 2026 and 1.9% from 1 January 2028.

Data centres

In 2018 the energy consumption of data centres in the Union was 76.8 TWh. This is expected to rise to 98.5 TWh by 2030, a 28 % increase. Under the amended text, the reporting obligation should apply to data centres with an installed IT power demand of at least 500 kW. The reporting obligation should be understood as referring to the spaces and equipment that serve primarily or exclusively for data-related functions (server rooms), including the necessary associated equipment, for example, associated cooling, lighting, battery arrays, or uninterruptible power supplies.

Consumer information and awareness

Member States should set up dedicated one-stop shops for technical, administrative and financial advice on energy efficiency. These structures should: (i) advise households, SMEs, micro-enterprises and public bodies by providing streamlined information on technical and financial options and solutions; (ii) offer holistic support to all households, paying particular attention to households affected by fuel poverty and the least efficient buildings; (iii) provide advice on energy consumption behaviour.

Heating and cooling planning

The directive also establishes new requirements for efficient district heating systems. Member States should ensure that regional and local authorities prepare local heating and cooling plans at least in municipalities with a total population of more than 45 000 . These plans should provide an estimate and mapping of the potential for increased energy efficiency, including preparation for low-temperature district heating, high-efficiency cogeneration, recovery of waste heat, and renewable energies for heat and cooling in the area in question.

The European Parliament adopted by 469 votes to 93, with 82 abstentions, amendments to the proposal for a Directive of the European Parliament and of the Council on energy efficiency (recast).

The matter was referred back to the committee responsible for inter-institutional negotiations.

The main amendments adopted in plenary are as follows

Aims

This Directive establishes a common framework of measures to promote energy efficiency within the Union in order to ensure that the binding Union's target on energy efficiency is met and enables further energy efficiency improvements, contributing to the implementation of the Paris Agreement and to the Union’s security of energy supply through reducing its dependence on energy imports, including fossil fuels. The Directive also provides for the establishment of binding national energy efficiency contributions for 2030.

Increasing energy efficiency targets

Member States should collectively ensure a reduction of energy consumption of at least 40 % in 2030 in final energy consumption and 42.5 % in primary energy consumption compared to the projections of the 2007 reference scenario so that the Union’s final energy consumption amounts to no more than 740 Mtoe and the Union’s primary energy consumption amounts to no more than 960 Mtoe in 2030. Member State should set binding national energy efficiency contributions for final and primary energy consumption to meet, collectively, the binding Union targets. They should notify those contributions together with a trajectory with two reference points (milestones) in 2025 and 2027 for those contributions.

The Commission should assess whether the collective contribution of Member States is sufficient to achieve the Union's energy efficiency target. If it concludes that it is not sufficient, it would propose to each Member State an adjusted national contribution that would allow the collective contribution of Member States to reach the Union target.

Energy efficiency first principle

In line with the energy efficiency first principle, energy efficiency solutions should be assessed in the design and planning of policy decisions as well as major investment decisions, including for non-energy sectors, where they have an impact on energy use and efficiency, such as the building, transport, water, ICT and agriculture sectors as well as the financial sector

When applying the energy efficiency first principle, Member States should:

- define a cost-benefit analysis methodology that assesses the wider benefits of energy efficiency solutions taking into account the entire life cycle and foreseeable developments, system and cost efficiency, security of supply and quantification from the societal, health, economic and climate neutrality perspective;

- ensure that the application of the energy efficiency first principle will have a positive impact on addressing energy poverty ;

- secure that the investments made are environmentally sustainable at all stages of the energy value chain and apply circularity principles in transition to climate neutrality.

Public sector leading on energy efficiency

The total final energy consumption of all public bodies combined should be reduced by at least 2% each year, compared to the year of entry into force of the Directive. Member States should:

- provide financial and technical support to public bodies in the uptake of energy efficiency improvement measures and encourage them to take into account the wider benefits beyond energy savings, such as the quality of the indoor air and environment as well as an improvement of people’s quality of life and the comfort of renovated public buildings, in particular schools, day care centres, nursing homes, sheltered housing, hospitals, and social housing;

- encourage public bodies to take adequate measures to address the heating dimension of buildings owned or occupied by public bodies;

- promote the use of public transport and other less polluting and more energy efficient means of mobility, such as rail, cycling, walking or shared mobility.

Each Member State should ensure that at least 3% of the total floor area of heated and/or cooled privately owned buildings providing social infrastructure is deeply renovated each year. Social housing could be exempted from the renovation obligation where such renovations would not be cost neutral.

Where public bodies occupy a building they do not own, they should encourage the owner of the building to implement an energy management system or energy performance contract to maintain and improve energy performance over time.

Empower and protect vulnerable customers and reduce energy poverty

Member States should, inter alia :

- develop a robust long-term strategy and take appropriate measures to empower and protect people affected by energy poverty, vulnerable customers and low-income households and, where applicable, people living in social housing;

- put in place proper monitoring and evaluation instruments to ensure that people affected by energy poverty are supported by energy efficiency improvement measures;

- ensure that measures to promote or facilitate energy efficiency, in particular those concerning buildings and mobility, do not lead to a disproportionate increase in the cost of these services or to greater social exclusion;

- take appropriate measures to protect people affected by energy poverty against unfair price setting and price increases in the supply of heating, cooling and domestic hot water.

Energy management systems and energy audits

Enterprises should implement an energy management system where their average annual energy consumption over the previous three years, taking into account all energy carriers, has been: (a) higher than 100 TJ , from 1 January 2024; (b) higher than 70 TJ , from 1 January 2027.

Enterprises that do not implement an energy management system should be subject to an energy audit where their average annual energy consumption over the previous three years, taking into account all energy carriers, has been: (a) higher than 10 TJ, from 1 January 2024; (b) higher than 6 TJ, from 1 January 2027.

Data centres

To promote sustainability in the ICT sector, in particular data centres, Member States should collect and publish relevant data for the energy performance, water footprint and demand-side flexibility of data centres, based on a common EU template. Member States should only collect and publish data on data centres that have an installed IT power demand of at least 100 kW .

Information and awareness raising

Member States should engage with relevant authorities and private stakeholders for the purpose of developing dedicated local, regional or national one-stop shops for energy efficiency. Those one-stop shops should lead to locally developed projects by advising and providing streamlined information on technical and financial possibilities and solutions to households, SMEs, microenterprises, public bodies; advising on energy consumption behaviour with the aim of actively engaging the consumers; by developing services for energy poor, vulnerable consumers and low-income households.

The Committee on Industry, Research and Energy adopted the report by Niels FUGLSANG (S&D, DK) on the proposal for a directive of the European Parliament and of the Council on energy efficiency (recast).

The committee recommended that the European Parliament's position adopted at first reading under the ordinary legislative procedure should amend the proposal as follows:

Aims

This Directive establishes a common framework of measures to promote energy efficiency within the Union in order to ensure that the binding Union's target on energy efficiency is met and enables further energy efficiency improvements, contributing to the implementation of the Paris Agreement and to the Union’s security of energy supply through reducing its dependence on energy imports, including fossil fuels. The Directive also provides for the establishment of binding national energy efficiency contributions for 2030.

Energy efficiency first principle

Energy efficiency solutions should be assessed in the design and planning of policy decisions as well as major investment decisions concerning the following sectors: (a) energy systems; and (b) non-energy sectors, where they have an impact on energy consumption and energy efficiency, including the building, transport, water, information and communication technology (ICT) and agriculture sectors as well as the financial sector.

When applying the principle of primacy of energy efficiency, Member States should:

- define a cost-benefit analysis methodology that assesses the wider benefits of energy efficiency solutions;

- ensure that the application of the energy efficiency first principle will have a positive impact on addressing energy poverty ;

- secure that the investments made are environmentally sustainable at all stages of the energy value chain and apply circularity principles in transition to climate neutrality.

Energy efficiency targets

Member States should collectively ensure a reduction of energy consumption of at least 40 % in 2030 in final energy consumption and 42.5 % in primary energy consumption compared to the projections of the 2007 Reference Scenario so that the Union’s final energy consumption amounts to no more than 740 Mtoe and the Union’s primary energy consumption amounts to no more than 960 Mtoe in 2030. Member States should set binding national energy efficiency contributions for final and primary energy consumption to meet, collectively, the binding Union target. They should notify those contributions together with a trajectory with two reference points (milestones) in 2025 and 2027 for those contributions.

Public sector leading on energy efficiency

The total final energy consumption of all public bodies combined should be reduced by at least 2% each year, compared to the year of entry into force of the Directive. Member States should:

- provide financial and technical support to public bodies in the uptake of energy efficiency improvement measures and encourage them to take into account the wider benefits beyond energy savings, such as the quality of the indoor air and environment as well as an improvement of people’s quality of life and the comfort of renovated public buildings, in particular schools, day care centres, nursing homes, sheltered housing, hospitals, and social housing;

- encourage public bodies to take adequate measures to address the heating dimension of buildings owned or occupied by public bodies;

- promote the use of public transport and other less polluting and more energy efficient means of mobility, such as rail, cycling, walking or shared mobility.

Each Member State should ensure that at least 3% of the total floor area of heated and/or cooled privately owned buildings providing social infrastructure is deeply renovated each year.

Where public bodies occupy a building they do not own, they should encourage the owner of the building to implement an energy management system or energy performance contract to maintain and improve energy performance over time.

Energy poverty

Member States should, inter alia :

- implement energy efficiency obligation mechanisms , alternative public policy measures, or programmes or measures financed under an Energy Efficiency National Fund, as a priority for people in fuel poverty, low-income households, vulnerable customers and, where appropriate, people living in social housing;

- define and achieve a minimum share of the required volume of cumulative end-use energy savings among those in fuel poverty. This share should be at least equal to the proportion of households in fuel poverty as assessed in their national energy and climate plan;

- require obliged parties to cooperate with regional and local authorities and to involve social services and civil society organisations in order to establish a participatory platform dedicated to the alleviation of energy poverty.

Energy management systems and energy audits

Enterprises should implement an energy management system where their average annual energy consumption over the previous three years, taking into account all energy carriers, has been: (a) higher than 100 TJ , from 1 January 2024; (b) higher than 70 TJ , from 1 January 2027.

Enterprises that do not implement an energy management system should be subject to an energy audit where their average annual energy consumption over the previous three years, taking into account all energy carriers, has been: (a) higher than 10 TJ, from 1 January 2024; (b) higher than 6 TJ, from 1 January 2027.

Data centres

To promote sustainability in the ICT sector, in particular data centres, Member States should collect and publish relevant data for the energy performance, water footprint and demand-side flexibility of data centres, based on a common EU template. Member States should only collect and publish data on data centres that have an installed IT power demand of at least 100 kW .

Information and awareness raising

Member States should engage with relevant authorities and private stakeholders for the purpose of developing dedicated local, regional or national one-stop shops for energy efficiency. Those one-stop shops should lead to locally developed projects by advising and providing streamlined information on technical and financial possibilities and solutions to households, SMEs, microenterprises, public bodies; advising on energy consumption behaviour with the aim of actively engaging the consumers; by developing services for energy poor, vulnerable consumers and low-income households.

PURPOSE: to recast the energy efficiency Directive in order to set a more ambitious binding annual target for reducing energy use at EU level.

PROPOSED ACT: Directive of the European Parliament and of the Council.

ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council.

BACKGROUND: the energy efficiency Directive is an important element to progress towards climate neutrality by 2050, under which energy efficiency is to be treated as an energy source in its own right. Energy efficiency solutions should be considered as a guiding principle of the Union's energy policy and as the first option in planning and investment decisions, when setting new rules for the supply side and other policy areas.

While the energy savings potential remains large in all sectors, there is a particular challenge related to transport, as it is responsible for 30% of final energy consumption, and to buildings, since 75% of the EU building stock has a poor energy performance. Another important sector to which increasing attention is being paid is the information and communications technology (ICT) sector, which is responsible for 5-9% of the world's total electricity use and more than 2% of all emissions.

The European Green Deal launched a new growth strategy for the EU that aims to transform the EU into a fair and prosperous society, with a modern, resource-efficient and competitive economy. The ‘ European Climate Law ’ has made the EU's climate neutrality target by 2050 legally binding.

The Commission has presented a complementary and interconnected set of proposals as part of the 2030 Climate and Energy ‘Fit for 55’ package to achieve the greenhouse gas emission reduction target of at least 55% compared to 1990 . This ‘Fit for 55’ legislative package is the most comprehensive building block in the efforts to implement the ambitious new 2030 climate target, and all economic sectors and policies will need to make their contribution.

The ‘Fit for 55’ package, the Next Generation EU and the Multiannual Financial Framework for 2021-2027 will help to achieve the twin green and digital transitions that Europe is aiming for.

As part of this package, this proposal aims to reduce overall energy use, cut emissions and tackle energy poverty.

CONTENT: with this proposal, the Commission seeks to recast the energy efficiency Directive in order to set a more ambitious binding annual target for reducing energy use at EU level. It will guide how national contributions are established and almost double the annual energy saving obligation for Member States. The proposal thus will strengthen the different provisions of the energy efficiency Directive to ensure that it contributes optimally to the higher climate target of at least 55% GHG emissions reduction ambition for 2030, as set out in the Climate Target Plan.

The proposal includes provisions which substantially change Directive 2012/27/EU. In particular, it:

- sets an increased EU binding energy efficiency target for final and primary consumption, as well as indicative national energy efficiency contributions and provides a formula to Member States to calculate their contributions. The proposal requires Member States to collectively ensure a reduction of energy consumption of at least 9 % in 2030 compared to the projections of the 2020 Reference Scenario so that the Union’s final energy consumption amounts to no more than 787 Mtoe and the Union’s 2030 primary energy consumption amounts to no more than 1023 Mtoe in 2030;

- introduces a new provision on the energy efficiency first principle, to provide the legal basis for the application of the principle, while minimising the administrative burden. It includes an obligation to consider energy efficiency solutions in policy and investment decisions in energy systems and non-energy sectors, including social housing;

- introduces an obligation for the public sector to reduce its energy consumption for public services and installations of public bodies. This can be reached in any subsector of the public sector, including transport, public buildings, spatial planning and water and waste management amongst others;

- broadens the scope of the renovation obligation. The obligation will now be applied to all public bodies at all administration levels and in all sectors of public bodies’ activities, including healthcare, education and public housing, where the buildings are owned by public bodies. The public sector would be required to renovate 3% of its buildings each year to promote the wave of retrofits, create jobs and reduce energy consumption and costs to the taxpayer;

- strengthens public procurement provisions and includes a provision that contracting authorities may require that tenders disclose a Global Warming Potential of new buildings (numeric indicator in kgCO2e/m² (of useful internal floor area) for each life cycle stage averaged for one year of a reference study period of 50 years), in particular for new buildings above 2000 square meters. It is linked to a provision aimed at increasing awareness to circular economy and whole life-cycle of carbon emissions in public procurement practices;

- obliges all Member States (including Cyprus and Malta) to reduce their final energy consumption by at least 1.5% per year between 2024 and 2030 and includes specific requirements for reducing energy poverty;

- requires energy management systems for the largest energy using companies;

- strengthens the protection of consumers introducing basic contractual rights for district heating, cooling and domestic hot water;

- strengthens the obligations towards consumers. Creation of one-stop shops, single points of contact and out-of-court mechanisms for the settlement of disputes are structures that will significantly help to empower customers and final users;

- introduces an obligation for Member States to implement energy efficiency improvement measures as a priority among vulnerable customers, people affected by energy poverty and, where applicable, people living in social housing, to alleviate energy poverty;

- lays down stricter planning and follow up of comprehensive assessments on heating and cooling, including the promotion of local and regional levels.