A controversial proposal to impose energy efficiency savings across the European Union is at risk of being neutered or abandoned, even though it has been identified as essential for encouraging economic growth.
Herman Van Rompuy, the president of the European Council, called last week, at the conclusion of a meeting of government leaders, for “rapid progress” on the energy efficiency directive, which he identified as an important proposal in the EU's growth strategy.
But negotiations between the Council of Ministers, representing the national governments, and members of the European Parliament are deadlocked. If there is no breakthrough at negotiations scheduled for Tuesday (5 June), then, diplomats say, the proposal could be shelved for the rest of the year or even withdrawn by the European Commission.
“Flexibility is needed on both sides of the table,” a spokesperson for the Danish government said.
The Commission proposed in 2011 a law aimed at achieving the EU's declared aim of increasing energy efficiency by 20% by 2020. Among the implementing measures proposed was a requirement that member states should have to renovate 3% of public buildings each year and obligations on energy suppliers to ensure that their customers make energy efficiency improvements of 1.5% per year.
Since then most member states have sought to water down these obligations.
The Council agreed a negotiating position in April which said that greater flexibility should be added to the proposal by, among other things, reducing the amount of building renovation required of public authorities.
The Council wanted exemptions from further energy-saving requirements for member states that had already taken “early action”. They also argued that utility companies need not exact efficiencies from consumers if they achieved other efficiencies elsewhere, such as at power plants.
However, members of the European Parliament have been arguing that the law should be even tougher than the Commission proposed. The Parliament's industry, research and energy committee voted in February that there could be flexibility on the proposed implementing measures only if the 20% efficiency target was made legally binding – something the Council refused to accept. Without a binding overall target, the MEPs would not allow exemptions from the binding implementing measures. They also wanted the energy savings obligation extended to transport, something not included in the Commission's proposal. The committee's position was backed by all the main political groups.
The Danish government has been seeking to close the gap between the Council and Parliament. Last week, it put a revised text to member states' representatives seeking to limit the use that national administrations could make of the suggested exemptions. The number of exemptions would be limited and their effect capped at no more than 25% of the required energy efficiency gains.
The compromise was only narrowly approved by the Council, with many member states unenthusiastic, suggesting that Denmark has little room to make further concessions to the Parliament.
However, when negotiators from the Parliament and Council met this week (29 May) MEPs dismissed the compromise as unacceptable.
Claude Turmes, the MEP who is leading negotiations for the Parliament, said that while the compromise text limited the use of exemptions from the energy savings obligations, it imposed no limits on other concessions. Like the first Council position, the Danish text would still remove from the Commission's initial proposal a requirement to renovate all types of public buildings.
The Commission and MEPs argue that the Danish text would still leave the EU far short of its target of 20% savings by 2020. Member states counter that they do not view the energy efficiency directive as the only means to reach that target.
Matthieu Ballu of the Coalition for Energy Savings said its analysis was that the Danish proposal would close about half the gap to the 2020 efficiency target, whereas the previous Council position would have closed the gap by one-third. Brook Riley of campaign group Friends of the Earth, said it was “still not much of a compromise”.
Sectors of the energy industry that could benefit from the energy efficiency law are concerned that it will either be abandoned or diluted beyond recognition. COGEN Europe, which represents the combined heat and power industry, wrote to Martin Lidegaard, the Danish energy minister, this week, saying that the Council's changed position would represent a missed opportunity for energy savings between now and 2020 equivalent to 25 million tonnes of oil.
A final round of negotiations is set for the second week of June, but if MEPs maintain their objections on Tuesday, there may not be a reason to continue discussions.