EUROPEAN COMMISSION

Brussels, 18.11.2015

COM(2015) 574 final

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

Assessment of the progress made by Member States towards the national energy efficiency targets for 2020 and towards the implementation of the Energy Efficiency Directive 2012/27/EU as required by Article 24 (3) of Energy Efficiency Directive 2012/27/EU

{SWD(2015) 245 final}

Table of contents

1.    Introduction    

2.    Progress towards the 2020 EU energy efficiency target    

3.    National targets    

4.    Energy consumption trends and assessment of national measures by sector    

4.1.    Industry    

4.2.    Residential sector    

4.3.    Services sector    

4.4.    Public sector    

4.5.    Transport sector    

4.6.    Generation sector    

4.7.    State of transposition of the EED    

4.8.    Financing    

4.9.    Final energy savings in 2016 required by the Energy Services Directive 2006/32/EC    

5.    CONCLUSION    

Annex I    

Annex II    

1.Introduction

The Energy Union Strategy 1 called for a fundamental rethinking of energy efficiency, to treat it as an energy source in its own right, representing the value of energy saved. Focusing on energy efficiency as a way of moderating energy demand delivers on the objectives of security of supply, competitiveness and sustainability, and results in cost savings for consumers and industry.

The Energy Union Strategy confirmed the energy efficiency target of 20 % by 2020, which means less than 1086 Mtoe of final energy consumption or less than 1483 Mtoe of primary energy consumption. This is the basis for moving forward to a reduction of at least 27 % by 2030 to be reviewed by 2020, having in mind a figure of 30 %.

In 2014, the Commission concluded in its Energy Efficiency Communication (COM(2014) 520 final) that the EU would achieve energy savings of around 18-19 % in 2020. Since then Member States have made improved efforts to implement EU energy efficiency legislation and have set more ambitious energy efficiency targets (now adding up to 17.6 % primary energy saving in 2020, last year the targets added to only 16.4 %). On this basis the Commission remains optimistic that the 20 % target will be achieved provided existing EU legislation is fully implemented, Member States increase their level of ambition and the investment conditions for energy efficiency continue to improve across Europe.

This report gives an assessment of progress made towards this target as well as the implementation of the Energy Efficiency Directive 2012/27/EU. It includes some recommendations for Member States 2 and is based on Member States’ Annual Reports and the National Energy Efficiency Action Plans. This report is accompanied by a staff working document 3 which contains a detailed description of the used performance indicators.

2.Progress towards the 2020 EU energy efficiency target

There has been significant progress in reducing energy consumption at EU level. Overall, final energy consumption decreased by 7 % between 2005 and 2013. Primary energy consumption decreased by 8 % in the same period and preliminary estimates show a continuation of this declining trend to 1516 Mtoe in 2014. 4

Final energy consumption 5 in the EU-28 dropped from 1186 Mtoe in 2005 to 1102 Mtoe in 2012, but increased to 1105 Mtoe in 2013. The increase in 2013 was mainly due to increases in Belgium, the Czech Republic, Germany, Ireland, France, Hungary, the Netherlands, Austria, Slovakia and the United Kingdom. 6

The energy consumption of industry decreased in absolute terms from 327 Mtoe in 2005 to 275 Mtoe in 2012 (16 %). Overall, the economic crisis, restructuring effects of the European economies and energy efficiency measures contributed considerably to this downward trend. Nevertheless, the energy consumption of industry increased to 277 Mtoe in 2013. This was due to an increase in several industrial subsectors, the highest of which was a 6 % increase in the mining and quarrying sector.

In the residential sector, final energy consumption decreased by 3 % in 2013 compared to the level of 2005.

In the services sector, final energy consumption increased by 6% from 2005 to 2013, but the added value created in this sector increased by 11 % over the same time which resulted in an improved energy intensity.

Final energy consumption in transport decreased by 6 % over this period. In 2013, transport accounted for the biggest share of final energy consumption (32 %). It was followed by the residential sector with 27 %, industry with 25 % and the services sector with 14%. Other sectors were responsible for the remaining 2 %.

Primary energy consumption 7 in the EU-28 dropped from 1709 Mtoe in 2005 to 1567 Mtoe in 2013. Preliminary estimates show that primary energy consumption continues declining in 2014 to 1516 Mtoe 8 . However, Belgium, Denmark, Germany, Estonia, France, Poland, Portugal and Slovakia showed an increase in primary energy consumption in 2013 compared to 2012.

Overall, the decrease in primary energy consumption in the EU-28 from 2005 to 2013 was primarily due to a drop in final energy consumption and was also influenced by the structural change in the power generation sector towards more renewable electricity. The energy consumption of the energy sector decreased by 13 % and distribution losses fell by 8 % in this period.

The heat produced by CHP plants in the EU-28 decreased by 9 % from 46 Mtoe in 2005 to 42 Mtoe in 2013.

3.National targets

In 2013, Member States identified national indicative targets for energy efficiency. 9 Since then, Austria, Bulgaria, Croatia, Cyprus, Greece, Hungary, Italy, Slovakia and Spain have set more ambitious targets in their 2014 National Energy Efficiency Action Plans for final energy consumption, focusing on a larger decrease of demand in the residential, services, industrial and transport sectors. Only Malta and Poland have notified less ambitious final energy consumption targets to the Commission. The objective of energy efficiency is to decouple energy consumption from economic growth due to efficiency gains. In this context, the level of the indicative targets set by Croatia, Cyprus, Finland, Greece, Italy, Portugal and Romania are not ambitious enough as final energy consumption is projected to be higher than the forecast GDP development from 2014 to 2020. 10

As regards primary energy consumption, Cyprus, France, Greece, Hungary, Ireland, Malta, Spain and Sweden have set more ambitious indicative targets in their 2014 National Energy Efficiency Action Plans compared to their initial targets. In particular Austria, Belgium, France, Germany, Malta, the Netherlands, Sweden and the United Kingdom have set themselves ambitious targets in light of the GDP growth expected in 2014-2020. Bulgaria, Croatia and Slovakia have reduced their level of ambition. For Croatia, Finland, Greece and Romania the indicative primary energy consumption targets for 2020 would allow an increase of primary energy consumption, at a rate higher than their expected average GDP growth in 2014-2020. 11

Collectively, Member States have failed to set national energy efficiency targets ambitious enough to add up to the 20% EU level target. The sum of the national indicative targets corresponds to 17.6 % primary energy savings compared to projections for 2020. While this represents a welcome improvement compared to the first set of notified targets, it still falls short of the EU target to save 20 % of primary energy compared to projections in 2020. However, data on recent progress suggest that a more optimistic conclusion can be drawn.

4.Energy consumption trends and assessment of national measures by sector

To assess Member States’ progress towards their indicative energy efficiency targets, the Commission analysed their National Energy Efficiency Action Plans (NEEAPs), Annual Reports and the set of indicators described in more detail in the accompanying staff working document 12 . The analysis shows that most Member States decreased their primary and final energy consumption between 2005 to 2013 at a rate that was higher than the rate of decrease which would be needed in the period 2005 to 2020 for them to meet their primary and final energy consumption targets by 2020. The exceptions are: Belgium, Estonia, France, Germany, the Netherlands, Poland and Sweden (for primary energy consumption) and Austria, Belgium, Estonia, France, Germany, Lithuania, Malta and Slovakia (for final energy consumption). 13

Primary energy intensity 14 for the whole economy decreased in all Member States on average between 2005 and 2013, except in Estonia.

4.1.Industry

The final energy consumption of industry decreased in absolute terms from 327 Mtoe in 2005 to 277 Mtoe in 2013 (-15 %). The decrease between 2008 and 2012 can be explained by a decrease of industrial activity and changes in the structure of the industry. However, energy efficiency improvements contributed most to this positive trend with an almost three times bigger impact. 15  

As economic growth is expected in most Member States in the coming years, more efforts will be needed to ensure the decoupling of energy consumption from economic growth. In addition, lower oil and gas prices could reduce the incentive for energy efficiency investments in this sector as the payback period gets longer.

There is a significant difference between the energy intensity of industry in different Member States, with a sevenfold difference between the most energy-intensive Member State, Bulgaria and the least energy-intensive ones: Denmark and Ireland. Most Member States decreased energy intensity in the industry and construction sectors from 2005 to 2013, with the exceptions being Greece, Hungary, Ireland and Latvia.

The European emission trading system has been an important driver of energy efficiency investments in the energy-intensive industry sectors. Furthermore, most Member States support the energy efficiency of industry through financial incentives and fiscal measures. Voluntary agreements are another common policy instrument for the industry sector. Nine Member States have set up such agreements with industry actors: Belgium, Denmark, Finland, Ireland, Luxembourg, the Netherlands, Portugal, Sweden and the United Kingdom. Energy savings in the industry sector are also achieved with the help of market-based instruments, e.g. in Italy through the white certificate scheme and in Denmark through the energy saving obligation scheme.

The implementation of Article 8(4) of the EED, which requires large companies to carry out energy audits from 2015 onwards, can help the industrial sector to identify cost-efficient energy efficiency measures. However, around half of the Member States have not yet notified the Commission of national legislation transposing this EED requirement; the Commission has therefore started infringement procedures against these countries.

Member States should also address their policies towards small- and medium-sized companies to remove market barriers and enable them to exploit any remaining energy efficiency potential.

4.2.Residential sector

The final energy consumption of the residential sector decreased in absolute terms from 306 Mtoe in 2005 to 296 Mtoe in 2013 (-3 %), although it slightly increased from 2012 to 2013. The overall decrease was mainly due to energy efficiency measures, especially in relation to space heating energy consumption. 16

Energy consumption per square metre decreased in all Member States between 2005 and 2013 except in Italy, where it increased by 10 %, and Estonia, where it was constant. 17 The lower energy consumption per square metre could be explained by more stringent energy efficiency requirements for buildings, appliances and heating technologies, partly due to the progressive implementation of the Energy Performance of Buildings Directive.

Member States recently prepared a first long-term renovation strategy for their entire building stock, as required by Article 4 of the EED. 18 Although some strategies were missing certain information, for example on non-residential buildings, investment costs and sources of funding, the quality of the long-term renovation strategies is expected to improve in the next update which is due in 2017.

To improve the quality of renovation, installers and craftsmen need to be trained and their skills in new and more efficient technologies that could replace existing equipment and processes in construction and renovation needs to be increased. The implementation of national qualification and training roadmaps developed under the EU 'BUILD UP Skills' project have started in 21 Member States in 2013 and 2014 already. 19 In addition, other national training measures have been described in the NEEAPs but further, targeted efforts are needed in this area.

Energy efficiency in the residential sector benefits from a wide range of policy actions, such as regulatory and financial/fiscal measures, as well as information- and awareness-raising measures, voluntary agreements, infrastructure investment (smart-metre roll outs), market-based instruments, and others. Regulatory measures mostly relate to the implementation of the Energy Performance of Buildings Directive, including minimum energy performance requirements and certificates for new and existing buildings and inspections of water boilers and air conditioning systems, and the Ecodesign Directive, including energy efficiency standards for appliances and equipment.

Financial and fiscal measures that support energy efficiency improvements include grants and subsidies. A few Member States (France, Germany, Greece, the Netherlands and Portugal) offer loan programmes. Tax relief on energy efficiency upgrades for households is reported for Denmark, Finland, France, Germany, Greece, Italy, the Netherlands and Portugal. Six Member States (Austria, Denmark, Estonia, Germany, the Netherlands and Sweden) have put in place energy taxes that aim to change behavioural and investments in energy efficiency. Smart metres are being rolled out to residential customers in Austria, Cyprus, Denmark, Finland, France, Greece, Ireland, Latvia, Malta and the United Kingdom.

The energy efficiency obligation schemes focus mostly on the residential sector to achieve the 1.5 % annual end-use energy savings required by Article 7 of the EED. In total, 16 countries have adopted or plan to adopt an energy efficiency obligation scheme. Most Member States have chosen to apply the allowed exemptions to achieve the maximum permitted reduction of 25 % (except for Denmark, Portugal and Sweden). 20 This reduces the amount of energy savings which will be achieved by 2020. The Commission also recognises a weak implementation of this article in some countries as many Member States rely on old measures, the implementation of the notified measures are delayed, expected savings are overestimated or overlapping effects of different policies are not taken into account correctly. Therefore, the Commission will follow the further implementation of this article closely.

Member States need to better inform consumers about energy efficiency options and to further improve the investment conditions for private consumers to accelerate the currently very low renovation rates for the existing building stock in Europe. Targeted measures are needed in this sector as households have a lower responsiveness to increasing energy prices than e.g. energy-intensive industry. In addition, more focused measures are needed for vulnerable consumers to address fuel poverty effectively and to improve living standards, for example, measures such as interest-free loans and addressing the tenant-landlord dilemma would be beneficial.

4.3.Services sector

The final energy consumption of the service sector increased in absolute terms from 144 Mtoe in 2005 to 153 Mtoe in 2013 (6 %), However, energy consumption grew more slowly than the added value over the same period (11 %). Overall, the energy intensity of the EU services sector (normalised with heating degree days) decreased by 4 % between 2005 and 2013, mainly in Austria (20 %), Hungary (26 %), Ireland (37 %) and Portugal (21 %) which is a very positive trend. However, Bulgaria, Croatia, Finland, Greece, Italy, Luxembourg and Spain increased their energy intensity in 2013 compared to 2005 levels.

Most of the regulatory measures applied in the residential sector also apply in the services sector.

As the services sector is expected to grow, Member States will need to tackle its challenges further with appropriate measures to continue the positive trend of its decreasing energy intensity across the EU.

4.4.Public sector

Article 5(1) of the EED requires Member States to renovate 3 % of the total floor area of heated and cooled buildings owned and occupied by central government, or to achieve equivalent savings per year. 18 Member States will implement the requirements of Article 5 through alternative measures (such as measures that create incentives for occupants to change their behaviour); the others have opted for the default approach of renovating 3 % of the total floor area. Member States are obliged to report in their Annual Reports the total building floor area of buildings which did not meet the requirements of Article 5(1) of the EED and the renovated floor area or the amount of energy savings achieved under Article 5(1) and 5(6) of the EED in the previous year. Most Member States provided some information on this in their 2015 Annual Reports; Greece, France, Hungary, the Netherlands and Slovenia did not provide any information on this. 21 Data on the total building floor area of the buildings which did not meet the energy performance requirements under Article 5 were provided in most of the times but data on the savings through the renovations (or alternative measures) of buildings owned by the central government which are obligatory from 1 January 2014 on were missing or unclear in most of the Annual Reports. Therefore, is not possible yet to assess if Member States fulfilled their obligations in 2014 in line with Article 5 EED but the Commission will follow the proper implementation closely.

Under Article 6 EED, Member States must ensure that central governments purchase only products, services and buildings that have a high energy-efficiency. All Member States have presented the measures needed to ensure that this happens, but measures to encourage other public bodies to do likewise were missing in the NEEAPs for Belgium, Italy and Spain. The Commission has launched a study to assess the effectiveness of this provision. Interim results show that energy efficiency requirements in public procurement are not fully understood by all procurement agents and that the transposition of the requirements of Article 6 EED is not yet finalised in some countries. According to Member States, other barriers include: authorities’ lack of skills and practical know-how on energy efficient public procurement; lack of clear guidance and a shortage of practical toolkits; and unclear criteria for public procurement assessments. The Commission will therefore look into ways to better assist Member States in implementing this provision.

4.5.Transport sector

The final energy consumption in transport 22 of the EU-28 decreased from 370 Mtoe in 2005 to 349 Mtoe in 2013 (-6 %). This reflects an increase of 4 % during 2005-2007 but a rapid decrease since then (-9 % for 2007-2013).

About 40 % of the 2007-2013 reduction is estimated to be due to the economic crisis, with stabilisation of passenger traffic and a fall in freight traffic. The remaining 60 % mostly originates from improvements in the energy efficiency of passenger cars, driven by stricter CO2 standards and targeted transport policies in Member States (which were also notified in some cases as transport measures under Article 7 EED to reduce final energy consumption). 23  

The highest reductions in final energy consumption in the transport sector were registered in Greece, Ireland and Spain in the period 2005-2013. Consumption increased slightly in Croatia, Finland and Germany and a considerable increase was recorded in Lithuania, Malta, Poland, Romania, Slovakia and Slovenia. 24  

In 2013, the share of collective passenger transportation increased in half of the Member States: Austria, Belgium, Croatia, Czech Republic, Finland, Greece, Hungary, Luxembourg, the Netherlands, the United Kingdom, Portugal, Slovenia, Spain and Sweden. In the rest of the Member States the share of passenger cars increased. 25 Regarding freight transport, Austria, Belgium, Denmark, Finland, Germany, Italy, the Netherlands, Portugal, Romania, Sweden and the United Kingdom increased the share of railway and inland waterways freight transport in 2013 compared to 2005 levels.

Member States support efficiency in both private and public transport through improvement of vehicle efficiency and reduced CO2 emissions compliant to the EU CO2-standards, shift towards more environmentally friendly means of transport (e.g. rail or other means of public transport), consumer information and behaviour.

For public transport, Bulgaria, Czech Republic, Denmark, France, Italy, Latvia, Portugal, Sweden and the United Kingdom reported measures targeting rail transport in their NEEAPs. Energy efficiency requirements for taxis have been established in Denmark. The extension of metro transport has been reported by Bulgaria, Czech Republic, Denmark, Greece and Italy. The promotion of modal shift and encouragement to use public transport or cycling and walking has been mentioned by Belgium, Ireland and Portugal. Private transport measures include improvements in car fleet efficiency, measures supporting the use of electric, hydrogen or more fuel-efficient cars, developing bicycle lanes etc. Financial incentives to buy energy efficient vehicles are provided by Croatia, Luxemburg and Spain (for electric cars) and the Netherlands, while Denmark offers tax incentives for electric and hydrogen car owners and owners who change to lower fuel consumption vehicles. Behaviour measures are also mentioned for Finland, the Netherlands (driver training) and the United Kingdom. The shift of freight transport towards more environmentally friendly modes such as rail, maritime transport and inland waterways is also planned in France.

4.6.Generation sector

The decrease of primary energy consumption during the past years was due to a decrease in final energy consumption, the implementation of the European emission trading system and a structural change in the power generation sector. In particular, structural changes from thermal power generation towards more renewable energy sources took place in the last years.

Efficiency in the generation sector is key to achieving the 2020 energy efficiency targets. Energy efficiency in the generation sector contributes strongly to security of supply and decarbonisation. Besides the European emission trading system targeted energy efficiency policies can increase energy efficiency in this sector e.g. through the increase of the share of heat and electricity produced with high-efficiency combined heat and power plants (CHP), district heating and cooling, as well as renewable energies.

Member States have increased their efforts with regard to renewable energy in recent years. In 2013, the combined EU share of renewable energy reached 15 % and the estimate for 2014 indicates a 15.3 % share which contributed to a reduction in primary energy consumption as most sources of renewable energy have 100 % transformation efficiency. 26

Article 24(6) of the EED requires Member States to provide information on heat and electricity produced from thermal power plants and, in particular, from CHP. For EU-28, the heat produced from CHP plants decreased from 46 Mtoe in 2005 by 9 % to 42 Mtoe in 2013. Given the efficiency gains and contribution to industrial productivity, additional effort is needed from Member States to increase the share, in particular, of high-efficiency CHP plants.

Article 14 of the EED sets a framework to trigger investment in efficient district heating and cooling. A positive trend can be observed in nine Member States, where the transformation output from district heating plants increased on average between 2005 and 2013. Nevertheless, in the remaining 12 Member States with district heating, a decreasing trend can be observed. 27 Therefore, to fully exploit the energy-efficiency potential in the generation sector, the full implementation of Article 14 and the comprehensive assessments Member States are required to undertake by end 2015 (analysing their potential for applying high-efficiency cogeneration and efficient district heating and cooling) are of major importance.

Box 1: Good examples in Member States