Brussels tells states and companies to use less energy

BRUSSELS - The European Commission has adopted a 'wait and see' approach over whether to remove surplus carbon credits arising from gains in energy efficiency, from the EU's emissions trading scheme.

A second controversial decision on the need to make a voluntary EU energy efficiency target legally binding was also kicked into touch, despite estimates that show member states are substantially behind schedule.

Presenting commission proposals for an EU energy efficiency directive in Brussels on Wednesday (22 June), EU energy commissioner Gunther Oettinger defended the commission's approach as a balancing act between opposing views.

Environmental groups want the EU's stated aim of increasing energy efficiency by 20 percent over the coming decade to be made legally binding, pointing to the success of mandatory targets in boosting renewable energy use and cutting carbon emissions.

Several member states, including Germany, are wary this could reduce their economic competitiveness however, with businesses also pushing for a softer approach.

"I think that our two-stage strategy is fair," Oettinger told journalists. "Over the next two years, we want to have voluntary implementation, but obviously we can't just wait another five, six or seven years, and then say in 2019 that we've really missed our target."

An assessment on the need for binding targets will be made in 2014, he indicated.

Under the directive, member states are invited to implement varying schemes so that energy distribution or retail companies save 1.5 percent of their energy sales every year, using improved heating systems, double glazed windows and roof insulation, for example.

Unlike earlier drafts however, the commission's final proposal allows national governments the option of introducing "other energy savings mechanisms" that lead to the same results, leading Green MEPs to accuse the commissioner of succumbing to industry lobbying.

"This loophole ... will prevent the shift away from the current, outdated business model of selling energy by unit to a new model based on 'energy efficiency services'," said Green energy spokesperson Claude Turmes.

A second key component of the directive will require governments to double the current level of retrofitting of public sector buildings to three percent a year. "The public sector has 12 percent of all buildings in Europe," noted Oettinger, calling on governments to lead by example.

Wednesday's publication was preceded by an internal struggle within the commission over the potential fall in price of carbon credits under the bloc's emissions trading system (ETS) as companies pushed to comply with new energy efficiency requirements.

The price in carbon credits could fall so low as to no longer act as an incentive for clean production methods, argued EU climate commissioner Connie Hedegaard, calling for a certain number of credits to be removed from the scheme in order to maintain prices.

Conscious of business opposition to this, Oettinger initially opposed the idea, but under a comprise deal the final draft of the directive allows for adjustments to be made at a later date, if the ETS is deemed to be failing as a result of energy efficiency directive.