8 Energy efficiency
| (27944)
14349/06
COM(06) 545
+ ADDs 1-3
| Commission Communication: Action Plan for Energy Efficiency: Realising the Potential
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| Legal base | — |
| Document originated | 19 October 2006
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| Deposited in Parliament | 26 October 2006
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| Department | Environment, Food and Rural Affairs
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| Basis of consideration | EM of 14 November 2005
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| Previous Committee Report | None, but see footnotes
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| To be discussed in Council | No date set
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
8.1 The Commission believes that there would be very good reasons,
even without high and volatile oil prices, for the Community to
promote energy efficiency. These include competitiveness and the
Lisbon agenda; environmental protection; and promoting the security
of its energy supplies. It therefore put forward in October 2005
a Green Paper[18] which
identified the bottle-necks which prevent cost-effective efficiencies
from being made, notably a lack of information on the costs and
availability of new technology and of existing energy consumption;
technical barriers; misleading prices; and the extent to which
some energy tariff structures have unintentionally created incentives
to consumption.
8.2 The Green Paper also went on to suggest a number
of key actions to overcome these bottlenecks. At Community level,
it noted that the Commission's responsibilities in this area are
not clearly defined in the existing Treaties, and that there are
a large number of players at different levels. It also suggested
that around half of the 20% savings attainable in current energy
use could be achieved by the full application of existing measures,
and the balance by a range of new ones. More specifically, it
proposed the integration of energy considerations into other Community
policies, notably research and technological development; better
information for consumers; a targeted taxation policy; better
targeted state aid; the use of public procurement to "kick-start"
new technologies; and new or improved financing instruments.
8.3 In addition, it highlighted three areas where
specific energy policy measures could be pursued — buildings
(where it saw merit in extending the scope of the Directive on
Energy Performance[19]
in areas such as renovation and lighting); domestic appliances
(where it wanted energy efficient information to consumers extended
to a wider range of appliances and functions); and fuel consumption
of vehicles (where it proposed to discuss with the manufacturers
the implications of efficiency gains having been offset by increased
usage and a move towards heavier performance cars).
8.4 The Green Paper also suggested a number of measures
at national level (including the regulation of network
activities, the regulation of supply activities, and measures
to reduce the levels of energy wasted during electricity generation;
at regional and local level; and in relation to individual
sectors (notably aviation, where it drew attention to the
"Single Sky" initiative, and road traffic, where
it highlighted the role of satellite navigation systems and congestion
charging). The Commission also stressed the importance of much
closer and more vigorous cooperation with other countries, for
example in helping to reduce international demand for oil, and
in relation to climate change.
8.5 As we noted in our Report of 26 October 2005,
the UK welcomed the Green Paper and shares the Commission's view
that action is needed. It also welcomed the focus on the actions
which can be achieved at different levels, and supported what
it described as the Commission's "challenging" target
of reducing the Community's projected energy consumption in 2020
by 20%, whilst stressing the need to concentrate on actions to
add value to existing efforts. We commented that, although the
Communication was poorly structured, making it difficult in places
to identify the various recommendations and conclusions at all
clearly, it was nevertheless wide-ranging, and dealt with an important
subject. We therefore recommended it for debate in European Standing
Committee, and that debate took place on 17 January 2006.
The current document
8.6 In the light of its consultations on that Green
Paper, the Commission has now put forward in this document an
Action Plan for Energy Efficiency, aimed at providing a catalyst
for further action in the period 2007-12.
8.7 This reiterates the economic and environmental
benefits of achieving a 20% saving by 2020, and the extent of
the contributions which can be achieved in relation to residential
buildings, commercial buildings, manufacturing and transport.
It then sets out a large number of detailed measures, focusing
in particular on the following six key areas:
— Dynamic energy performance requirements
The Commission proposes to improve the performance
of energy-using products by updating and expanding the scope of
the Community Labelling Directive (92/75/EC), and to use the framework
provided by the Eco-design Directive (2005/32/EC) to adopt minimum
energy performance requirements for 14 priority product groups,
with special attention paid to the reduction of losses from stand-by
facilities. It proposes to expand the scope of the Energy Performance
of Buildings Directive (20002/91/EC), and to consider proposing
minimum performance requirements for new and renovated buildings:
and it will also be developing a strategy to encourage widespread
development of zero-carbon homes by 2015.
— Improved energy production and distribution
The Commission will develop by 2008 minimum efficiency
requirements for new electricity heating and cooling capacity
lower than 20 MW, together with guidelines for good operating
practices to increase efficiency of existing plants and to reduce
distribution and transmission losses. It will also propose a new
regulatory framework to promote the connection of decentralised
generation.
— Transport
The Commission intends to realise the "significant"
potential energy savings in this sector by proposing legislation
if it becomes clear that the target of 120g/kilometre for vehicle
fuel efficiency by 2012 cannot be achieved by voluntary agreements.
It will also seek to strengthen vehicle labelling and to develop
standards for rolling resistance limits for tyres, whilst measures
will also be proposed to reduce the unnecessary energy consumption
caused by inefficient urban transport and to promote improved
efficiency in maritime and rail transport and aviation.
— Economic incentives and pricing
The Commission proposes to work with the banking
sector to offer financial packages specifically aimed at energy
efficiency savings in small and medium enterprises, and to encourage
the use of Structural and Cohesion Funds to facilitate the leveraging
of private finance, particularly in the new Member States. It
also intends to prepare in 2007 a Green Paper on indirect taxation,
and will subsequently review the Energy Tax Directive (2003/96/EC)
to facilitate a more targeted and coherent use of indirect energy
taxation by integrating energy efficiency and environmental considerations.
— Changing energy behaviour
The Commission proposes to use Community programmes
to develop energy efficiency management schemes and teaching aids,
and to create a "Covenant of Mayors", bringing together
a network of 20-30 mayors from the Community's biggest and most
pioneering cities to exchange and apply energy efficiency best
practice.
— International partnerships
The Commission intends to take the initiative in
proposing an international framework agreement on energy efficiency
with its key trading partners and international bodies, in order
to develop close cooperation on energy efficiency measurement
and evaluation, minimum performance requirements for goods and
services, labelling, energy audits, stand-by losses and other
areas of common interest. It also proposes to host a major international
conference in 2007 to kick start this process.
The Government's view
8.8 In his Explanatory Memorandum of 14 November
2006, the Minister for Climate Change and Environment at the Department
of Environment, Food and Rural Affairs (Mr Ian Pearson) says that
the UK shares the Commission view that action to improve energy
efficiency within the Community is needed, and that this has a
unique role to play in simultaneously improving security of supply,
enhancing the competitiveness of industry, and addressing climate
change. He adds that the UK has welcomed the Commission's increased
focus on energy efficiency over the last eighteen months, and
has consistently called for the development of an ambitious but
realistic Action Plan. It therefore welcomes this document, which
"in both its breadth and depth has delivered a timely and
ambitious set of proposals". The Minister reiterates that
the objective of reducing primary energy consumption within the
Community by 20% by 2020 will be challenging, but says that the
Commission is right to set an ambitious target, backed up by a
detailed set of proposals to achieve it, and to focus on cost-effective
measures.
8.9 The Minister says that the Government has identified
a number of key areas where action at Community level is both
appropriate and desirable. These include rapid and ambitious action
on energy performance standards for appliances (including stand-by
power); revision of the Community labelling framework; action
to realise energy saving potentials in the buildings and transport
sectors, in particular vehicle efficiency standards; recognition
of the central role of the Community's Emissions Trading Scheme
in driving energy efficiency in the energy intensive sectors;
and a greater role for energy efficiency in the Community's external
relations. It therefore welcomes the fact that the Commission
intends to take forward action in each of these areas as a priority,
and expresses the hope that sufficient resources will be committed
to turn proposals into practical actions. However, it also points
out that individual proposals should be discussed in the appropriate
Council, and in particular that any tax matters are a matter for
ECOFIN.
8.10 The Minister concludes that, taken as a whole,
the Action Plan is broadly consistent with, and indeed supportive
of, the UK's energy policy objectives, which explicitly recognises
the need for action to be taken at Community level in a number
of key areas. He says that the Government will therefore seek
to work constructively with the Commission, adding that it is
important that the Action Plan forms a key deliverable under the
wider Strategic Energy Review now being undertaken by the Commission,
and that energy efficiency takes a central role in this whole
policy area.
Conclusion
8.11 This Action Plan addresses an area of obvious
importance, and, for that reason, we are drawing it to the attention
of the House. However, to the extent it essentially confirms the
broad thrust of the October 2005 Green Paper, which was debated
in European Standing Committee in January 2006, and is consistent
with the UK's objectives in this area, we believe it would be
more sensible to consider the various individual proposals in
the Action Plan as and when they are put forward, rather than
recommend another relatively general debate at this stage. We
accordingly clear this document.
18 (26683) 10368/05; see HC 34-vii para 1, (26 October
2005). Back
19
2002/91/EC. Back
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