Energy efficiency can solve three major crises in Europe

Niels Fuglsang
Member of the European Parliament (the Danish Social Democrats, S&D) and rapporteur on the recast of the Energy Efficiency Directive

As we enter a new year, Europe is facing three major crises. We are in an energy supply crisis resulting in rising energy prices and more households struggling to keep their home warm. We are still struggling with the covid-19 pandemic, which has slowed the European economy. And most importantly, we are facing a global climate crisis which calls for immediate action. Energy efficiency can be part of the solution to all three crises. My goal as the European Parliament’s rapporteur on the recast of the Energy Efficiency Directive is to secure that we fully use this potential.

The current energy crisis in Europe is partly due to Europe’s dependency of imported gas. An analysis from the European Commission shows that when we increase our energy efficiency in the Union with 1%, the gas import declines by 2.6%. This shows that energy efficiency is the way forward towards energy self-sufficiency in the Union. Further, it is self-evident that a logical way to tackle rising energy prices is to introduce measures that decrease our need of energy. The cheapest energy of all is the energy we do not use.

It is important to note that the energy supply crisis is also a social crisis. Rising energy prices are especially affecting the most vulnerable citizens. According to the latest data, 31 million European citizens are living in energy poverty. It is very likely that this number is much higher now with the rising energy prices. A study made by the Council of Europe Development Bank finds that a 1% increase in energy efficiency leads to a -0.19% decrease in energy poverty. This shows that energy efficiency is an important tool to tackle energy poverty but it also shows the need to ensure that a part of the measures in the Energy Efficiency Directive are addressing energy poverty directly.

Another social problem facing Europe is the recession and unemployment caused by the covid-19 pandemic. It varies a lot from country to country, how well its economy has made it through the pandemic, but it remains certain that the European economy needs a recovery, and preferably a green recovery. According to the International Energy Agency, energy efficiency can create millions of jobs. It demands labour to renovate our buildings, install energy saving solutions and to create and produce new technology. Energy efficiency can be a part of the green recovery of Europe after covid-19.

And the recovery indeed needs to be a green recovery. The world is facing a serious climate crisis that demands us to rethink our economy and our energy use. According to the International Energy Agency, the most efficient way to reach climate neutrality and the targets in the Paris Agreement involves that 44 % of the necessary CO2-reductions should come from energy efficiency. Using less energy and using energy in smarter ways through renovating our buildings and introducing new green technology is a crucial part of solving the climate crisis.

Therefore, an ambitious recast of the EU’s Energy Efficiency Directive is highly needed. In July 2021, the European Commission presented its proposal of a recast of the directive as part of the so-called Fit for 55 Package, which contains a number of legislative proposals that aim to make the Union fit for reaching the climate targets of the European Green Deal. Ambitious energy efficiency targets is an important part of that aim. My main goal as the European Parliament’s rapporteur on the directive is to secure that the targets in the directive stay ambitious and, very importantly, are binding for the Member States. Only then can we fully exploit the win-win-win potential of energy efficiency, which I have described in this column.

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