EC paper backs GDP-linked energy saving goal

    The EU’s energy saving target for 2030 should be mostly based on energy intensity rather than absolute savings, a leaked draft European Commission impact assessment shows.

    The document suggests a “hybrid” target based on absolute savings “for those sectors of the economy where the correlation between energy consumption and economic activity is low” and a goal linked to GDP where this correlation is high.
    An “appropriate split” between the two would be for 37% of the target to be based on absolute savings, with the remaining 63% linked to GDP.

    Because the correlation between energy use and economic growth is highest in transport and industry, the impact assessment suggests that these sectors may be more suited to an energy intensity target, while an absolute target may be better for buildings and the services sector.

    The leaked document, published online by Friends of the Earth on Thursday, seems to favour a binding EU target, as a purely indicative target is deemed less effective.

    But sources say that at a meeting on Wednesday, Commission president José Manuel Barroso and climate and energy commissioners Connie Hedegaard and Günther Oettinger decided to recommend a non-binding 27% energy efficiency target.

    The Commission is drafting an energy efficiency policy proposal for 2020-30, with heads of state and government due to make a final decision on the matter in October.

    The Coalition for Energy Savings and Friends of the Earth criticised the 27% figure as “meaningless” and “pitifully weak”. Earlier research by the Commission has shown that energy savings of at least 25% would be needed to meet the proposed greenhouse gas reduction target of 40% for 2030.
    Both groups emphasised the economic benefits of a stronger target in terms of reduced fossil fuel imports, as set out in the leaked impact assessment. A 40% energy saving targets would cut gas imports by 40% relative to 2010, whereas under business-as-usual these imports will increase by 7%, the assessment states.

    There will be a “small but negative” impact on GDP in 2030 when energy efficiency expenditure will peak, according to one model used in the assessment.

    But another model using different assumptions suggests that a more ambitious target would boost GDP, as well as cutting costs to consumers.

    Under the most ambitious energy efficiency scenario considered, an energy saving of 40% , the carbon price in the emissions trading system could fall to €6 per tonne of CO2 by 2030 due to less electricity demand, compared to €35/tCO2 under BAU.

    The impact assessment gives little support to the option of setting national efficiency targets, stating that while these ensure political accountability and commitment, they may increase administrative costs and fragment the internal market. “The effectiveness of this approach remains uncertain,” the document states.

Excerpted from ENDS Europe DAILY