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EU Directive on Energy End-use Efficiency and Energy Services

Updated: May 2012

Index of this Page
· ESD repealed by the Energy Efficiency Directive. Read
· Energy Service Directive.
· Review of Energy Service Directive. Read

· National Energy Efficiency Action Plans, 2007. Read

· The Final Directive 2006/32 - Description, 2006. Read

· Opinion by INFORSE-Europe. Read
· Procedure. Read

ESD repealed by the Energy Efficiency Directive

As Europe was not on a track to meet the targets on 20% energy savings for 2020, the European Commission launched an Energy Efficiency Plan on March 2011 suggesting the revision of this Directive, and a Directive on Energy Efficiency was set up in June 2011 and a compromise text was agreed in June 2012 (read it here). It implemented and joint together stronger energy efficiency policy, and it focus on public sector savings, energy metering for consumers and other measures such as mandatory energy audits for large companies.
It repeals the Energy Service Directive 2006/32, though the Members States must follow the time limits for transposition into national law of Directive 2006/32.

Following the Directive on energy end-use efficiency and energy services, all EU Member States should have submitted their second National Energy Efficiency Action Plans in summer of 2011.

EEW2 project, which aims to facilitate the implementation of the Energy Services Directive, will present in September 2012 the results of the EU-wide survey on the implementation of national energy efficiency policies as well as a report for every EU Member State. The national reports will provide a qualitative overview of the specific national energy efficiency policies and their implementation based on the survey results and NEEAPs screening. More info about EEW here.

Energy Service Directive

The purpose of the Energy Service Directive (Directive 2006/32) is to enhance energy end-use efficiency using cost effective improvements. A key element in the directive is a 9% energy efficiency target until 2016 for all EU countries. The directive require all EU countries to make National Energy Efficiency Action Plans (NEEAP)
Since the Directive was adopted in 2006, NEEAPs' have been adopted in the EU countries. They include, among others:
· indicative national targets of 16% realised by actions of states and stakeholders until 2016.
· removing existing market barriers by providing improved frameworks and incentives
· creating conditions to promote and development the energy services market
· setting targets for energy suppliers in many countries, and
· setting new measures, such as tradable “White Certificates”, that have been introduced in some countries.

Due to certain weaknesses in the Directive, it is uncertain whether the measures will add up to the expected savings until 2016 and in a meaningful way.

Because of the problem, a revision of the directive is called for by several stakeholders including INFORSE-Europe. The revision could include, among others, a provision for public incentives to be only provided to measures that guarantee a measurable energy saving. A revision is also considered by the EU Commission, but not within the coming year (2011)

Read about the directive and the NEEAPs at the EU Commission Website

Review of Energy Service Directive

4 years afte the Energy Service Directive entered into force, it is not seen a strong driver for energy efficiency in the EU. On the other hand, it has several good elements and with improvements and better linking to the other EU policies, including the 20% energy efficiency target for 2020, it could play a more important role.
INFORSE - Europe has made following review and proposals for improvements(2010)

In July 2009,
the "Energy Efficiency Watch Initiative" (EEWI) evaluated
the NEEAPs, see The evaluation showed some weakness and methodological uncertainties in the directive that negatively influences the implementation. The spectrum of new measures mentioned in the national action plans is quite impressive, but the study found reasons to be skeptical about whether these measures have been caused by the ESD or whether they would have been implemented anyway. It concluded that in the national plans it is not clear how much expected savings by 2016 will be realised in addition to the savings that would have occurred anyway in the business - as - usual trends.

National Energy Efficiency Action Plans
With the Directive, the EU countries have an obligation to make national energy efficiency action plans. The first plans were made for the deadline, June 2007. By end of 2007, the EU Commission had only received plans from 19 of the 27 EU countries: Since then the remaining 8 plans has been delivered. The plans describe how the countries will realise a 9% reduction in final energy consumption compared with business as usual until 2016. Of the first 17 countries that submitted their plans, 8 intend to achieve higher savings that the 9%; but only 5 of the countries have actually adopted higher targets (10%), Lithuania (11%), Italy (9.6%), Romania (13.5%), and Spain (11% by 2012). Several countries have not made plans until 2016, so it is not possible to evaluate how they can reach the target.
Many national plans include important measures to increase energy efficiency. This includes special actions for the public sector, campaigns, tax incentives, funds, etc. Many of the actions, are, however, not new. The number of new activities from the implementation of the Directive is more limited.
The NEEAP's running time is until 2012. Then new NEAAPs shall be made for the following years.
Read EU Commission overview and the 27 NEEAPs the EU Commission website.

A synthesis of the complete assessment of all 27 National Plans to the National Energy Efficiency Action Plans (NEEAP), was published in 2009. This synthesis was required by the directive.
Read the EC working document as pdf.

The Energy Service Directive - Description
The Directive was finally adopted as Directive 2006/32 on April 5, 2006. It entered into force May 17, 2006 and shall be implemented on May 17, 2008.

The Directive is under Eur Lex: (2006/32). The energy efficiency target is 1%/year, for the first 9-year period. The target is defined as the energy efficiency improvements resulting from energy efficiency measures specified in the text. While this is a sensible way to measure it from a policy-maker's point of view, the list includes a number of measures that are - or can be - part of the normal "business as usual" development of increased energy efficiency of the societies. Thus, its open for some "free riding" of countries that counts energy efficiency improvements that are not an effect of active policies.
The Directive also sets provisions to create conditions for the development and promotion of a market for energy services and for the delivery of other energy efficiency improvement measures for final consumers.

Opinion by INFORSE-Europe
INFORSE-Europe urges the EU countries to strengthen the energy efficiency target in the implementation of the directive. The target should be more than 1%/ per year above business as usual, INFORSE-Europe recommends 2-3% per year in additional energy efficiency increase. This call for seemingly high targets are because of the low increase in energy efficiency in the last 5 years, both compared with the technical and economical possibilities and compared with the previous achievements.

INFORSE-Europe also proposes that the countries agree to the proposal of integrating energy efficiency in the energy markets by introducing schemes where a fraction of the electricity price is used for consumer information and promotion of energy efficiency. These activities can be organised by the distribution companies that by nature are not players on the competitive market, or by special energy savings trusts. If the activities are well organised, the savings that the consumers get because of the activities will more than offset the fees they pay for the activities. Recent evaluations of Danish electricity efficiency programs proves that. Free-riding by including "business as usual" as described below should be avoided.

Procedure for Adoption of the Directive
May 17, 2006: The Directive entered into force and must be implemented two years later. The countries should develop energy efficiency action plans before 30. June 2007 for the first three-year period.

April 5, 2006: The Directive was finally adopted as directive 2006/32.

March 14, 2006: The EU energy minister adopted the Directive in the form proposed by the EU Parliament 13/12 2005.

December 13, 2005: The EU Parliament agreed to the proposal of the energy ministers with targets of just 1% per year energy efficiency increase (9% in 9 years) and only as an indicative target. In addition the countries must impose obligations on their energy suppliers and prepare national Energy Efficiency Action Plans.

June 28, 2005: The energy ministers made a political agreement at their meeting June28. They did not agree the position of the Parliament as they do agreed to only 6% increase in energy efficiency for the first six years, no mandatory targets, and no special targets for the public sector.

June 7, 2005: The EU Parliament agreed to ask for targets June 7, the EU Parliament agreed to ask for stronger targets. They asked for progressive increasing targets of 1% per year for the first 3 years (2006-2008), 1.3% for the for the next three years, and 1.5% for the following three years. In addition they asked for higher targets for the public sector, starting with 1.5% for the first years. The Parliament also proposed that the targets should be mandatory.

March-April 2005: The proposal is discussed in European Parliament in 2005. The Parliament's environmental and energy committees have proposed higher efficiency increases than the 1% per year, included in the original proposal. The environmental committee proposed 2.5%/year with 3% per year for the public sector.

November 29, 2004: The proposal was discussed at EU energy ministers council, but no agreement was reached. Unfortunately the countries are not all agreeing with the above opinion of INFORSE-Europe.

Additionally the countries were limited in their decision-making because they are waiting for the Parliaments opinion.

Spring 2004: Preliminary discussions took place in the EU Parliament and in the EU countries in the spring of 2004. While conclusions from these are preliminary, all countries could accept EU-wide indicative energy efficiency targets, while some country representatives had reservations to national indicative targets.

December 10, 2003: Proposed by the Commission

The proposal's progress was available under the Parliament's website, but as it is adopted it is not available any more there.