European Policy Update July 2018

Revised Energy Performance of Buildings Directive Set to Become Law

On 19 June, the revised Energy Performance of Buildings Directive (EU) 2018/844 (EPBD) was published in the EU Official Journal (L156). This will enter into force on  9 July 2018, and Member States will have to transpose the new elements of the Directive into national law within 20 months.

The publication follows formal approval by the European Parliament on 17 April and by the Council of Ministers of the EU on 14 May. The EPBD marks the first of the eight legislative acts in the Clean Energy for All Europeans package to be adopted.
Further information can be found here.

Revised Energy Efficiency Targets for Europe Agreed

On 19 June, negotiators from the European Commission, the European Parliament, and the Council agreed their position on the Energy Efficiency Directive (EED), marking the end of 6 rounds of negotiations.

The main elements of the directive set a new energy efficiency target for the EU for 2030 of 32.5%, with an upwards revision clause by 2023. The 32.5% is not binding and will be translated into Million tonnes of oil (Mtoe) for final and primary energy. This falls short of parliaments original position of 40% but is more ambitious than the position of Council.

The directive requires Member States to express the EU target in primary energy and/or final energy when setting their contributions. Many see this flexibility as a step backwards compared to the Commission proposal which required Member States to consider both targets.

The Directive also continues the annual energy savings obligation set by Article 7 of the EED. This requires Member States to establish policies that deliver new action and savings for households, the service sector and businesses.

Measures aimed at tackling existing market, behavioural and regulatory barriers aim to increase the security of supply and competitiveness of EU industries. It is hoped these will lead to reduced energy bills, thereby addressing energy poverty and realising positive impacts on economic growth and employment.

Following this political agreement, the text of the Directive will have to be formally approved by the European Parliament and Council. Once endorsed, it will be published in the Official Journal of the Union and will enter into force 20 days after publication. Member States will have 18 months to transpose this into national law.

Further information is available here.

Agreement Reached on Energy Union Governance Regulation

On 19 June, negotiators from the European Commission, the European Parliament and Council also reached an agreement on the Governance regulation. The regulation aims to facilitate trust and consensus between the Member States, enabling the political process required to deliver a common energy policy for Member States.

Most importantly, the regulation will ensure that the objectives of the Energy Union, especially the EU’s 2030 energy and climate targets are achieved by setting out a political process to define how EU countries and the Commission work together.
The regulation requires each Member State to present an “integrated national energy and climate plan” by 31 December 2019, and subsequently by 1 January 2029, and every ten years after that. These integrated national energy and climate plans will include national targets, contributions, policies and measures for each of the five dimensions of the Energy Union.

These action plans must also contain the revised national renovation strategies, containing a roadmap to a decarbonised building stock by 2050. However, an exemption in the regulation means that the first set of strategies are not due until March 2020, the same time that the EPBD will be transposed into national law.

For the first time, there is a mandatory requirement for Member States to use a share of their energy efficiency measures to help vulnerable customers, including those affected by energy poverty. EU countries are also called on to encourage their citizens to participate in the preparation of the plans, ensuring that the views of citizens and businesses as well as regional and local authorities are heard.

Following this political agreement, the text of the Directive will have to be formally approved by the European Parliament and the Council. Once endorsed, it will be published in the Official Journal of the Union and will enter into force 20 days after publication. Member States will have 18 months to transpose this into national law.

The proposed text can be found here.

EU Increases Renewables Energy Target to 32% by 2030

On 14 June, a political agreement was reached on the revised Renewable Energy Directive between representatives from the European Council, the European Parliament and the Commission.

The revised directive contains a binding renewable energy target of 32% for the EU by 2030. This is more ambitious than the existing target of 27% but is not as ambitious as Parliament’s proposed target of 35%. However, Member States and the Parliament have agreed to an upwards revision clause for 2023.

The revised directive also enhances the rights of ‘prosumers’, households that generate, consume and sell their own renewable energy. Prosumers will not be subject to charges on self-consumed energy until 2026 and will be entitled to receive remuneration for the self-generated renewable electricity that they feed into the grid.

The agreement also incorporates an “energy-efficiency first” principle, meaning that measures to make energy demand and supply more efficient will be prioritised in all energy planning, policy and investment decisions.

The text of the Directive will have to be formally approved by the European Parliament and the Council. Once endorsed, it will be published in the Official Journal of the Union and will enter into force 20 days after publication. Member States will have 18 months to transpose this into national law.

The text can be found here.

EU Circular Economy Package Agreed

On 14 June, the European Union published the Circular Economy Package in its Official Journal, meaning the legislation will become law on 04 July. The legislation was put forward by the Juncker Commission in 2015, and the publication of the text marks the end of a long series of negotiations between the European Parliament, Council and Commission.

The package, which aims to make Europe “ the global front-runner in waste management and recycling”, sets out new targets for the recycling of municipal waste, which the EU estimates account for between seven and ten per cent of the total waste generated in the EU.

Under the revised legislation, Member States will now be expected to reach a recycling rate of 55 per cent by 2025, 60 per cent by 2030 and 65 per cent by 2035. 65% of packaging will have to be collected for recycling by 2025, with the proportion rising to 70% in 2030.

By 31 December 2024, the Commission will make plans to set up reuse and recycling targets for construction and demolition waste. By 2035, EU members will be permitted to bury a maximum of 10% of their municipal waste in landfills.
Further information can be found here.

European Council Adopts their Conclusion on EU Action Plan for the Circular Economy

On 25 June 2018, the Council of the EU environment committee adopted their conclusions on the delivery of the EU action plan for the circular economy.

In their conclusion, Council outlines their support for the Commission’s approach to consider the life cycle of products in all policies to support the transition to a Circular Economy. The Council also stresses that the successful transition to the Circular Economy requires the involvement and commitment of a wide range of policies and sectors.

Council also calls for governments to actively work with the private sector and other stakeholders to commit to a Circular Economy, and to fully integrate the benefits of closed resource-cycles in the value chain of products, processes and services taking into account consumer behaviour.

The conclusion also underscores the importance of green public procurement (GPP) in steering investments and stimulating the transition to a Circular Economy, and calls upon Member States to enhance action in support of the application of GPP principles.

Further information can be found here.

Increased Funding for Environment and Climate LIFE Programme

On 1 June, it was announced that the Commission is proposing to increase funding by almost 60% for LIFE, the EU funding programme for the environment and climate.
This is the largest proportional increase across the  EU funding programmes the Commission is proposing. One of the main aims of the new LIFE programme is to stimulate investment and support activities focused on energy efficiency.

Further, more funding will be extended to continue to support important EU policy objectives such as the transition to a circular economy; protecting and improving the quality of the EU’s air and water; implementing the 2030 energy and climate policy framework and meeting the Union’s commitments under the Paris Agreement.

The new programme has been designed to be simpler, more flexible and to facilitate broader geographical access. It will focus on developing and implementing innovative ways to respond to environment and climate challenges.

Further information on LIFE funding can be found here.