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Council agrees on higher targets for renewables and energy efficiency

Council agrees on higher targets for renewables and energy efficiency
Agnès Pannier-Runacher, Minister for Energy Transition, France at the press briefing on June 27, 2022 (photo courtesy EU).

The European Council has adopted its negotiating positions on two legislative proposals - the Renewable Energies Directive and the Energy Efficiency Directive - that tackle the energy aspects of the EU’s climate transition under the ‘Fit for 55’ package that was presented by the European Commission on July 14, 2021. The agreements pave the way for the Council to start negotiations with the European Parliament.

Energy production and use account for 75 percent of the EU’s emissions and according to the Council, the more ambitious targets agreed upon on June 27 will “be a significant contribution” toward meeting the EU’s overall goal of reducing net greenhouse gas (GHG) emissions by at least 55 percent by 2030 compared to 1990 levels

The agreement of the member states on these two proposals marks a major step forward in the fight against global warming. Decarbonizing our energy systems through a massive deployment of renewable energies and significant efforts in energy savings is essential to achieving our climate objectives. It will also help us to reduce our dependence on Russia for energy, in the context of the war in Ukraine, commented Agnès Pannier-Runacher, French minister for the energy transition.

Renewable energies

The Council agreed to set a binding EU-level target of 40 percent of energy from renewable sources in the overall energy mix by 2030. The current EU-level target is at least 32 percent.

Member states will need to increase their national contributions set in their integrated National Energy and Climate Plans (NECPs), to be updated in 2023 and 2024, in order to collectively achieve the new target.

In addition, to advance the integration of renewables in sectors where incorporation has been slower, the Council agreed on more ambitious sector-specific targets and measures.

Regarding the sub-targets for transport, the Council introduced the possibility for member states to choose between:

  • a binding target of 13 percent GHG intensity reduction in transport by 2030. More options will be available for member states to reach this objective, such as a possibility to set a differentiated goal for maritime transport as long as the overall goal is met;
  • or a binding target of at least 29 percent renewable energy within the final consumption of energy in the transport sector by 2030

The Council set a binding sub-target for advanced biofuels in the share of renewable energies supplied to the transport sector at 0.2 percent in 2022, 1 percent in 2025, and 4.4 percent in 2030, integrating the addition of double counting for these fuels.

For renewable fuels of non-biological origin in transport such as renewable hydrogen and hydrogen-based synthetic fuels, the Council agreed on an indicative sub-target of 2.6 percent, which corresponds to 5.2 percent also with the addition of a multiplier.

The Council added a cap to the amount of final consumption of energy in the maritime sector to be included in the calculation of their specific transport targets.

The Council decided on a gradual increase in renewable targets for heating and cooling, with a binding increase of 0.8 percent per year at a national level until 2026 and 1.1 percent from 2026 to 2030. The minimum annual average rate applicable to all Member States is complemented with additional indicative increases calculated specifically for each member state.

The Council set an indicative target of a 1.1 percent annual average increase in renewable energy use for industry. It also agreed that 35 percent of the hydrogen used in industry should come from renewable fuels of non-biological origin by 2030 and 50 percent by 2035.

The Council set an indicative target of at least a 49 percent renewable energy share in buildings in 2030.

The Council strengthened the sustainability criteria for biomass in order to reduce the risk of unsustainable bioenergy production. The Council also added measures to limit fraud as regards the durability of biofuels.

The Council included accelerated permitting procedures for renewable energy projects in line with the priorities of the REpowerEU plan as proposed by the Commission in May 2022.

The purpose is to fast-track the deployment of renewable energies in the context of the EU’s plan to become independent from Russian fossil fuels, after Russia’s invasion of Ukraine.

Energy efficiency

The Council agreed to reduce energy consumption at the EU level by 36 percent for final energy consumption and 39 percent for primary energy consumption by 2030.

Final energy consumption represents the energy consumed by end-users, while primary energy consumption also includes what is used for the production and supply of energy.

The key target of a 36 percent reduction at the EU level for final energy consumption would be binding. The targets use a new baseline and correspond to a 9 percent reduction target compared to 2020.

The Council agreed that all member states will contribute to achieving the overall EU target through indicative national contributions and trajectories, set by the member states in their integrated NECPs to be updated in 2023 and 2024.

The formula defined in Annex I for calculating these contributions would be indicative, with the possibility of deviating from it by 2.5 percent. The Commission would calculate whether all the contributions add up to the 9 percent target and if not, issue corrections to the national contributions that are lower than what they would have been using the formula.

The formula is based on, among other things, energy intensity, GDP per capita, development of renewables, and energy savings potential.

The Council also agreed on a gradual increase of the energy savings target for final energy consumption. Member states would ensure savings of 1.1 percent of annual final energy consumption from January 1, 2024; 1.3 percent from January 1, 2026; and 1.5 percent from January 1, 2028, to December 31, 2030, with the possibility to carry over a maximum of 10 percent of excess savings to the following period.

The Council included the possibility to count in energy savings realized through fossil fuel combustion technologies in the industrial sector only, in duly justified cases, confirmed by energy audits, in the calculation towards the target.

The Council agreed to a specific obligation for the public sector to achieve an annual energy consumption reduction of 1.7 percent, or alternatively by at least 1.9 percent each year if excluding public transport or armed forces, that would be binding four years after the entry into force of the regulation, starting gradually with larger municipalities.

In addition to this, the Council agreed that member states would be required to renovate each year at least 3 percent of the total floor area of buildings owned by public bodies.

The Council also agreed that a proportional share of energy savings in member states would be focused on vulnerable consumers.

The Council added a provision on the transparency of the energy consumption of data centres. Data centres would be required to publish information on their energy consumption every year from 2024.

The Commission would draw a public EU database, compiling information on data centres’ energy consumption.

The Council and the Parliament will now enter interinstitutional negotiations to agree on the final text of the two directives.

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