The European Union has concluded inter-institutional negotiations on the energy efficiency directive, which is a part of the 'Fit for 55' package. This legislative process started in July 2021 and aims to help the EU achieve its climate goals of becoming climate-neutral by 2050. The recasting of the Energy Efficiency Directive is a significant step toward this objective.

The new legislation introduces several measures to accelerate energy efficiency practices. It sets a legally binding target of an 11.7% reduction in final energy consumption by 2030 compared to the 2020 reference year. EU countries are now required to prioritize energy efficiency in policymaking, planning, and major investments, giving the 'energy efficiency first principle' substantial legal standing for the first time.

Additionally, EU countries have agreed to nearly double their annual energy savings obligation, with an average annual energy savings rate of 1.49% from 2024 to 2030, up from the current requirement of 0.8%. This will drive energy savings in critical sectors like buildings, industry, and transport.

The legislation also addresses energy poverty by compelling EU countries to prioritize energy efficiency improvements for vulnerable customers, low-income households, and individuals in social housing.

The public sector will play a significant role in enhancing energy efficiency, with an annual energy consumption reduction target of 1.9% for the whole sector. The public administration will be subject to an extended annual 3% buildings renovation obligation, and energy performance contracts will be prioritized in energy efficiency projects.

Large businesses operating in the EU will be required to have energy management systems and undergo mandatory energy audits if they exceed a certain energy consumption threshold. The directive also introduces a reporting scheme for energy performance in large data centers to promote transparency and optimize energy efficiency.

Local heating and cooling plans will be promoted in larger municipalities, and minimum requirements for efficient district heating and cooling will be tightened towards achieving a fully decarbonized supply by 2050.

To ensure successful implementation, the workforce will be equipped with relevant skills through certification and qualification opportunities for energy efficiency-related professions.

The legislation also supports energy efficiency financing provisions to facilitate investments from the private sector, as public resources are limited for the clean energy transition. EU countries are encouraged to promote innovative financing schemes and green lending products to ensure wider access to financing, with enhanced reporting on energy efficiency investments to improve accountability and transparency.

Lear more on the EC website

Check out the European Council statement

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