The European Commission 'Von der Leyen' has explained more about the European Green Deal; the plan to make Europe climate-neutral by 2050. This plan can be seen as the successor to the Clean Energy Package, which was initiated by the Juncker Commission (2014-2019) to optimise the European climate policy framework. In this article an overview of the state of affairs.
Clean Energy Package
In 2016, the Juncker Commission (2014-2019) launched the Clean Energy Package with the aim of making regulations more effective in achieving the climate objectives for 2030. At the time, a member state had to comply with many different reporting requirements, such as a National Energy Efficiency Action Plan (NEEAP) and a long-term renovation strategy on the basis of the Energy Efficiency Directive (EED), a National Renewable Energy Action Plan (NREAP) on the basis of the Renewable Energy Directive (RES), the annual submission of the greenhouse gas inventories to meet the Paris Agreement requirements, etc. Achieving a sustainable, secure and affordable energy supply for the final consumer, i.e. the realisation of an Energy Union, was one of the main conditions in the realisation of the package.
The spread of the obligations over several Directives with separate deadlines and review moments could make it difficult to see the wood for the trees. With the Clean Energy Package, various reporting requirements were brought together into one new Governance Regulation; Regulation on the Governance of the Energy Union and Climate Action. The other Directives still exist, but are now more focused on specific requirements per sector (e.g. buildings, electricity market) or climate objective (e.g. energy efficiency, renewable energy). The sector specific Directives include Union-wide measures that member states have to implement. The objective specific Directives and Regulations include the targets for 2030, in line with the commitments made under the climate agreements with the United Nations.
For more information on the United Nations climate objectives, click here.
An overview of the main directives and regulations
The Clean Energy Package consisted of a total of 8 revisions of 4 Directives and 3 Regulations, one new Regulation, a new work plan for Ecodesign and energy labelling for the period 2014-2019 and two communications. The revision of the three Directives was completed in 2018; the Energy Performance of Buildings Directive (EPBD), the Energy Efficiency Directive (EED) and the Renewable Energy Directive (RES). The Regulation on the Governance of the Energy Union was published in 2018 as well. In 2019, the Clean Energy Package was completed with the publication of a Directive and Regulations on the design of the electricity market.
Figure 1: Schematic interpretation of the European climate policy framework
Below a short overview of the guidelines and regulations:
Energy Performance of Buildings Directive (EPBD)
The first Directive to be adopted is the Energy Performance of Buildings Directive (EPBD). This Directive specifies the objective and the policy measures for member states to achieve a European nearly zero-energy (NZEB) building stock by 2050. Buildings produce greenhouse gas emissions through the energy needed for heating and cooling. To tackle this it was agreed that it was necessary to ensure that new buildings (about 2% in Belgium) should emit as few emissions as possible and that the emissions from the existing building stock should be minimised as much as possible.
The EPBD therefore obliges Member States to develop a number of policy instruments; minimum requirements for new buildings and major energy renovations (EPB/PEB) and an energy performance certificate (EPC/ la certification PEB/ the EPB certificate) and a long-term renovation strategy for existing buildings. The revision of 2018 also included a number of measures to raise awareness of the benefits of smart technology, such as a task for the European Commission to design a Smart Readiness Indicator (SRI). The Directive (EU) 2018/844 that was published in 2018 complements the old Directive (EU) 2010/31; this means that both Directives need to be considered for a complete picture of the requirements.
For more information about the changes in the revised EPBD, click here.
Energy Efficiency Directive (EED)
The second Directive adopted was the Energy Efficiency Directive (EED). This Directive sets out what may and may not be taken into account in the realisation of the energy efficiency target per member state. This can concern, for example, the optimisation of the production processes of the non-energy intensive industry and the renovation of the building stock. The Directive also includes general measures for Member States to implement. Examples include the roll-out of smart meters and minimum energy billing information requirements to raise end customers' awareness of energy consumption. The Directive also specifies requirements on the renovation of public buildings.
The energy efficiency target and accountability for each member state are laid down in the National Energy and Climate Plan (NECP). This plan replaces the National Energy Efficiency Action Plan (NEEAP), which previously required Member States to account for their activities every 3 years. The Directive also specifies the default value for the Primary Energy Factor (PEF). It is used in several policy schemes, such as EPB, to account for the emissions that are caused by the generation of energy. Directive (EU) 2018/2002, published in 2018, is an addition to the old Directive (EU) 2012/27; this means that in order to have a complete picture of the requirements, both Directives must be taken into account.
For more information on the Energy Efficiency Directive (EED), click here.
Governance of the Energy Union and the Climate Action (Governance)
The Regulation on Governance of the Energy Union (EU) 2018/1999 was adopted third in 2018. This is a 'new' Regulation with the aim of simplifying and stabilising the reporting requirements from the climate and energy policies. Before this Regulation the requirements differed from one Directive to another, which made it more difficult to monitor the efforts made. The new Regulation contains obligations for both the member states and the European Commission, such as the annual emission inventories required under the agreements with the United Nations. Each member state is also asked to draft a 10-year National Energy and Climate Plan (NECP) with the aim of creating a more stable investment climate.
In the National Energy and Climate Plan, member states must indicate what they are going to do to achieve the climate targets over a 10-year period. This requires both a description of the proposed policy measures and a calculated estimate. Specifically for Belgium, it means the drafting of 5 plans; one for each region, a federal plan and then integration into one Belgian plan. Last June, the European Commission delivered its recommendations on the initial draft version of Belgium's plan for the period 2021-2030. Belgium is currently working to deliver the final version of the plan to the European Commission before the end of the year.
For more information on the content of the Governance Regulation, click here.
Renewable Energy Directive (RES)
The last Directive adopted in 2018 was the Renewable Energy Directive (EU) 2018/2001 (RES). Unlike the EPBD and the EED, this revision completely replaces the old Directive (EU) 2009/28 by the 1st of July 2021. The aim of the Directive is to ensure that renewable energy is used instead of fossil fuels for the production of the energy needed in Europe. This translates into a minimum target per member state for the share of total European energy supply to be generated on a renewable basis. These objectives are laid down in the National Energy and Climate Plans (NECPs). The Directive itself lays down the ground rules for what is allowed to be counted as renewable energy.
The Directive includes general rules of the game and per sector. It contains for example sector-based conditions, such as for heating and cooling of buildings and fuel consumption for transportation. There are also requirements for the use of agricultural crops for biofuels in order to prevent inefficient land use (and thus less CO2 uptake). The Directive specifies how (financial) support may be provided to member states' initiatives to support renewable energy projects. Finally, there are a number of rules to ensure that end customers can organise their energy supply separately from the existing network as 'renewable self consumers' or 'renewable energy communities'.
Electricity market design (Electricity, Risk Preparedness and ACER)
In 2019, the last Directive and Regulations under the Clean Energy Package were aimed at the proper functioning of the electricity market. This means ensuring sufficient availability and affordability of energy and making it interesting for investment. The package consists of one Directive and three Regulations:
- The Energy Market Directive (EU) 2019/944, which sets the ground rules for the internal energy market. These should, among others, ensure adequate interconnectivity and security of supply.
- The Energy Market Regulation (EU) 2019/943, which describes the basic principles for the proper functioning of the energy market.
- The Risk Preparedness Regulation (EU) 2019/941, which requires member states to draw up a plan of action in the event of energy supply problems (energy crises).
- The ACER Regulation (EU) 2019/942, which gives the European Agency for the Cooperation of Energy Regulators (ACER) the right to exist. This body was set up to support the proper functioning of the electricity market.
Together the Directive and Regulations should ensure that the end customer is able to play an active role in the energy transition, that there is sufficient flexibility in the energy supply and that vulnerable end customers are protected against (unintended) price increases. The new Directives and Regulation were published in June 2019.
For more information on the Directive and Regulations for the electricity market, click here.
Communications and work programmes
In addition to the revision of the Directives and Regulations, the European Commission has also drawn up an Ecodesign work plan and two communications in light of the Clean Energy Package:
The Ecodesign work plan 2016-2019
The Ecodesign work plan includes an overview of all planned reviews and new work items within the Ecodesign and energy labelling regulations. These were, for example, the revisions for lighting, local heating, space heating and air conditioners for building technology. In terms of new work items study work was started to explore the possibilities for regulations for solar panels, building automation and control systems and smart appliances, among others. The European Commission is currently working on the Work Programme for 2019-2024.
For more information about the expected developments in Ecodesign and energy labelling, click here.
Communication on Smart financing for Smart Buildings
The European Commission drafted a communication 'Smart Financing for Smart Buildings' to improve the use of European subsidies to increase the impact of the money invested. In support of this initiative, part of the budget for the European subsidy ELENA for the energy renovation of buildings was allocated in 2017.
Communication on Accelerating Clean Energy Innovation
A second communication 'Accelerating Clean Energy Innovation' was drafted by the European Commission in order to speed up the introduction of 'clean energy solutions' to the market. These include, for example, solutions for energy storage and energy-efficient building technology.
Regulation of other sectors
In addition to the technology industry and buildings, three other sectors are responsible for a significant proportion of greenhouse gas emissions: transport, agriculture and waste. For these sectors, regulations were not specifically revised under the Clean Energy Package. However, the climate objectives were a topic of discussion within the development of regulations for these sectors. For example, the new Regulation (EU) 2019/631 on drawing up CO2 emissions performance standards for passenger cars was published in April 2019. For agriculture, adaptation policy and the Common Agriculture Policy (CAP) were worked on. In general, the Regulation on land use, land use change and forestry (EU) 2018/841 (LULUCF) was also adopted in May 2018. It aims to optimise the use of trees and plants for the absorption of greenhouse gases through encouragement of an optimal use of space. To address the waste sector, a circular economy package was adopted with the aim of increasing the reuse of materials and products in order to reduce the amount of (residual) waste.
The next step: the European Green Deal
With the completion of the term of the Juncker Commission on November 30th, the Clean Energy Package has also been finalised. The answer to the Clean Energy Package of the new European Commission Von der Leyen, which started its term on the 1st of December, is called the European Green Deal. This deal should provide the framework for achieving the climate target for 2030, a climate-neutral Europe by 2050 and the necessary energy transition. It will include a better matching of the available technological and financial resources in line with the objectives and a broader perspective than the Clean Energy Package; circular economics, digitisation and mobility will also be addressed within the deal. In addition, it is expected that opportunities will be explored with regard to taxation of, for example, CO2 and to further expand the use of hydrogen. The aim is to further improve technological opportunities, cooperation between different policy areas and consistency in climate regulations such as the EPBD, EED, Ecodesign and energy labelling through the deal.