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How the EED Proposal should be improved

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The European Commission’s proposal for a Directive on Energy Efficiency (EED) is currently going through 1st reading in the European Parliament and the Council. These last two institutions seem to be at odds on the proposal: the Parliament wants to strengthen the proposal whereas the Council seems to believe that it is too ambitious and tries to water it down.

The key question for CEMBUREAU is what is in there for the European cement industry. Actually, a lot is at stake, some of it to be welcomed, some to be feared, but always with a marked tendency to overlap existing legislation.

First, energy efficiency in buildings. CEMBUREAU, echoing the position paper of the European Construction Forum in which it is active, wishes to reiterate that action to renovate Europe’s building stock, to reduce energy use in both new and existing buildings and to improve the energy efficiency of infrastructure is a desirable goal. Buildings represent 40% of the total energy consumption in Europe and energy efficiency in buildings is the most effective way to reach the EU’s objective of 20% primary energy savings in 2020. CEMBUREAU supports the amendments proposed by ITRE Rapporteur Claude Turmes (Greens/LU) to strengthen energy efficiency in buildings on top of the EPBDi (Energy Performance in Buildings Directive 2002/91/EC) requirements but regrets that those amendments are confined to existing buildings. The opportunity to tackle also new buildings should not be missed. The use of concrete in buildings contributes to this objective as the thermal mass of concrete leads to thermal stability by avoiding diurnal and seasonal temperature variations. Concrete thus saves energy while producing a better indoor climate and environment for occupants and users.

The chapter on the proposal dealing with energy efficiency in energy intensive industries raises some concerns.

Mandatory energy audits are proposed. They may disclose remaining efficiency potentials and are a reasonable measure widely used in the cement industry. However, excessive bureaucratic requirements will not make audits more effective. Therefore, qualified in-house experts should be allowed to carry out the audits. This is already foreseen in recital 20 but should be explicitly spelled out in Article 7 of the proposal.

It may also be queried whether installations covered by existing legislation which imposes to strive toward more energy efficiency, directly or indirectly, such as the IED (Industrial Emissions Directive 2010/75/EC) and the ETDi (Emissions Trading Directive /87/EC of 13 October 2003 – OJ L 275/32, 25.10.2003) which was revised in 2009 (2009/29/EC of 23 April 2009 – OJ L 140, 5.6.2009) should not be excluded from the scope of Article 7.

Where the proposal goes wrong is when, in Article 10.8, it makes it an obligation for new and refurbished industrial installations to capture all waste heat and export such heat to district heating and cooling networks. The idea of encouraging the use of waste heat from industrial processes is positive and should be supported, but the technical solution should not be imposed. In some industries, like the cement industry, solutions other than connecting to district heating and cooling networks would be more efficient and economically viable. As now written, Article 10.8 is too prescriptive and extends beyond any economic and technical rationale. It imposes a general obligation on the basis of one particular type of situation and, if not amended, would prevent many industries to make use in their own installations of the heat they generate albeit such use is most efficient. An amendment is justifiably needed.

Rapporteur Claude Turmes certainly means well when, in amendment 85, he proposes that “the Commission shall submit proposals to align Directive 2003/87/EC, Directive 2009/89/EC, Decision 406/2009/EC as well as Directive 2010/31/EC with this Directive”. This amendment to Article 19 paragraph 5, however, goes beyond the valid goal of consistent legislation. It might conceivably open the door for the possibility to set aside EUAs in order to put pressure upon industries covered by the EU ETSi through higher CO2 prices. This would not be acceptable. For the ETS to play its role, it is of crucial importance that the regulator refrains from undue intervention with market mechanisms in order to steer the price of allowances in one direction or another. Incentives for emission reductions must, in principle, only spring from transparent and explicit political agreements on the overall cap on emissions, and not from interference with the carbon market. For 2020, the EU-ETS cap was set by the climate and energy package in 2008, and any direct or indirect means of altering this target, either temporarily or permanently, other than through a transparent legislative procedure, would reduce predictability for industry and imperil the market’s faith in the EU ETS.

Last but not least, the overall philosophy of the proposed Energy Efficiency Directive in re targeting must be questioned. When setting targets, the proposal seems to confuse energy efficiency and absolute energy savings. The focus is on energy savings rather than real energy efficiency. These are, however, two different things. The proposal should be revised with energy efficiency as the key goal and avoid seeking absolute energy savings at any cost.

The proposal aims to achieve the objectives set by the EU of achieving 20 % primary energy savings in 2020 (Presidency Conclusions of the Brussels European Council of 8-9 March 2007). The European Council (on 4 February 2011) and the European Parliament (Resolution on the Revision of the Energy Efficiency Action Plan, adopted on 15 December 2010) have urged the Commission to adopt a new ambitious strategy on energy efficiency. The Commission proposal, however, goes beyond this goal when its sets an absolute annual savings target for Member States of 1.5% per year (with no time and no volume limitations).CEMBUREAU proposes that the EED energy efficiency target be converted into a relative target aligned with the 20/20/20 target. In addition, the target should be defined through a bottom up, sectoral approach based on an in-depth analysis of existing measures such as IED and ETD rather than a top down approach.