Strengthening EU Environmental Law

Strengthening EU Environmental Law Presented by: Mr. Schomerus Date: 13 June 2024 Contents - - Fundamentals of Energy Efficiency and Energy Saving • Energy Efficiency - the First Fuel • Targets, Strategies and Instruments EU law Energy transition faces numerous challenges. - Energy Transition • Nuclear Phase-Out • Final Disposal of Nuclear Waste • Coal Phase- Out • European Dimension • Climate Change • Renewable Energies • Grid Extension • Energy Efficiency & Saving • Hydrogen • Sector Coupling • Social Balance • Co-ordination • of Energy Transition • Monitoring of Energy Transition • Energy Research • E-Mobility • Geo-Strategic Challenges (New Wars) Energy efficiency and energy saving form the 'first fuel': what is not consumed need not be generated. - EU: 'Energy Efficiency First' as a guiding principle • Energy Efficiency Directive (EU) 2023/1791, Recital (18) The energy efficiency first principle implies adopting a holistic approach, which takes into account the overall efficiency of the integrated energy system, security of supply and cost effectiveness and promotes the most efficient solutions for climate neutrality across the whole value chain, from energy production, network transport to final energy consumption, so that efficiencies are achieved in both primary energy consumption and final energy consumption. That approach should look at the system performance and dynamic use of energy, where demand- side resources and system flexibility are considered to be energy efficiency solutions. - Economic effects, i.e. Reducing energy bills for customers or creating new jobs in industry & energy services - Energy security, i.e. Lowering dependency on energy imports - Fewer investments, i.e. In energy infrastructure - Environmental effects - i.e. Improving air quality - Last but not least: reducing greenhouse gas emissions What does energy efficiency involve? - Energy efficiency. Input-output ratio - Energy savings: an amount of saved energy • Should be understood as any reduction of energy use • Simple decoupling effects not sufficient • Overall energy system efficiency, i.e. Shifting energy consumption to times when energy generation is greater than the demand • Net energy: regarding i.e. Trade-off between energy embodied in housing insulation and operational energy used for heating over the product's life cycle - Energy Efficiency Directive (EU) 2023/1791, Art. 2 • (8) 'energy efficiency' means the ratio of output of performance, service, goods or energy to input of energy • (9) 'energy savings' means an amount of saved energy determined by measuring or estimating consumption, or both,, before and after the implementation of an energy efficiency improvement measure, whilst ensuring normalization for external conditions that affect energy consumption; In the EU, ca. 50% of energy consumed is used for heating or cooling; over 70% comes from fossil fuels (mostly natural gas). - Energy intensity has improved over the last years. • Energy intensity. Energy efficiency of a country's economy, showing the amount of energy needed to produce a unit of GDP • - - Reasons for improvements reasons for improvements • Shift from industry to services • Fewer energy-intensive activities • Closure of inefficient units • More energy-efficient appliances High economic potential of energy-efficiency measures • Benefits outweigh costs • Of energy-efficiency measures Targets, Strategies and Instruments - Targets • Previous: 1128 Mtoe for primary energy and 846 Mtoe for final energy • Currently: 992,5 Mtoe for primary energy and 763 Mtoe for final energy (Art. 4 EED) • Relative, no absolute reduction targets • Specific public sector targets: total final energy consumption reduced by at least 1,9% each year, compared to 2021 (Art. 5 EED) • Member States: cumulative end-use energy savings (Art. 8 EED) - Cost-benefit analysis: benefits of energy savings must outweigh costs associated with renovations etc. - REPowerEU: energy efficiency one of the most effective and sustainable ways to discontinue reliance on Russian fossil fuel imports - Energy Efficiency Directive (EU) 2023/1791, Art. 4 • 1. Member States shall collectively ensure a reduction of energy consumption of at least 11,7% in 2030 compared to the projections of the 2020 EU Reference Scenario so that the Union's final energy consumption amounts to no more than 763 Mtoe. Member States shall make efforts to collectively contribute to the indicative Union primary energy consumption target amounting to no more than 992,5 Mtoe in 2030. Setting of energy efficiency targets needs science, politics and law - targets set by law. • - i.e. through EED political targets • i.e. through EU Green Deal or „Fit for 55" • i.e. Sustainable Development Goals (SDGs), No 7 'Ensure access to affordable, reliable, sustainable and modern energy for all' - targets demanded by science • i.e. planetary boundaries Relative Targets VS. Absolute Targets - Relative targets • (Relative) efficiency targets • Decoupling resource consumption from economic growth • E.g. Savings compared to a trend scenario • Example: European Energy Efficiency Action Plan from 2006: 20% reduction in energy consumption by 2020 compared to the reference scenario = reduction of almost 12% below the 2005 level - Absolute targets • (Absolute) consumption targets • Real reduction in energy consumption • E.g. Savings compared to a reference point in time • Example: national consumption target - reduction of net electricity consumption to 500 TWH by 2020 Excursus: Sustainability Instruments - „Soft" Governance Approaches • Governance Via Targets & Procedures • „Better Regulation" • „Self Regulation" • „Responsive Law" • „Deregulation"  Organization o CSR  Information  Voluntary agreements - „Hard" Governance Approaches • Governance Via Command & Control  Indirect Behavior Control o Economic Instruments ❖ Quantity Management ▪ Price Management ❖ Price Management ▪ Taxes/Subsidies  Direct Behavior Control The Rebound Effect Can Undo The Successes Achieved Through Energy Efficiency - Jevon's paradox: efficiency causally increases the consumption of a more efficiently used resource - Improved technology doubles the amount of Work produced with a given amount of Fuel - Demand for Fuel rises - Reinhard Madlener, E.ON Energy Research Center, RWTH Aachen: „Economic growth is a contributor to rising resource consumption. If individual resources can be used more productively, they become more attractive in relative terms, which further boosts their demand. An absolute decoupling between economic growth and energy consumption, i.e. increasing economic output with decreasing resource consumption, hardly ever takes place, even in prosperous industrialized countries." (et 2012) The rebound effect is of particular importance for energy consumption - Proportion of energy saved at the technical level that is offset by the increase in demand • Direct rebound effect  Increased demand for the energy service whose efficiency has been improved • Indirect rebound effect  If the income freed up by the savings is income spent for other energy services • Long-term macroeconomic rebound effect (increase in demand due to macroeconomic efficiency gains) of 50- 100%  over 100%: backfire effect Increases in efficiency can also lead to relocation effects. - Problem: instruments aimed at sustainability in one area trigger unplanned displacement effects in other areas - Possible manifestations • Temporal shifting of sustainability problems: shifting to future generations • Sectoral relocation effects  Example: switch to electromobility leads to problems with regard to resource conservation for priority metals • Resource-related relocation effects  Example: saving fossil fuels by switching to renewable energies leads to landscape consumption by wind turbines • Spatial relocation effects  Example: increase in raw material productivity at home is at least partially bought by importing products manufactured abroad