Legal Perspectives on Greening Europe

Legal Perspectives on Greening Europe Presented by: Mr. Schomerus Date: 20 June 2024 Contents - The German „Heating Act" as an Example for Political - Confrontation - Conclusions Article 194 TFEU describes the goals of EU-energy policy, including the promotion of energy efficiency and energy saving - EED based on Art. 194(2) TFEU - Again - • Energy efficiency: relative energy saving due to decoupling-effects • Energy saving: an absolute reduction of energy usage Sustainability (Art. 3(3) TEU & 11 TFEU means energy saving should have priority over energy efficiency - - Energy efficiency & saving: • Require EU-legislation • Do not fall under Art. 194(2) 2 TFEU Art. 194 TFEU • 1. In the context of the establishment and functioning of the internal market and with regard for the need to preserve and improve the environment, Union policy on energy shall aim, in a spirit of solidarity between Member States, to: (c) promote energy efficiency and energy saving and the development of new and renewable forms of energy; and 2. ...the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall establish the measures necessary to achieve the objectives in paragraph 1..... Such measures shall not affect a Member State's right to determine the conditions for exploiting its energy resources, its choice between different energy sources and the general structure of its energy supply, without prejudice to Article 192(2)(c). Overarching EU Energy Efficiency and Energy Saving Law - The revised Energy Efficiency Directive (EED) (EU/2023/1791) - Art. 5 EED: public sector leading on energy efficiency • Member States shall ensure that the total final energy consumption of all public bodies combined is reduced by at least 1,9% each year, when compared to 2021. - Art. 6: exemplary role of public bodies' buildings • ... each Member State shall ensure that at least 3% of the total floor area of heated and/or cooled buildings that are owned by public bodies is renovated each year to be transformed into at least nearly zero-energy buildings or zeroemission buildings... - Art. 7: public procurement • Member States shall ensure that contracting authorities and contracting entities, when concluding public contracts and concessions with a value equal to or greater than the thresholds laid down in ...purchase only products, services buildings and works with high energy-efficiency performance unless it is not technically feasible. - Art. 1 EED • 1....This Directive lays down rules designed to implement energy efficiency as a priority across all sectors, remove barriers in the energy market and overcome market failures that impede efficiency in the supply, transmission, storage and use of energy. It also provides for the establishment of indicative national energy efficiency contributions for 2030. • This Directive contributes to the implementation of the energy efficiency first principle, thus also contributing to the Union being an inclusive, fair and prosperous society with a modern, resource-efficient and competitive economy. • 2. The requirements laid down in this Directive are minimum requirements and shall not prevent any Member State from maintaining or introducing more stringent measures.... Further EED-instrument aim at improving energy efficiency. - energy obligation scheme • implementing Art. 8 EED targets (i.e. new annual savings of at least 1.3% in 2024-2025) • energy saving obligations imposed on energy • distributors and/or retail energy sales companies, • possibly coupled with a trading system • 2019: 16 schemes in EU Member States • however: alternative policy measures possible (Art. 10 EED) - energy management systems and energy audits (Art. 11 EED) - metering, i.e. smart meters (Art. 13 et seqq. EED) - billing information (Art. 17 et seqq. EED) - consumer information & empowerment (Art. 21 et seqq. EED) - national energy efficiency fund, financing and technical support (Art. 30 EED) - Art. 9 EED • 1. Where Member States decide to fulfil their obligations to achieve the amount of savings required under Article 8(1) by way of an energy efficiency obligation scheme, they shall ensure that the obligated parties referred to in paragraph 3 of this Article operating in each Member State's territory achieve, without prejudice to Article 8(8) and (9), their cumulative end- use energy savings requirement as set out in Article 8(1). From the Eco-design Directive to the new Eco-design Regulation - opening up new opportunities for sustainable products, far beyond energy efficiency - products regulated by Commission Regulations under the current Directive, i.e. • Directive, i.e. • lighting Products. • electronic Displays. • refrigerators. • washing Machines and Dishwashers. • wir Conditioners and Comfort Fans. • electrical Motors. • welding Equipment. • windows On May 27th 2024, the European Council gave the final green light to the Regulation on Eco-design of Sustainable Products (ESPR) - What's new? • The legal form of the regulation: According to Art. 288(2) TFEU, "the regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States." Under the Ecodesign Directive, the concrete product requirements are set by means of implementing measures. As with delegated acts under Art. 290 TFEU, this is the responsibility of the Commission. The Directive therefore already leaves little room for maneuver to the Member States. In this respect, the choice of the legal form of the regulation appears conclusive. • Extension of the scope to almost all products (physical goods): the previous restriction to energy-related products in Art. 1 (1) Eco design Directive is abandoned. According to a preliminary assessment by the Commission, "product categories such as textiles, furniture, mattresses, tires, detergents, paints, lubricants, as well as intermediate products such as iron, steel and aluminum" are eligible for a first working plan. • Concretization of the eco design requirements, which will be regulated in more detail in delegated acts of the Commission: in this respect, the durability and reliability of products, reusability, retrofit ability, repairability, maintenance and overhaul, energy and resource efficiency, recycled content, presence of substances of concern, remanufacturing and recycling, reduction of carbon footprint and environmental footprint, and waste materials are mentioned. In particular, reparability is a mandatory aspect under the draft, unlike under the existing directive. • Introduction of the digital product passport. Eco-design requirements are necessary for sustainable product development and sustainable development - Eco-design is embedded in various EU initiatives regarding sustainable products. - The EU is in charge - measures at national level only are not sufficient. - In the global market, the EU is only one player - an international level - playing field for sustainable products - must be aimed for. - Consumers play a decisive role; consumer information and awareness and, last but not least, change of behavior, will enhance demand for sustainable products. Energy Efficient Buildings Form A Core Element Of Energy Transition - revised Energy Performance of Buildings Directive (EPBD) (EU/2024/1275), aims at i.e. • binding target to decrease average energy performance of national residential building stock by 16% by 2030 in comparison to 2020, ... • enhanced standard for new buildings to be zero- emission • National Building Renovation Plans (Art. 3 EPBD) • improved Energy Performance Certificates (Art. 19 EPBD) • building renovation passports (Art. 12 EPBD) • solar technologies on all new buildings (Art. 10 EPBD) • one-stop-shops for energy renovations (Art. 18 EPBD) • roll-out of recharging points for electric vehicles - around 40% of energy consumed in the EU is used in buildings - over 1/3 of the EU's energy- related GHG emissions come from buildings - +/- 80% of energy used in EU homes is for heating. cooling and hot water - Art. 1 EPBD • 1. This Directive promotes the improvement of the energy performance of buildings and the reduction of greenhouse gas emissions from buildings within the Union, with a view to achieving a zero-emission building stock by 2050, taking into account the outdoor climatic conditions, the local conditions, the requirements for indoor environmental quality, and cost-effectiveness. The EPBD aims at zero-emission buildings. - new buildings (Art. 7 EBPD) • zero-emission buildings from 1 Jan. 2028 (public buildings) and 1 Jan. 2030 all new buildings - existing buildings (Art. 8 EPBD): • - minimum energy performance requirements when renovation Art. 2 EPBD • (2) 'zero-emission building' means a building with a very high energy performance, as determined in accordance with Annex I, requiring zero or a very low amount of energy, producing zero on-site carbon emissions from fossil fuels and producing zero or a very low amount of operational greenhouse gas emissions, in accordance with Article 11; • (3) 'nearly zero-energy building' means a building with a very high energy performance,... where the nearly zero or very low amount of energy required is covered to a very significant extent by energy from renewable sources, including energy from renewable sources produced on-site or energy from renewable sources produced nearby; - Art. 11 EPBD • 1. A zero-emission building shall not cause any on-site carbon emissions from fossil fuels. A zero-emission building shall, where economically and technically feasible, offer the capacity to react to external signals and adapt its energy use, generation or storage. The core problem is the required replacement of fossil-fuel heating’s - - heating systems in Germany • natural gas: 48% • oil: 26% • few renewables such as pellets existing heating installations • operator obligations, i.e. maintenance • mandatory replacement  i.e. installations older than 30 years  2044: end of fossil fuel installations - - new heating installations • from 1 Jan. 2024: at least 65% renewables • various exceptions, i.e. district heating however: political uproar • bad communication • press campaign • political propaganda against "green" law The GEG is supplemented by the Heat Planning Act (Wärmeplanungsgesetz - WPG). - mandatory comprehensive heat planning for all 11,000 municipalities • obligations under the GEG only once heat planning is available • municipalities with over 100,000 inhabitants: by June 30, 2026, others by June 2028 • heat transition requires new technologies such as seasonal heat storage, large heat pumps [and power-to-heat - Section 1 WPG • The aim of this Act is to make a significant contribution to converting the generation and supply of space heating, hot water and process heat of space heating, hot water and process heat to renewable energies, unavoidable waste heat or a combination thereof unavoidable waste heat or a combination thereof, to achieve a cost-efficient, sustainable, economical, affordable, resilient and greenhouse gas- neutral heat supply by 2045 (target year) at the latest and to achieve final energy savings... Are energy efficiency and energy saving possible through law? An attempt at an answer - There is no alternative to energy efficiency and energy saving. - The German example of the Heating Act shows that the implementation of energy efficiency requirements requires clear, comprehensible regulations and good political communication. Without acceptance, there is no energy efficiency, no energy saving! - Rebound and displacement effects cannot be completely prevented. - There is no such thing as the ideal instrument. • Smart, innovative, creative and hybrid instruments are required. • Volume control approaches such as cap & trade are superior to traditional regulatory law. • Self-regulation can be useful in certain cases, e.g. as a flanking measure. • Traditional regulatory law easily leads to rebound and displacement effects. In some areas (nuclear or coal-fired power plants, certain luxury goods), however, total bans may make sense. - The best solution, also in terms of avoiding rebound and displacement effects, would be a primary energy ETS.