I.3 The EU energy savings target for 2020 and beyond
(Articles 1 and 3 and Recital 2)

Public building renovations in relation to the EED map

Guidebook Overview Map: EU 2020 & beyond

Background

Measures put in place for implementing the specific EED requirements must, in addition to fulfilling the specific minimum legal requirements for those measures, ensure in their totality that objectives and targets are achieved.

Targets in EU policies and legislation play an important role in:

  • Creating high level accountability;
  • Allowing benchmarking and monitoring of results;
  • Sending long-term signals to investors; and
  • Providing guidance for further policymaking.

The EED contains several targets and sets for the first time in its Article 7 a binding energy end-use savings target for MSs. This complements the EU's climate and energy package, which so far only includes legally binding greenhouse gas (GHG) and renewable energy (RES) targets, and goes beyond the 2006 Energy Services Directive (2006/32/EC)*.

The EED's three main cross sectoral targets*are:

  1. The 20% EU energy savings target. The EED's overarching objective (Article 1.1) is “to ensure the achievement of the Union's 2020 20% headline target on energy efficiency and to pave the way for further energy efficiency improvements beyond that date”. The 20% target is defined in Article 3.1(a) as a maximum of 1483 Mtoe primary energy or 1086 Mtoe final energy consumption in 2020*.
  2. The indicative national efficiency targets. In terms of making this operational, the EED stipulates that MSs must set their own overall indicative national energy efficiency targets, which the Commission will assess as sufficient or not to reach the EU target and thereafter consider proposing a binding target (Article 24.7).
  3. The national binding target for end-use savings. Article 7 sets a general binding target to deliver 1.5% cumulative annual energy end-use savings.

Efficiency, savings, consumption targets?

Different terms are used, often with little precision or accuracy, to express targets in the area of energy efficiency policy. The Coalition adheres to the definitions provided in the EED, which establish a clear relation between ‘energy savings’ and ‘energy efficiency’. Specifically, energy savings are defined as the result of improvements of energy efficiency. Savings are measured as the difference in energy consumption before and after the efficiency improvement has taken place, taking into account the impact of external factors such as weather or level of economic activity. Using these definitions, the Coalition calls for a binding energy savings target, as an absolute amount of energy saved, to be achieved principally through efficiency improvements that will result in a reduction of energy consumption compared to a baseline.

As these targets are closely linked, MSs will have to account for their interaction and ensure that the measurement and verification methods used for the different targets are coherent and compatible with one another as much as possible. In addition, the setting of the indicative national target must be framed so that the MS makes its full, proportional contribution to the overall EU goal for 2020. The setting of the binding element required by Article 7 can cover a significant percentage of the volume of savings that the indicative national target must deliver.

Important definitions

The following definitions from Article 2 of the EED are worth recalling here as they are relevant to this section of the Guide:

‘Primary energy consumption’ means gross inland consumption, excluding non-energy uses (Article 2.2).

‘Final energy consumption’ means all energy supplied to industry, transport, households, services and agriculture. It excludes deliveries to the energy transformation sector and the energy industries themselves (Article 2.3).

‘Energy efficiency’ means the ratio of output of performance, service, goods or energy to input of energy (Article 2.4).

‘Energy savings’ means an amount of saved energy determined by measuring and/or estimating consumption before and after implementation of an energy efficiency improvement measure, whilst ensuring normalisation for external conditions that affect energy consumption (Article 2.5).

The EU energy savings target for 2020 is set in the broader context of a long-term decarbonisation strategy: the EU has committed to an 80-95% reduction of GHG emissions by 2050, and various projections have shown that energy savings have the potential to deliver the lion's share of this reduction*. EED Article 1.1 explicitly states that the measures of this directive should pave the way for further energy efficiency improvements beyond 2020.

The 20% target is defined in EED Article 3.1 as a maximum of 1483 Mtoe primary energy or 1086 Mtoe final energy consumption in 2020 and according to Article 1, its achievement is the objective of the framework of measures established by the Directive.

The derivation of this figure is explained in Council Directive 2013/12/EU* as saving 20% primary energy (370 Mtoe) compared to the 2020 projections (1853 Mtoe) made in 2007, when the target was adopted by the EU heads of state and governments. The result of these savings is a maximum primary energy consumption of 1483 Mtoe in 2020.

EU 20% energy savings target

Figure 5 – Illustration of the EU target definition, method and target gap before adoption of the EED (current trend)

The 20% corresponds to the economic savings potential identified based on the PRIMES 2007 model*. Derived from a projected use of energy in 2020 it includes assumptions about economic and demographic developments.

It is important to understand that the minimum requirements for the specific efficiency measures as laid down in Articles 4 to 20 will, according to available assessments, be insufficient to reach these objectives and targets. The Coalition's Energy Saving Gapometer shows that the EED minimum requirements for measures adopted in the EED will not be enough to achieve the EU energy savings target and will, in fact, leave a gap of around 94 Mtoe*.

energy savings gap of 94 mtoe

Figure 6 – Coalition for Energy Savings Gapometer showing the impact of the EED on reaching the EU energy savings target for 2020 (energycoalition.eu)*

In the EED, MSs are explicitly allowed to go beyond the minimum requirements set for specific measures (see Article 1.2), and they will have to do so, as an adequate and complete implementation of a Directive requires that its objectives and targets are met.

MSs will need other appropriate measures to make sure that the gap between the binding energy end use savings and the indicative national energy efficiency targets is closed.

This gap is illustrated in Figure 7 below, which shows how the combination of the indicative targets with their measures and the binding savings required by Article 7 must add up to the total amount of savings required by the EU target.

Illustration of the new targets introduced by the EED and their interaction with the EU target

Figure 7 – Illustration of the new targets introduced by the EED and their interaction with the EU target (i.e. target gap) and upcoming reviews