EUROPEAN COMMISSION TO PROPOSE BINDING ENERGY EFFICIENCY

UNCLAS BRUSSELS 001391

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON EIND ENRG EWWT KGHG SENV TRGY
SUBJECT: EUROPEAN COMMISSION TO PROPOSE BINDING ENERGY EFFICIENCY
TARGETS ON MEMBER STATES


1. (SBU) Summary. The European Commission plans to propose binding
energy efficiency targets for all EU Member States, according to a
draft Communication outlining recommendations for improving Europe's
energy efficiency. The Commission argues that the EU can only
reduce energy consumption by 11% from projections by 2020, far short
of the 20% indicative target agreed as part of the EU's Climate and
Energy Legislative Package and one component of the EU's "20-20-20
in 2020" goals. The draft Communication also includes six other
measures the Commission believes essential to meeting Europe's
energy efficiency targets. The Commission is selling these seven
measures as a way to create two million new jobs in the EU. The
draft provided no timetable. End Summary.


2. (SBU) The European Commission is drafting a Communication to the
EU Council and Parliament outlining its vision for how the EU can
reach its goal to reduce energy consumption by 20% from projections
by 2020. According to the Commission, the EU currently is on track
to reduce energy consumption by only 8.5% based on provisions in the
Climate and Energy Package, which details the EU's Emissions Trading
Scheme (ETS),emissions reductions in all sectors not covered by
ETS, renewable energy, and CO2 emissions from cars. Taking into
account additional measures to be adopted, the reduction will still
only amount to 11%. The projections for 2020, according to the
Commission, indicate that the EU's energy consumption is now
forecast to stabilize out to 2020, even though GDP is expected to
rise by 28% from 2005 levels.


3. (SBU) The Commission argues that in order to meet the 20%
indicative target, the EU must complement the existing framework
with a binding target, much as it has done with emissions reduction
and renewable energy use targets. The Commission plans to propose a
directive imposing binding energy efficiency targets for all EU
Member States, noting that this proposal will be designed in a
manner compatible with the existing legislation. However, no
timetable is included, and there appears to be no clear decision on
how to structure such a proposal.


4. (SBU) In addition to the binding energy efficiency target
proposal, the draft also outlines six other measures necessary to
meet its goals. The most detailed of the proposals calls for
refurbishing 15 million buildings by 2020, an effort the Commission
believes can reduce the EU's final energy consumption by 11% by

2020. Second, the Commission also plans to develop policies for
Member States to impose binding obligations on utilities to invest
in energy efficiency. The Commission also calls for policies to
improve energy efficiency in urban areas, "using the full potentials
of Small and Medium Enterprises (SMEs)," and improving energy
efficiency awareness by European citizens. Finally, the Commission
argues that international cooperation is critical for improving
energy efficiency measures, though it argues that harmonization at a
global level is difficult because of the diverging legislative
approach among the EU, Japan, and the United States.


5. (SBU) Comment. As there is no clear timetable for any of the
proposals, a fact noted by several NGOs, it remains unclear how
successful the Commission will be in implementing these provisions,
most notably the call for binding energy efficiency targets in
Member States. In the current global economic climate, several
Member States are not receptive to additional financial burdens in
the name of climate change. Several EU officials explained that it
would have been nearly impossible to pass the Climate and Energy
Package if it was up for debate in 2009, as opposed to 2008, given
the economic situation. However, these proposals provide an
additional opportunity for transatlantic cooperation, as several
Commission officials would like to work more closely with the United
States, noting that the proposed U.S.-EU Energy Council provides an
ideal forum for such cooperation. End comment.

MURRAY