Commission raises ambition on energy efficiency and renewables - but what will its ‘market-based approach’ cost to citizens?

Brussels, 14 July 2021 – Today, the EU Commission released its ‘Fit for 55%’ legislative package, which aims to bring EU legislation into line with the EU’s increased climate ambition of achieving a 55 percent cut in greenhouse gas emissions by 2030. This legislative package includes significant changes to both the Energy Efficiency Directive and the Renewables Directive, the latter of which now acknowledges and supports renewable energy communities.

Notably, changes to both Directives signal the EU Commission’s growing acknowledgement that energy communities can play different roles across the energy system. Revisions to the Renewables Directive include provisions that ask Member States to meet a 49% of their national renewables target through the buildings sector. Among other things, Member States would be required to introduce measures to support the development of renewable energy communities to support the delivery of this objective.

Proposed revisions to the Energy Efficiency Directive represent the Commission’s acknowledgement that energy communities can also help Member States achieve their energy efficiency objectives, not just with renewable energy. Specifically, in their alternative policy measures for achieving energy savings obligations, Member States would be required to promote the role of energy communities.

Unfortunately, these and other proposals aimed at raising climate ambition are somewhat overshadowed by the price tag that comes along with them: the further encroachment of the EU Emissions Trading Scheme (ETS), a market-based approach to fighting climate change, into the heart of societies - namely the buildings and transport sectors. These changes could see energy poverty rise significantly, with one report estimating that energy bills could increase by as much as €429 per year. This would put Europe’s middle class at the whims of an unforgiving market instrument. The Commission has also proposed the creation of a Climate Action Social Facility to ring fence 25% of ETS revenues to help those facing energy poverty. However, such an approach is likely to be insufficient to address the negative impacts integrating the ETS into buildings and transport will create.

Dirk Vansintjan, President of, the European Federation of Citizen Energy Cooperatives, had to say: “We welcome the Commission’s further acknowledgment of citizens and communities as being part of the solution to achieving a low carbon energy transition, for instance in energy savings.” Continuing, however, Mr. Vansintjan says “We are worried that the Commission’s market-based solutions to climate change are likely to alienate citizens, rather than bring them along in a ‘fair and inclusive energy transition’, which is what the Green Deal commits to.”

Now that the Commission has proposed these pieces of legislation, they will enter the co-decision process, whereby the European Parliament and the Council will negotiate in parallel but separate processes on their own revisions to the texts.

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