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Energy
News announcement18 December 2023Directorate-General for Energy

Commission publishes recommendation on energy efficiency financing under new Directive

A new Commission Recommendation on financing measures for energy efficiency has been published by the European Commission today, as required under Article 30 of the new Energy Efficiency Directive (EU) 2023/1791 (EED recast), which recently entered into force. The recommendation relates to how best to use national energy efficiency funds, financial and technical support, with the objective to support Member States with the transposition and implementation of this article, which sets out key provisions to facilitate investments in energy efficiency. Today’s text explains the amended requirements and illustrates how the objectives of the new Directive could be achieved as regards financing. The aim is to contribute to a uniform understanding of the legislation across Member States as they prepare their transposition measures.

As public finance alone (including funds from the EU budget) will not be sufficient to meet the required investment needs to achieve the new 2030 energy efficiency goals, the majority of financial support will need to come from the private sector. Therefore, Article 30 strengthens the legal and policy framework for energy efficiency financing, with the aim of increasing the cost-effectiveness of public budget support and attracting more private investment.

Article 30 EED thus incentivises the need to deploy adequate financial and technical support for energy efficiency measures, develop targeted policy measures enabling the mobilisation of private investments in energy efficiency, and promote innovative financing mechanisms and private financial products for energy efficiency. Moreover, it places an emphasis on the cooperation between the European Commission, Member States and financial institutions. In this framework, the Commission is proceeding with the launch of a European Energy Efficiency Financing Coalition.

Next steps

To support the transposition and implementation of the EED recast, the Commission will adopt additional Recommendations on the key articles of the Directive in the course of the first quarter of 2024. Member States are required to transpose the different provisions of the Directive by 11 October 2025.

Background

The Directive (EU) 2023/1791 on energy efficiency (‘EED recast’) raises the level of ambition for 2030 in terms of energy efficiency, by establishing a new, binding target for reducing EU energy consumptions by 11.7% by 2030 relative to forecast energy consumption for 2030 (as forecast in 2020).

Increasing investments in energy efficiency via dedicated policy and financing measures is fundamental to supporting Member States in delivering on the 2030 energy efficiency targets and on the energy savings pillar of the REPowerEU Plan. Supporting the mobilisation of investment in energy efficiency will enable the EU to achieve climate-neutrality by 2050 in a cost-efficient way, while ensuring the competitiveness and sustainability of the EU economy, as well as strengthening EU security of supply and enhancing energy market resilience.

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Publication date
18 December 2023
Author
Directorate-General for Energy