Energy efficiency helps reduce overall energy consumption and is therefore central to achieving the EU’s climate ambition, while enhancing present and future energy security and affordability. To ensure that the EU’s 2030 target of reducing greenhouse gas emissions by at least 55% (compared to 1990) can be met, the Commission has revised the Energy Efficiency Directive, together with other energy and climate rules.
The revised directive
The revised Energy Efficiency Directive, published in the Official Journal on 20 September 2023, significantly raises the EU’s ambition on energy efficiency.
It establishes ‘energy efficiency first’ as a fundamental principle of EU energy policy, giving it legal-standing for the first time. In practical terms, this means that energy efficiency must be considered by EU countries in all relevant policy and major investment decisions taken in the energy and non-energy sectors.
The 2023 revision of the directive follows a proposal for a recast directive on energy efficiency put forward by the Commission in July 2021, as part of the EU Green Deal package. The 2021 proposal was further enhanced as part of the REPowerEU plan, presented by the Commission in May 2022, aiming to decrease the EU’s dependency on fossil fuel imports from Russia.
- September 2023
The revised directive was published in the EU Official Journal.
- July 2023
Formal agreement of the revised Energy Efficiency Directive
- May 2022
The REPowerEU Plan proposing to raise the energy efficiency targets further
- July 2021
Commission proposal for a recast of the directive, part of Fit for 55 package
- December 2018
Agreement of the amending energy Efficiency Directive 2018/2002
- November 2012
Directive on Energy Efficiency 2012/27/EU
Energy consumption targets and savings obligation
The 2023 revised directive raises the EU energy efficiency target, making it binding for EU countries to collectively ensure an additional 11.7% reduction in energy consumption by 2030, compared to the 2020 reference scenario projections. As a result, overall EU energy consumption by 2030 should not exceed 992.5 million tonnes of oil equivalent (Mtoe) for primary energy and 763 Mtoe for final energy.
Under the updated rules, EU countries have agreed to help achieve the EU target by setting indicative national contributions using a combination of objective criteria which reflect national circumstances (energy intensity, GDP per capita, energy savings potential and fixed energy consumption reduction). The directive also includes an enhanced “gap-filling mechanism” that will be triggered if countries fall behind in delivering their national contributions.
EU countries annual energy savings
The revised directive more than doubles the annual energy savings obligation (Article 8) by 2028. This is one of the key policy instruments of the directive to meet the headline target and to drive energy savings in end-use sectors, such as buildings, industry and transport.
EU countries are required to achieve cumulative end-use energy savings for the entire obligation period (running from 2021 to 2030), equivalent to new annual savings of at least 0,8% of final energy consumption in 2021-2023, at least 1.3% in 2024-2025, 1.5 % in 2026-2027 and 1.9 % in 2028-2030.
Energy poverty and consumers
The revised directive also puts a stronger focus on alleviating energy poverty.
It aims at empowering consumers through stronger requirements for EU countries to raise awareness and provide information on energy efficiency.
It also emphasises the creation of one-stop shops, technical and financial advice and consumer protection via out-of-court mechanisms for the settlement of disputes.
Furthermore, it includes improved regulations to identify and remove barriers related to split incentives for energy efficiency renovations between tenants and owners or among multiple owners.
The changes introduced require EU countries to prioritise energy efficiency improvements for vulnerable customers, individuals affected by energy poverty and those living in social housing. To address any potential negative impacts, the revenue generated from the extension of the EU Emissions Trading System (ETS) to buildings and transport will be used through the Social Climate Fund.
Under the energy savings obligation, each EU country is responsible for achieving a share of its energy savings among vulnerable customers and those affected by energy poverty. The criteria for determining these targets will be defined by each country, allowing flexibility for tailored solutions based on country-specific circumstances.
Audit obligations, technical competence requirements and investments reporting
To optimise energy savings in the industrial sector, the directive expands the scope of energy audit obligations to include all those companies, regardless of their size, which are consuming energy above a certain threshold. Therefore, small and medium-sized enterprises (SMEs) would also have to carry out an energy audit, where there is significant energy saving potential. Meanwhile, the directive makes energy management systems a mandatory requirement for large industrial energy consumers to monitor and optimise their energy efficiency.
Additionally, under the revised directive, EU countries will need to ensure an appropriate level of competence for energy efficiency related professionals, aligning them with market needs and enforcing clearer and stricter requirements for the necessary competencies. This includes energy service providers, energy auditors, energy managers and installers.
The directive mandates EU countries to report on energy efficiency investments, including energy performance contracts, as part of the Governance Regulation, ensuring transparency and accountability. It also establishes project development assistance mechanisms at national, regional, and local levels to support energy efficiency investments and facilitate the attainment of the EU’s ambitious energy efficiency targets.
Heating and cooling and data centres
To ensure a fully decarbonised district heating and cooling supply by 2050, the definition of efficient district heating and cooling is revised and minimum requirements will be gradually changed to allow for a progressive integration of renewable energy and waste heat and cold in the system.
Support to new high-efficiency cogeneration units using natural gas and connected to district heating in efficient district heating and cooling systems will only be possible until 2030, whereas any other fossil fuel use will be banned for new heat generation capacities in such systems. EU countries will also have to promote local heating and cooling plans in large municipalities having populations above 45 000.
The revised directive introduces an obligation for the monitoring of the energy performance of data centres. An EU-level database will collect and publish data, which is relevant for the energy performance and water footprint of data centres with a significant energy consumption.
In 2018, the 'Clean energy for all Europeans package' introduced the amending Directive on Energy Efficiency (EU/2018/2002) to update the policy framework to 2030 and beyond. It established a binding energy efficiency target for a reduction in final energy consumption of at least 32.5% by 2030 (relative to the 2007 reference scenario), following on from the existing 20% target for 2020.
The amending directive also included an extension of the energy savings obligation in end use, introduced in the 2012 directive. Under the amending directive, EU countries were set a target of achieving new final energy consumption savings of 0.8% each year for the 2021-2030 period, except Cyprus and Malta, whose annual target was 0.24% instead.
Under the Governance Regulation 2018/1999, EU countries are required to draw up integrated 10-year national energy and climate plans (NECPs), outlining how they intend to meet energy efficiency and other targets for 2030.
Examples of other elements introduced in the amended directive
- stronger rules on metering and billing of thermal energy by giving consumers, especially those in multi-apartment buildings with collective heating systems, clearer rights to receive more frequent and more useful information on their energy consumption, also enabling them to better understand and control their heating bills
- requiring EU countries to have in place transparent, publicly available national rules on the allocation of the cost of heating, cooling and hot water consumption in multi-apartment and multi-purpose buildings with collective systems for such services
- monitoring efficiency levels in new energy generation capacities
- updated primary energy factor (PEF) for electricity generation of 2.1 (down from the current 2.5)
- a general review of the Energy Efficiency Directive (required by 2024)
Updated measures relating to national long-term renovation strategies are now covered under the amended Energy Performance of Buildings Directive (EU)2018/844.
Directive 2012/27/EU established a set of binding measures to help the EU reach its 20% energy efficiency target by 2020. This meant that the overall EU energy consumption should be no more than 1312 million tonnes of oil equivalent (Mtoe) of primary energy or 959 Mtoe of final energy (following the UK's withdrawal). Under the directive, all EU countries were required to use energy more efficiently at all stages of the energy chain, including energy generation, transmission, distribution and end-use consumption. Both targets were overachieved in 2020, with final energy consumption reaching 907 Mtoe and primary energy consumption 1236 Mtoe. This was highly influenced by the Covid-19 pandemic.
Examples of measures to improve energy efficiency
In the context of the directive, a number of important measures were adopted throughout the EU to improve energy efficiency in Europe
- policy measures to achieve energy savings equivalent to an annual reduction of 1.5% in national energy sales
- EU countries making energy efficient renovations to at least 3% per year of buildings owned and occupied by central governments
- national long-term renovation strategies for the building stock in each EU country
- mandatory energy efficiency certificates accompanying the sale and rental of buildings
- the preparation of national energy efficiency action plans (NEEAPs) every three years
- minimum energy efficiency standards and labelling for a variety of products such as boilers, household appliances, lighting and televisions (energy label and ecodesign)
- the planned rollout of close to 200 million smart meters for electricity and 45 million for gas by 2020
- obligation schemes for energy companies to achieve yearly energy savings of 1.5% of annual sales to final consumers
- large companies conducting energy audits at least every four years
- protecting the rights of consumers to receive easy and free access to data on real-time and historical energy consumption
The European Commission published guidance notes to help EU countries fully transpose the different elements of the 2018 amending directive into national law.
Guidance notes were also published to help EU countries fully transpose the different elements of the 2012 directive into national law.
More specific good practice guidance for EU countries on the implementation of aspects of Articles 9-11 relating to collectively provided thermal energy in multi-apartment buildings has also been developed at the request of the Commission and is available at CIRCABC.
- Recommendation on transposing the energy savings obligations under the energy efficiency directive and annex (EU/2019/1658)
- Recommendation on the implementation of the new metering and billing provisions of the energy efficiency directive and annex (EU/2019/1660)
- Recommendation on the content of the comprehensive assessment of the potential for efficient heating and cooling under Article 14 of the energy efficiency directive and annex (EU/2019/1659)
- Article 5: Exemplary role of public bodies' buildings [SWD(2013) 445]
- Article 6: Purchasing by public bodies [SWD(2013) 446]
- Article 7: Energy efficiency obligation schemes [SWD(2013) 451]
- Article 8: Energy audits and energy management systems [SWD(2013) 447]
- Articles 9-11: Metering; billing information; cost of access to metering and billing information [SWD(2013) 448]
- Article 14: Promotion of efficiency in heating and cooling [SWD(2013) 449]
- Article 15: Energy transformation, transmission and distribution [SWD(2013) 450]
- News: New Energy Efficiency Directive published (20/09/2023)
- News: Energy Efficiency Directive adopted, helping make the EU ‘Fit for 55’ (25/07/2023)
- News: Commission proposes new Energy Efficiency Directive (14/07/2021)
- Energy Efficiency Directive – recast (EU/2023/1791)
- Communication – REPowerEU Plan (COM/2022/230)
- Communication – EU "Save Energy" (COM/2022/240)
- Proposal for a directive amending the Renewable Energy, Energy Performance of Buildings and Energy Efficiency directives (COM(2022) 222)
- Proposal for a directive on energy efficiency (recast) (COM(2021) 558)
- Directive (EU) 2018/2002 amending Directive 2012/27/EU on energy efficiency
- Council Directive adapting Energy Efficiency Directive 2012/27/EU by reason of the accession of the Republic of Croatia (2013/12/EU)
- Energy efficiency targets