Energy Efficiency First

The Energy Efficiency First principle ensures that energy efficiency solutions are considered in planning, policy and investment decisions in both the energy and non-energy sectors. 

Why Energy Efficiency First? 

By promoting energy efficiency, the principle emphasises not only the need to reduce fossil fuel consumption, but also the importance of reducing energy demand and, consequently, production. 

Reducing energy demand can help control the level of investment needed for the transition to clean energy. It supports a more sustainable approach to the use of limited resources and strengthens the resilience of the EU's energy system. 

Both the public and private sectors are therefore encouraged to invest in energy efficiency first, ahead of other, more complex or costly solutions to the energy transition. 

Anchored in EU legislation

While the Energy Efficiency First principle was already embedded in the Regulation on Governance of the Energy Union and Climate Action (EU/2018/1999) and in the Energy Efficiency Directive (EU/2018/2002), the recast Energy Efficiency Directive (EU/2023/1791), provides a stronger and wider legal basis for the application of the principle.

Its Article 3 sets an obligation for EU countries to ensure that the principle is respected in planning, policy and investment decisions in both the energy and non-energy sectors. This obligation is coupled with requirements for EU countries to

• develop and apply cost-benefit assessment methodologies that properly assess the wider societal benefits of energy efficiency solutions
• identify an entity responsible for monitoring the application of the principle
• report to the Commission on how the principle is applied

Guidance for EU countries

The implementation of the Energy Efficiency First principle is supported by the Commission Recommendation (EU) 2021/1749, which identifies specific actions to be taken by EU countries to ensure its proper application. Its annex provides detailed guidelines including further explanations, tools and examples to help decision-makers understand and apply the principle in various contexts.

In 2022-2023, the Energy Efficiency Financing Group (EEFIG) led a working group on how to apply the principle in sustainable finance. The working group report was published in November 2023.