On 10 March 2023, the European Council and the Parliament reached a provisional agreement to reform the EU Energy Efficiency Directive, which lays down rules and obligations for achieving the EU’s 2030 energy efficiency targets. The agreement aims to reduce final energy consumption at EU level by 11.7% by 2030, exceeding the Commission’s original ‘Fit for 55’ proposal. Rapporteur Niels Fuglsang (S&D, DK) presented the agreement as a great victory that is 'not only good for our climate, but bad for Putin'. Kadri Simson, Commissioner for Energy, added: 'Energy efficiency is key for achieving the full decarbonisation of the EU’s economy and independence from Russian fossil fuels'.
While this marks the first time EU policymakers have made an energy consumption target binding, trade unions, NGOs and civil society organisations are critical. ResCoop, for example, notes that the overall EU 11.7% target is non-binding at EU level: binding energy saving targets (1.49%/year) refer to the individual Member States only. Meanwhile, the Climate Action Network (Europe) regrets that, despite its binding nature, the target 'does not even align with the REPowerEU Plan, failing to recognise the skyrocketing energy prices as a result of Russia’s aggression in Ukraine. It is far below the 20% energy efficiency target that is needed for the EU to fulfil its obligations under the Paris Agreement'.
However, there is consensus that some progress has been made compared to the existing Directive. Firstly, energy efficiency requirements must now be integrated into public procurement. This normative technique echoes the horizontal policies promoted in EU public procurement and concession laws, under which the procurement or concessions of products, services, buildings and public spaces by public administrations are used as a lever to achieve social and environmental sustainability goals.
Secondly, the revised directive will lay down an obligation for large energy consumers to adopt an 'energy management system'. This includes SMEs that exceed 85 terajoules of annual energy consumption (a terajoule/TJ is equal to one trillion joules; or about 0.278 gigawatt hours/GWh, which is often used in energy tables). Otherwise, they will be subject to an energy audit (if their annual consumption exceeds 10TJ). Workers could be positively affected by this provision. For example, MBO’s plan of managerial staff could include indicators linked to energy efficiency targets under the energy management system. Workers’ representatives could negotiate collective agreements that redistribute the resources flowing from energy and cost savings to go towards wage raises. This would be consistent with the opinion of the European Economic and Social Committee, according to which 'new awareness of the need for more restrained consumption will free up resources, which can then be used for other things. Trade union agreements on measurable targets and distribution of profits between businesses and workers could be a useful way of raising widespread awareness of the importance of saving energy'.
Thirdly, the agreement includes the first ever EU definition of energy poverty – a situation in which households are unable to access essential energy services and products. People affected by energy poverty – vulnerable customers, low-income households, and, where applicable, people living in social housing – should be given primacy when Member States implement energy efficiency improvement measures. The revised rules put a stronger emphasis on alleviating energy poverty and empowering consumers, acknowledging support for energy communities as one way to meet the targets. Since the condition of energy poverty affects many vulnerable people from the working class, this is certainly another area for collective action by trade unions. Unsurprisingly, unions from different EU countries are already engaged in cooperation with NGOs and environmental groups to promote energy communities as a way to democratise the energy system while connecting energy poverty and labour disempowerment (see initiative by CGIL and Fiom-CGIL Milan as examples).
The provisional agreement now requires formal adoption by the European Parliament and Council. Further comments will follow soon after the text is published in the Official Journal of the Union and enters into force.