Has the EU helped or hindered sustainable energy use in buildings?

Author: 07/06/2016

The European Union is often accused by its detractors of forcing legislation upon the UK that is either unnecessary or that could have been introduced independently by the UK Government, and that much of the legislation has been watered down by other member states to a level where it lacks real teeth, but is more about form filling. The Union's proponents would counter that it has acted a spur to the UK, especially on environmental issues, forcing a foot-dragging Government to implement much needed environmental protection legislation.

This short article looks at the main EU directives affecting energy use and demand in buildings and industry. It will not consider supply-side (generation or production) issues, including those encouraging renewable energy or the provisions of the cogeneration directive which is sometimes seen as a demand-side measure, nor will it look at the complex interactions between energy efficiency initiatives and transport. It will also focus on purely energy Directives, rather than broader ones that touch the same areas such as the Eco-labelling Directive.

The European Union does not write UK laws. Instead, it issues Directives that must be enshrined into national law, and has the power to fine member states (countries) if they fail to do so within a prescribed timescale. Consequently it is up to the UK Government on how it interprets EU directives, and although in some cases they are specified in considerable detail allowing little latitude for national variations, in others the UK government has had considerable freedom to add its own rules, and this can sometimes lead to accusations of "gold-plating".

Arguably, where the UK Government has chosen to enhance or extend the provisions of Directives in this way, it would in any event have introduced equivalent provisions as national legislation in the absence of the EU.

There are three main Directives covering energy use:

  • Directive 2010/30/EU of the European Parliament and of the Council of 19 May 2010 on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products (the "Energy Labelling Directive")
  • Directive 2010/31/EU of the European Parliament and of the Council of 19 May 2010 on the energy performance of buildings (the "EPBD")
  • Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC ("the Energy Efficiency Directive")

The Energy Labelling and EPBD Directives are themselves revisions of earlier directives.

The Energy Labelling Directive

This Directive, and its predecessors, have been responsible for the introduction of the now-familiar A-G colour-coded energy rating bands. The underlying principles have been that for any energy-consuming goods that are potentially tradable between member states, a common label should apply, so that a Greek fridge should be assessed in the same way as a German one, and that essentially the same label can be used in Britain as in their home markets.

Of all the Directives, this is possibly seen as the most successful.  Manufacturers appreciate a single labelling scheme across Europe, avoiding a plethora of national schemes and standards, and although UK consumers are unlikely to travel to France for a fridge, it has helped expand the range of goods available by permitting goods to be freely imported or exported. Moreover, the label has been used as a basis for setting minimum standards, so that over time lower rated equipment has been withdrawn from the market, resulting in lower running costs for consumers and wider environmental benefits.

The Directive has not been perfect. The initial scales were too generously drawn for manufacturers in some cases, resulting in the need to extend the scale at the upper end to A+, A++ and even A+++ on fridges for example, and it has been slow to extend to brown goods (TVs, entertainment systems, etc.). Arguably, it has been held back in some of these categories by a desire not to conflict with the rather different requirements of the US Energy Star system, but it is doubtful that the UK could have taken a stronger stance on its own. And by focusing on major European product categories, it has occasionally stifled competition from local innovations (gas tumble driers, for example).

If the UK were outside Europe, it would almost certainly have had to adopt the EU system; the former national limited labels failed to gain traction (can anyone remember the voluntary 1-10 scale for fridges and freezers from the early 1990s, that was used mainly by electricity showrooms but ignored by the big box retailers?). And would UK withdrawal from the EU really lead to reintroducing noisier, less energy efficient vacuum cleaners? Quite possibly, but only for a short time before the UK Government felt a need to re-impose standards similar to those currently being implemented across Europe.

The Energy Performance of Buildings Directive

The second main directive is also substantially built around energy labelling, but this time – as its name suggests – of whole buildings. Implemented in the UK through mandatory Energy Performance Certificates (EPCs), these are widely seen as an additional (and quite costly) administrative burden at the time homes or businesses are bought or let. Counterintuitively, they might be more valuable if they cost a little more – the typical price of £50-100 for a domestic EPC allows little time for a considered energy audit of the property, leading to automated cookie-cutter recommendations, and with no attempt to reconcile the EPC to actual fuel use.

Moreover, EPCs remain valid for 10 years (though many estate agents won't tell you that, preferring to make a profit by commissioning a new one), leading to potentially out of date information.

Some of these criticisms are overcome by the other type of certificate introduced in the UK following the EPBD. This is the Display Energy Certificate (DEC) which only applies to larger public buildings and shows actual annual energy use in a building. DECs can provide useful information for those responsible for energy management, especially if they are used to track year on year changes. However the UK Government has chosen to interpret "public building" quite narrowly, limiting the benefits in a possibly misguided attempt to constrain costs of compliance.

It has also done nothing to encourage voluntary adoption outside the public sector and although some private sector initiatives exist – such as the National Energy Foundation's Voluntary Display Energy Certificate (VolDEC) scheme – these tend to be used mainly by organisations that are already well on top of energy management.

The implementation of EPCs and DECs has been left very much to national governments as buildings, unlike fridges, cannot be readily traded across national borders. The UK built domestic EPCs on the existing Standard Assessment Procedure (SAP) and so the EU regulations have added little, other than a requirement to use a common A-G scale. In contrast, non-domestic EPCs have spurred the codification of a national buildings energy methodology (SBEM) and DECs seem unlikely to have been introduced without the EU Directive.

The UK Government's implementation of DECs has been far from ideal, and open to back-tracking, partly as it has seen some other member states that have a single combined EPC/DEC label. Despite pressure from the Daily Mail, it's unlikely that EPCs would change much in the event of a Brexit, especially as they are now – usefully – being used to impose minimum standards on private residential lettings.

The Energy Efficiency Directive

The final key Directive is aimed firmly at the non-domestic sector, and has a mish-mash of provisions. Some relate to measuring and reporting national energy use, including the establishment of a National Energy Efficiency Action Plan to help track intended 1.5% annual savings as part of the EU's 20:20:20 commitment. Others relate to using public buildings as exemplars, looking for 3% annual savings.

However, the key provision for many is the one requiring periodic energy audits on medium and large companies, or the introduction of formal energy management systems such as ISO 50001. This has been implemented in the UK through ESOS, the Energy Savings Opportunities Scheme. It has required almost 10,000 firms to introduce a four-year cycle of energy audits, with compliance notified through the UK's Environment Agency. It is still too early to see of these will lead to incremental energy efficiency measures being installed, or whether the reports – which typically cost several thousand pounds – will simply lie on a shelf until 2019 when the next cycle falls due.

It's unlikely that the UK would have done this without the Directive; it's uncertain whether nationally we will get value for money, but any fault will primarily lie with the companies choosing not to implement recommended measures.

Other EU initiatives

All three of the main Directives are about ensuring users of energy are better informed, and nudged to take action to improve their energy performance. None have taken the UK Government into totally new areas, and most initiatives have required only minor changes to UK policy. Despite the loud cries of the Europhiles or Brexiteers, the difference made has probably been marginal rather than fundamental, with some measures helping to inform consumers at a low cost by using standardised procedures across Europe, and others adding an administrative burden by bringing less flexible requirements to dwellings or companies in the UK.

The same can be said of most other EU initiatives. Schemes like the Emissions Training Scheme (ETS) have enabled action to be taken on a wider stage that would have been possible by the UK alone, and collaborative R&D programmes – such as Horizon 2020 – also theoretically spread resources by encouraging greater sharing of technical knowledge. The latter may or may not offer good value; it does, however, ring-fence some funding for innovation in the sector away from the short-term feast or famine approach that we seem to get through national budgets.

Stepping off the fence

If I were forced to step off the fence, I would say that on balance the EU has been beneficial for encouraging the more sustainable use of energy and hence for limiting energy's contribution towards global climate change. It has possibly been less seduced by the glamour of small-scale renewables than has the UK Government, and has instead kept to basic energy efficiency as the most cost-effective way of saving energy.

We should not forget that the cleanest unit of energy is the one that has not been used! We should also remember that climate change does not respect national borders; even if the UK were to maintain its leading position outside the EU, it might be that without UK officials speaking up for better energy use in the EU, some of the Eastern European states could persuade the EU to backtrack on its current initiatives.

However, if the UK were to leave the EU, it should still be able to play a leading global role encouraging energy efficiency through bilateral arrangements (with Europe and developing countries) and its strong participation in setting global standards through ISO.

Ian has been a Council Member of SocEnv since 2009 - representing the Energy Institute - and sits in its Cabinet as Treasurer. The views expressed in this article are personal, and might not represent those of SocEnv, the Energy Institute or the National Energy Foundation.

This article was first published in the June 2016 issue of Energy World magazine, published by the UK Energy Institute, www.energyinst.org