EU negotiators informally agreed on a non-binding 32.5% energy efficiency target for 2030, with a 2023 upward review clause late Tuesday, effectively closing debate on a key part of the European Commission's November 2016 clean energy package proposals.
* Informal accord needs formal approval
* Higher target to constrain natural gas demand, CO2
* Part of EU efforts to cut emissions by 80% by 2050
"This ... is a major push for Europe's energy independence," EU climate action and energy commissioner Miguel Arias Canete said after the deal with the European Parliament and EU Council, representing the 28 national governments.
"Europe is by far the largest importer of fossil fuel in the world," he said. "This deal shows Europe's determination to build a modern economy that is less dependent on imported energy and [has] more domestically produced clean energy."
The target is higher than the 30% the EC originally proposed in its updated draft to the EU energy efficiency directive, but lower than the 35% the parliament wanted.
The higher 2030 energy efficiency target will likely constrain natural gas demand in particular, and lower greenhouse gas emissions, according to EC projections in 2016.
This could dampen EU carbon prices in the EU Emissions Trading System in the long term, and potentially reduce longer term demand for gas imports. Russia is the EU's single, biggest external gas supplier.
Both the EC and parliament had also wanted a binding target, which would have been a first for the EU, while the council originally backed a non-binding 30% target.
The current EU energy efficiency target of a 20% improvement by 2020 is non-binding, and national governments had repeatedly resisted binding efficiency targets.
The deal does extend the existing binding obligation on suppliers to save energy equivalent to a portion of their energy sales each year up to 2030, according to lobby group the Coalition of Energy Savings.
The new obligation required "a real annual savings rate of 0.8% after 2020," the CES said. The headline required rate, up to 2020, is 1.5% of energy sales per year. However, the CES said that flexible options available to governments to achieve this, means that the real savings rate is around 0.7% per year.
The informal deal has to be formally approved by both the council and parliament before the updated energy efficiency directive can become binding. This is usually a formality.
The updated directive will enter into force 20 days after being published in the EU's Official Journal. Governments will have to transpose the updates into their national law within 18 months after that, so likely around mid- to late-2020.
FOCUS SWITCHES TO POWER MARKET DESIGN
The Bulgarian EU presidency, which negotiated on behalf of the council, wanted to get an informal agreement on the updated energy efficiency directive before Austria takes over the rotating EU presidency on July 1.
This is so Austria can focus on reaching agreements on the other files in the EU's 2016 clean energy package legislation, including electricity market design, electricity risk-preparedness, and new rules to govern EU energy regulatory agency, ACER.
The updates to the energy efficiency directive and the rest of the 2016 clean energy package legislation, including an updated renewables directive, are all part of the EU's efforts to cut its greenhouse gas emissions by at least 80% by 2050.
EU negotiators informally agreed last week on a binding target to source 32% of the EU's final energy demand from renewables, including specific measures to increase renewable energy use in heating, cooling and transport, as well as an upward review clause in 2023. - Platts -