European Green Deal

In order to best match the European Commission’s agenda, EHPA decided to make the European Green Deal its first policy priority area focussing on those dossiers with the highest relevance for the heat-pump industry.

Since the outbreak of the COVID-19, the European Commission has been taking urgent measures and modified its work programme to prepare long-term measures to best cope with the effects of the crisis and prepare a “green” and “digital” economic recovery.

The 2010 Energy Performance of Buildings Directive (EPBD) aims to reduce the energy consumption of buildings. It sets several obligations to Member States, among which: that all new buildings must be nearly zero energy buildings (NZEB) by 31 December 2020, that minimum energy performance requirements must be set for new buildings, for the major renovation of buildings and for the replacement or retrofit of building elements (including heating and cooling systems), and that compulsory inspection schemes must be established for heating and air conditioning systems (or equivalent measures).

A revised version of the 2010 EPBD is to be transposed by Member States in March 2020. The revised Directive aims to accelerate building renovation rates by reinforcing provisions on long-term building renovation strategies (to be submitted by March 2020), with a view to decarbonising the building stock by mid-century. The text promotes the use of high-efficiency alternative systems in new buildings, when feasible, and foresees the creation of a Smart Readiness Indicator for Buildings, which should give recognition and incentivise the use of smarter building technologies and functionalities that enhance the energy efficiency of the building stock. 

The introduction of new EPBD has been accompanied by some EC initiatives, such as a buildings database - the EU Building Stock Observatory - (to track the energy performance of buildings across Europe) and the Smart Finance for Smart Buildings initiative (to direct investment towards the renovation of building stock). In the first half of 2019, the EC also published a Recommendation on building renovation and a Recommendation on building modernisation to facilitate the implementation process at national level. 

In addition, the new European Commission to make the renovation of the European building stock one of its priorities. A “Renovation wave” initiative in expected in Autumn 2020. In preparation of this, the European Parliament is preparing a report to insist one some priorities.

After having adapted the electricity market design to meet the EU 2050 decarbonisation objectives, the European Commission wants to modernise the gas infrastructure. The EC is following an integrated approach in view of an Energy System Integration strategy to be published in Q2 2020.

The Commission set out its vision for a climate-neutral EU in November 2018, looking at all the key sectors and exploring pathways for the transition. The Commission's vision covers nearly all EU policies and is in line with the Paris Agreement objective to keep the global temperature increase to well below 2°C and pursue efforts to keep it to 1.5°C. As a follow-up to the European Green Deal Communication, the Commission proposed on 4 March 2020 the first draft European Climate Law to enshrine the 2050 climate-neutrality target into law. It is expected to be finalised over the second half of 2020. 

All Parties to the Paris Agreement are invited to communicate, by 2020, their mid-century, long-term low greenhouse gas emission development strategies.

The European Parliament endorsed the net-zero greenhouse gas emissions objective in its resolution on climate change in March 2019 and resolution on the European Green Deal in January 2020.

The European Council endorsed in December 2019 the objective of making the EU climate-neutral by 2050, in line with the Paris Agreement. The EU submitted its long-term strategy to the United Nations Framework Convention on Climate Change (UNFCCC) in March 2020.

EU Member States are required to develop national long-term strategies on to achieve the greenhouse gas emissions reductions needed to meet their commitments under the Paris Agreement and EU objectives.

To meet the EU’s energy and climate targets for 2030, EU Member States need to establish a 10-year integrated national energy and climate plan (NECP) for the period from 2021 to 2030. Introduced under the Regulation on the governance of the energy union and climate action (EU/2018/1999), the rules requires the final NECP to be submitted to the Commission by the end of 2019. The Commission will, as part of the energy union report, monitor EU progress as a whole towards achieving these targets. To better develop and implement the plans, the Member States must consult citizens, businesses and regional authorities in the drafting and finalisation process. Each country must then submit a progress report every two years.

In line with Article 14 of the Energy Efficiency Directive (12/27/EU), EU countries are requested to carry out and notify to the Commission a comprehensive assessment on efficient heating and cooling. If the Commission request it, these assessments can be made every five years. By 31 December 2020, EU countries should submit their assessments. The revised Annex VIII to the Directive (Delegated Regulation 2019/826/EU) describes the methodology for the assessments. Notably, the assessments have to comply with legislation on the energy union, and they must be closely linked with planning of policy measures to the Regulation on the Governance of the energy union and climate action (EU/2018/1999).

”Sustainable finance” is understood as finance to support economic growth while reducing pressures on the environment (climate change mitigation and adaptation) and taking into account social and governance aspects (ESG). Sustainable finance also encompasses transparency on risks related to ESG factors that may impact the financial system, and the mitigation of such risks through the appropriate governance of financial and corporate actors. 

Sustainable finance is a work stream aimed at supporting the European Green Deal by channelling private investment to the transition to a climate-neutral economy, as a complement to public money.

To implement the Commission’ 2018 action plan on sustainable finance, a proposal for a regulation on the establishment of a framework to facilitate sustainable investment was tabled. This regulation establishes the conditions and the framework to gradually create a unified classification system ('taxonomy') on what can be considered an environmentally sustainable economic activity. On 18 December 2019, the Council and the European Parliament reached a political agreement on the Taxonomy Regulation, which was finally approved on 18 June 2020. 

In order to inform its work on the EU taxonomy, the European Commission established a Technical Expert Group (TEG) on sustainable finance in July 2018. The TEG published a draft report in June 2019 and its final report on EU taxonomyon 9 March 2020. The report contains recommendations relating to the overarching design of the EU taxonomy, as well as extensive implementation guidance on how companies and financial institutions can use and disclose against the taxonomy. The report is supplemented by a technical annex containing notably updated technical screening criteria for 70 climate change mitigation and 68 climate change adaptation activities, including criteria for do no significant harm to other environmental objectives.

After the adoption by the EC of a 'Circular economy package' in December 2015 aiming to boost EU economy, making it more sustainable and competitive in the long run, the Commission adopted the new Circular Economy Action Plan which was part of the European Green Deal March 2020. It aims to make the EU economy fit for the sustainable transition while strength EU competitiveness by delivering on circularity as well as widening the application of the ecodesign framework beyond energy related products. While this new Circular Economy Action Plan focuses on identified product groups (e.g. electronics and ICT, batteries and vehicles, packaging, plastic, textiles, construction and buildings, and food), EHPA will closely monitor this action plan as the European Commission has already the intention to expand the scope of this initiative. 

In 2018, as part of the 'Clean energy for all Europeans package', the new amending Directive on Energy Efficiency (2018/2002) was agreed to update the policy framework to 2030 and beyond. The key element of the amended directive is a headline energy efficiency target for 2030 of at least 32.5%. Under the amending directive, EU countries will have to achieve new energy savings of 0.8% each year of final energy consumption for the 2021-2030 period.

Other elements in the amended directive include stronger rules on metering and billing/allocation of costs of thermal energy, an updated primary energy factor (PEF) for electricity generation of 2.1 and new rules on “comprehensive assessments on heating and cooling” (see point 1.9 below).

By June 2021, the European Commission will review and, where necessary, propose to revise this directive to deliver additional greenhouse gas emissions reductions.

The original renewable energy directive (2009/28/EC) establishes an overall policy for the production and promotion of energy from renewable sources in the EU. It requires the EU to fulfil at least 20% of its total energy needs with renewables by 2020 – to be achieved through the attainment of individual national targets. All EU countries must also ensure that at least 10% of their transport fuels come from renewable sources by 2020.

In December 2018, the revised renewable energy directive 2018/2001/EU entered into force, as part of the Clean energy for all Europeans package, aimed at keeping the EU a global leader in renewables and, more broadly, helping the EU to meet its emissions reduction commitments under the Paris Agreement. 

The new directive establishes a new binding renewable energy target for the EU for 2030 of at least 32%, with a clause for a possible upwards revision by 2023.

Under the new Governance regulation, which is also part of the Clean energy for all Europeans package, EU countries are required to draft 10-year National Energy & Climate Plans (NECPs) for 2021-2030, outlining how they will meet the new 2030 targets for renewable energy and for energy efficiency. Member States needed to submit a draft NECP by 31 December 2018 and should be ready to submit the final plans to the European Commission by 31 December 2019.

Most of the other new elements in the new directive need to be transposed into national law by Member States by 30 June 2021.   

In March 2020, the European Commission published the Industrial policy Package which includes several initiatives: the new industrial strategy for Europe together with a new SME Strategy, the Single Market Barriers Report and the Enforcement Action Plan for the Single Market. The European Commission established a set of fundamentals for Europe’s industrial transformation in order to support the industry towards a climate neutrality. Modernising and decarbonising energy intensive industries is one of the top priorities. 

Consequently, the European Parliament started preparing an INI report "A new industrial strategy for the EU: Recovery, Reconstruction and Transformation", taking also into account the new for a strong recovery of the EU after the COVID-19 pandemic.