Energy Efficiency,European Commission
Heads of European Governments have ignored all the evidence on energy efficiency and failed to set binding targets. What was behind the UK’s opposition?
Not that long ago, I recall visiting the offices of those overseeing UK energy policy, to be greeted with a large poster that read: “Real Men Build Power Stations.” How things have changed, you might think.
The International Energy Agency now routinely describes energy efficiency as “the first fuel” option. This March the heads of the 28 European Union governments unanimously agreed that increasing investment in energy efficiency should be the “first step” taken to reduce energy imports and increase energy security.
The day after he became Secretary of State for Energy and Climate Change, Edward Davey launched the Energy Efficiency Deployment Office, promising that improving energy saving would be his “number one priority.”
Energy Efficiency Targets,Energy Policy,European Commission
How do you know when your energy efficiency strategy has succeeded? Most companies can answer that, because they set themselves very specific savings targets. They recognise that it is rigorous monitoring and targeting which are the key components of any successful drive to reduce fuel wastage.
Shame therefore that our government seems to be deliberately eschewing any such overt measurements of success – or failure. Simply because it refuses to declare any statistical targets for its energy efficiency initiatives.
To be fair, there is one pertinent target that Energy Secretary Edward Davey has been vigorously championing. He is calling for a 40 per cent cut between 1990 and 2030 in CO2 emissions across the 28 countries of the European Union. This should rise to 50 per cent, if an “ambitious global climate deal is struck.”
European Commission,European Union,Tax
ACE has submitted a written response to the European Commission, DG Taxation Consultation on “Review of existing legislation on VAT reduced rates”.
The EC’s stated aim is to create a “simpler, more efficient and more robust” VAT system in the EU, partly by removing certain reduced rates which are believed to “constitute an obstacle to the proper functioning of the internal market”.
The EC has already conducted some evaluation of the existing VAT structure, and this consultation focuses on key areas that require further consideration, including the reduced VAT rate for certain energy products.
Download ACE’s consultation response here: Consultation Response: VAT reduced rates
European Commission,European Union,VAT
Should energy-saving products be subject to the full 20 per cent rate of VAT? The UK and the European Commission are set to do battle in the courts
Next spring a case will be heard in the European Courts. The result could seriously damage the prospects for the government’s flagship Green Deal programme. This would increase the costs of installing many key energy-saving measures and by doing so, render many potential packages simply too expensive to undertake.
Under the Golden Rule, the costs of installing any package of improvements funded by Green Deal Finance must be capable of being repaid during the lifetime of the loan. To qualify, calculations are made, valuing potential consequent reductions in energy consumption at its present price against the costs of measures installed (plus interest). Monthly loan repayments must be more than matched by putative energy savings. If on paper this cannot be shown to be profitable to the householder, no loans will be able to be made.
If the European Court of Justice rules against the UK government, then the cost of installing a whole range of familiar energy-saving items – thermostatic radiator valves, microgeneration, and every kind of insulation installed by contractors – will increase overnight by a whopping 15 per cent. That includes the costs of installation, as well as the costs of materials.
Energy Policy,European Commission
There is no lack of enthusiasm in Brussels for increasing the uptake of renewable heat but formulating a draft directive could be more troublesome
Almost half of all energy used in Europe is for heating and cooling purposes. It is accepted that fossil fuel use has to decline, both to reduce the need for imports and the threat of climate change. Hence the big drive to improve the efficiency with which Europe’s buildings are heated and cooled.
But, however efficient the fabric of the building, and however efficient the boilers and the cooling systems, some energy still has to be consumed. There is a big drive on to make sure as much of that energy as possible comes from renewable sources.
Effectively there are just three countries in Europe where such renewables for heating/cooling form a significant part of the market. Between them, Austria, Greece and Germany are responsible for 75% of total EU renewable heating/cooling consumption.
Emissions Trading,European Commission
When emissions trading was launched it was hailed as a genuine market-driven way of addressing climate change. But problems loom as expansion approaches
There are few public policy initiatives which have been launched with such a wave of enthusiasm as the European emissions trading scheme. It wasn’t a tax. It wasn’t regulations. Everybody – be they industrialist, politician or eco-warrior – enthused that this was the first truly market sensitive way of addressing the threat of climate change. But suddenly many participants are warning that if the system is extended, as the Prime Minister wants it to, it could yet implode.
The idea behind emissions trading is simple. Company A has its allocation of, let us say, 100 units of CO2. These have a value, depending on the price that Company B or C (who will also have been given allocations) wish to pay for them. The idea is that, in order to be in a position to sell on its permits, the more far-sighted companies will undertake investments which reduce the number of permits it needs. At the end of the accounting period, each participating company has to demonstrate that it has sufficient permits to cover its total emissions. These can be bought from any participant based anywhere in the European Union. In the initial months of the trading system, the volumes traded have been understandably low. The price has varied significantly, between a handful of euros per tonne of carbon dioxide, up to around 30 euros per tonne.
Air traffic,European Commission
No tax on aviation fuel, no VAT on air travel, no halt to the rise in aviation emissions. So how can the European Union slow the trend in air transport?
All around London Stansted are a raft of posters. Each objects to proposals for the airport’s continuing expansion. Each bears the message: “Cheap Flights Cost The Earth.”
That slogan is all too prescient. Up till now, every official inventory of greenhouse gas emissions has carefully excluded what has become the fastest growing area of energy use, bar none. Specifically, international aviation.
European passenger air traffic is growing at a compound rate of over 4% a year. Freight traffic is growing at 6.4%. There is nothing to halt this trend. By 2050, if other energy-consuming sectors reduce emissions as per the present European Union aims, aviation could account for two-thirds of all EU carbon emissions. To cap it all, ticket prices historically have fallen by 1% a year in real terms, but are currently falling far faster.