Content updated 4 May 2023

The Energy Efficiency Directive

In July 2021, a revision of the Energy Efficiency Directive (EED) was, proposed, setting a more ambitious binding annual target for reducing energy use at EU level.

In late March 2023, the European Parliament and the European Council agreed on a target for 2030 of 11.7% reduction in energy use compared with the energy consumption forecasts for 2030. When formally adopted, the new legislation will be published in the Official Journal of the Union and enter into force.

View the press release here

The energy efficiency target

The agreement establishes an EU energy efficiency target of 11.7% for 2030, exceeding the Commission's original ‘Fit for 55' proposal. 

It requires EU Member States to collectively ensure an additional reduction of final and primary energy consumption, compared with energy consumption forecasts made in 2020.

EU countries will be required to achieve new savings each year of 1.49% of final energy consumption on average, from 2024 to 2030, up from the current level of 0.8%. They will gradually have to reach 1.9% by the end of 2030.

Energy efficiency first principle

For the first time, the energy efficiency first principle is given legal strength with a clear requirement for EU countries to take energy efficiency into consideration in policy, planning and major investment decisions in the energy sector and beyond.

In the Commission’s Recommendation on ‘Energy Efficiency First’, energy communities and local authorities have been acknowledged as a way to apply the energy efficiency first principle at the local level.

Energy efficiency solutions also include demand-side resources and system flexibilities. The principle should also be assessed not only in the planning but also in the design of policies and major investment decisions.

Public sector

The agreement includes a specific obligation for the public sector to achieve an annual energy consumption reduction of 1.9%. The annual energy savings obligation for Member States for the period between 2024 and 2030 is currently 0.8%.

Public authorities have an obligation to renovate at least 3% of the total floor area. This also covers regional and local levels.

Heating and cooling (H&C)

Under the agreed rules, EU countries will also have to promote local heating and cooling plans in large municipalities having populations above 45,000.

Minimum requirements will be gradually changed to ensure a fully decarbonised district heating and cooling supply by 2050.

Support to new high-efficiency cogeneration units using natural gas and connected to district heating in efficient district heating and cooling systems will not be possible after 2030. Any other fossil fuel use will be banned for new heat generation capacities in such systems.

Energy Management Systems

Energy management systems will become a default obligation for large energy consumers. All enterprises, including SMEs exceeding 85TJ of annual energy consumption, will have to implement an energy management system. Alternatively, they will be subject to an energy audit (if their annual consumption exceeds 10TJ).

A reporting scheme for energy performance of large data centres is also introduced.

Energy poverty and consumers

The agreement includes the first ever EU definition of energy poverty put a stronger focus on alleviating energy poverty and empowering consumers.

Member States will now have to prioritise support for low-income citizens and people affected by energy poverty, vulnerable customers, when implementing energy efficiency improvement measures

Financing

Member States will be required to promote innovative financing scheme and green lending products for energy efficiency, by ensuring their wide and non-discriminatory offer by financial institutions. They will have to report on the volume of energy efficiency investments