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The Role of Cohesion Policy in the Achievement of Energy Efficiency Goals

Submitted by on 25 Nov 2013 – 16:10

By Mojca Kleva Kekuš MEP

At the heart of Europe’s strategy for smart, sustainable and inclusive growth, the benefits of energy efficiency have long been recognized. Nonetheless, the EU is facing a severe challenge to meet its objective of reducing the overall energy consumption by 20% by 2020, where policies fostering energy efficiency could and should play a stronger role. Energy efficiency improvements are decisive for European competitiveness and represent a win-win option in the fight against climate change. Investing into energy efficiency measures can bring about immediate and tangible benefits for households and businesses, such as reduction of costs, creation of employment opportunities and growth as well as an encouragement of the transition towards a low carbon economy.

With cohesion policy being one of the major sources of support to put the EU back on track to reach the energy efficiency objective, the Commission has responded to this challenge by proposing for the next programming period (2014-2020) almost double the proportion of the Cohesion Policy budget dedicated to climate-related expenditure, including energy efficiency. Increased financial commitment, strengthened position within upcoming legislative texts (thematic concentrations) and a clear role of energy efficiency measures within implementation procedures (operational programmes) are three pillars of support for the future of energy efficiency measures within Cohesion policy.

I fully support this focus as I believe that the European Structural and Investment Funds can help provide incentives for private investment in energy-efficient products, transport modes, buildings, industry, works and services, including energy efficiency services and can help reduce public expenditures on energy bills, giving better value for public money. It is of crucial importance that in the future Member States see the use of European Structural and Investment Funds for energy efficiency as an investment opportunity with a high leverage effect and not as an expenditure.

The Commission has already highlighted that increased focus on energy efficiency requires in particular increased efforts in more efficient transport and more efficient housing and buildings, areas where public authorities, in particular at regional and local level, play a decisive role. We, policy makers on all levels, should therefore make sure that the greatest energy saving potential does not remain untapped in the upcoming programming period 2014-2020.

I am excited to see that in the upcoming 7 years a greater proportion of the ERDF funding will be dedicated to energy efficiency across all types of regions.

The upcoming programming period also represents a good opportunity to eliminate fuel poverty within the EU. With nearly 9% of our citizens (in 2010) unable to heat their homes adequately, this share represents a serious anomaly where a policy response is necessary. Particularly severe in new Member States, fuel poverty and its links to energy efficiency promotion and vulnerable consumers have to be examined in detail by the Commission.

We should also strive to generate new employment opportunities through energy efficiency measures, where especially the building and transport sector can see concrete results already in the short and medium terms.

Furthermore, the issue of social housing construction and renovation should go hand in hand with energy efficiency objectives and standards. Member States and all stakeholders should take account of social housing already in their national reform programmes and in the shaping of strategic priorities under partnership agreements.

While the need to invest upfront is one of the greatest obstacles to realizing energy savings at local and regional level, we should ensure that measures taken at EU level take due account of the implications for municipalities and regions. In this regard, local and regional representatives should be consulted when development guidelines are being established in the field of energy.

I strongly believe that concrete contribution to overcoming this obstacle also stands in the strengthened role of new innovative financial instruments, where especially in combination with grants, financial instruments can serve as a successful and innovative approach to leverage private funding, create new models of private-public partnerships and enhance innovation.

Add to the difficulties with upfront financing, market and regulatory barriers, and also the pressing effects of the economic and financial crisis, and it becomes clear and essential that in the future Europe finds new innovative ways of financing energy efficiency projects.

The Commission has already showed its support for the enhanced role of financial instruments in the programming period 2014-2020. Nonetheless, I would like to see a timely delivery and legal clarity to be guaranteed without delay and presented together with proposals for off-the-shelf financial instruments that are to be available in the future.

The factors adversely affecting energy efficiency development have in the past seven years (2007-2013) been more practical than regulatory – for example inadequate information and financial incentives, low profile of energy efficiency and inadequate implementation of existing legislation. That is why I believe we need to build on this further and make sure our local and regional representatives together with the civil society and businesses are included in the process of designing strategies and programs for energy efficiency already at an early stage of policy design and implementation. Strengthened communication and understanding of legislative opportunities can further help to make the implementation of energy efficiency measures a real success. With the help of Cohesion Policy’s strengthened commitment to energy efficiency, I am hopeful that Europe can reach the goals and ambitions to which we committed ourselves in our Europe2020 strategy.