Dispute over 'bonkers' EU energy savings plan

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EU commissioners are meeting today to agree an energy savings target for 2030 amid serious disagreement about how ambitious it should be.

Several countries, anxious over the security of their Russian gas supplies, are pushing for a tough, binding goal.

But EU officials are reluctant to agree because they fear it might damage the overall energy and climate package.

Campaigners and industry have described the reluctance to embrace ambitious savings goals as "bonkers".

Compared to the attention given to cutting carbon or investing in renewables, energy efficiency has long been the Cinderella of the EU's climate and energy policies.

But the crises in the Crimea and Ukraine earlier this year have pushed energy savings up the political ladder. Several governments are now pushing for a tough target as they believe it will help them to limit their dependence on Russia.

In January, after difficult negotiations, the EU published outline proposals on what its targets for 2030 should be.

They proposed a 40% cut in carbon, while renewables would make up 27% of energy consumed. Energy efficiency was due to be increased by 27%.

Under pressure from countries like Germany, the Commission examined a range of higher efficiency targets up to 40%.

The result of an internal review showed that while a 27% goal would cut gas imports by roughly 16%, this would double to around 33% if the savings target was raised to 35%.

The review also pointed out that the costs of going for these targets would be dramatically offset by gains in employment from all the insulation jobs that would be created plus the reduction in fuel consumed.

But there has been strong resistance to upping the savings goal.

Energy suppliers are reluctant to push for a policy that would cut demand for their product.

But concern has also been raised that if this higher level of efficiency came to pass, it would have a negative effect on the EU's flagship plan for cutting carbon, the Emissions Trading Scheme (ETS).

The ETS is aimed at power producers and big industry, and forces them to pay for permits to emit carbon. The worry is that if efficiency helped countries achieve their binding goals in reducing emissions, there would be no incentive to trade and the ETS might collapse.

"It's a very strange debate," said Brook Riley from Friends of the Earth in Brussels.

"Because they are setting a limit on the cuts, like a lid on a saucepan, they are forced to limit energy savings and renewables to avoid damaging the emissions trading system.

"They are actually talking about burning more coal if emissions fall faster than expected due to energy savings and renewables, purely to protect the carbon price. It's bonkers!"

This view is not just held by environmental campaigners. Knauf Insulation are a private company that employ 5,000 people around the world. They are also in favour of a tough, binding target on efficiency.

"The whole principle of the ETS as I understood it was as an energy efficiency policy, that is to make it more penal to emit carbon," said CEO Tony Robson.

"To have a view that energy efficiency in another format will damage another energy efficiency policy is just madness. Absolute madness."

The big art

The most recent leak from the outgoing Commission showed that officials were planning a non-binding goal under 30%.

However the President-elect of the incoming Commission, Jean Claude Juncker, has added his voice to those in favour of higher ambition.

Mr Juncker told the Parliament that "a binding 30% energy efficiency target is for me the minimum".

But whether this will come about is still up in the air. The UK and a number of other countries are standing firm against a bigger target. The view from insiders is that the Commission are pinning their hopes on securing a headline carbon goal of a 40% cut.

The Commissioners feel that they have a strong chance of agreement among the 28 for this policy. If they try and push for more, such as a binding efficiency target, the whole apple cart might topple.

Climate Commissioner Connie Hedegaard says she supports a high number - but the realities of politics within the 28 member body may prevail.

"Can we do more than already proposed in the field of energy efficiency without destroying the whole basis on which our 2030 package is presented?" she told BBC News.

"Time is getting short so you also have to calibrate how much are you saying now it's about this than about the other things, because it is a whole package we have to get through, and that is never an easy job."

"The big art here is not to be able to say I am so and so ambitious, the big art here is to be exactly so maximum ambitious that you can carry the 28 members states and the Parliament."

If they find agreement, the Commission's proposals will go forward to a heads of government meeting in October which will have the final say of the 2030 goals.

Follow Matt on Twitter @mattmcgrathbbc.