Reducing energy demand while securing supply

The question of how to manage the EU’s energy demand has moved up the political agenda in recent years. Fears over soaring oil prices and mounting carbon dioxide (CO2) emissions have made Europeans look for ways to reduce their energy consumption, without radically changing European lifestyles.

In March this year the European Commission asked member states to consider developing a more co-ordinated energy policy.

But long before the idea of a common EU policy emerged, Andris Piebalgs had made managing energy demand a priority for his five years as European energy commissioner. For the Latvian, energy efficiency was the new buzzword, describing an idea set to reduce imports, create jobs and fight climate change.

In one of his very first speeches as energy commissioner, in November 2004, Piebalgs told the European Parliament: "Energy efficiency has to be a core objective of the Commission energy policy. I believe we have no choice other than to reduce energy demand."

His ambition became more substantial last Thursday (19 October) with the publication of an energy efficiency action plan.

For a while it looked as though the plan might not emerge, following internal Commission fears that early drafts were confusing and bureaucratic. Some Commission departments were said to be arguing in favour of merging a shortened energy efficiency strategy with the comprehensive energy review due next January.

Piebalgs eventually saw the action plan emerge after some rewriting but no substantial changes to the content.

The main aim of the plan is to cut dependence on oil and gas imports by reducing EU energy consumption by 20% before 2020.

Though largely based on existing EU laws, the action plan also sets out challenges for the next six years.

Top of the list is persuading Europe to change its tax laws in favour of energy-efficient products. The action plan is clear about the need for this. "Experience has shown that taxation… is a powerful tool in promoting energy efficiency."

The plan urges governments to be encouraged to consider tax breaks for companies and consumers and calls for a review of the energy tax directive before the end of 2008.

The Commission also hopes to find a way of improving the efficiency of buildings and transport, which between them account for more than 700 megatonnes of oil equivalent (Mtoe) of energy every year.

In the long term, the Commission will also have to answer questions about the trade implications of imposing tough energy efficiency standards on products made in the EU.

One partial answer might be to help the rest of the world, particularly developing countries, deal with their rising emissions and meet European energy efficiency standards.

All in all, the challenge of developing more efficient homes, vehicles and factories is far greater than it seems.

The question of how to manage the EU’s energy demand has moved up the political agenda in recent years. Fears over soaring oil prices and mounting carbon dioxide (CO2) emissions have made Europeans look for ways to reduce their energy consumption, without radically changing European lifestyles.