Efficiency Redefined: the new EU Energy Efficiency Directive

The new, recast Energy Efficiency Directive (EU) 2023/1791, which was adopted by the European Parliament and the Council earlier this year, has been published in the EU Official Journal and will enter into force in 20 days. After its entry into force, EU Member States will have two years to transpose most of the different elements in the directive into national law.

This publication signifies the conclusive phase of a legislative journey initiated by the Commission's proposal in July 2021, as an integral part of the 'Fit for 55' package. Subsequently, an additional proposal was introduced under the REPowerEU initiative in May 2022.

The new directive ushers in an array of measures designed to expedite the advancement of energy efficiency. It notably champions the "energy efficiency first" principle across both energy and non-energy policies. These measures encompass the following:

• Establishing an EU legally binding target to reduce the EU’s final energy consumption by 11.7% by 2030 (relative to the 2020 reference scenario). This includes for each Member State the requirement to set its indicative national contribution based on objective criteria reflecting national circumstances. If the national contributions do not add up to the EU target, an ambition gap mechanism is applied by the Commission.
• Increasing annual energy savings from 0.8% (at present) to 1.3% (2024-2025), then 1.5% (2026-2027) and 1.9% from 2028 onwards. That’s an average of 1.49% of new annual savings for the period from 2024-2030.
• Obliging Member States to prioritise vulnerable customers and social housing within the scope of their energy savings measures. 
• Introducing an annual energy consumption reduction target of 1.9% for the public sector as a whole.
• Extending the annual 3% building renovation obligation to all levels of public administration.
• Introducing a different approach, based on energy consumption, for businesses to have an energy management system or to carry out energy audits.
• Bringing in a new obligation to monitor the energy performance of data centres, with an EU-level database collecting and publishing data.
• Promoting local heating & and cooling plans in larger municipalities.
• Progressively increasing the efficient energy consumption in heat or cold supply, also in district heating.