BRUSSELS (Reuters) - Europe is struggling to meet its own energy saving targets, as an aversion to upfront investment holds back a strategy that could create jobs, cut climate-warming emissions and save billions of euros.
Energy Commissioner Guenther Oettinger will give European Union governments two years to get the strategy back on track before proposing legally binding targets, according to a draft EU document seen by Reuters on Wednesday.
The EU's plan to reach 20 percent energy savings by 2020 is expected to create about two million jobs across the next decade, largely in building trades and engineering, and save consumers money they can then put back into the economy.
About 40 percent of Europe's energy is consumed in buildings, so any efficiency measures could save a sizeable chunk of the 40 billion euros ($55 billion) the EU's 27 member countries send abroad each year for gas.
But with budgets already strained, nobody is prepared to make the upfront investment.
Unlike the EU's successful strategies for car efficiency and renewable energy, this one is not legally binding.
Next month, the European Commission, which initiates EU law, will try to tackle the strategy's shortcomings with a new "Energy Efficiency Action Plan" -- but it will not decide whether to make the plan mandatory until early 2012, according to the leaked draft. Environmentalists say that is too late.
"Waiting another year or two before deciding to introduce binding targets simply means more wasted energy and money... and greater risk of lock-in to inefficient technologies," said Erica Hope of environmental group Climate Action Network Europe.
Germany, Hungary and Poland are likely to fall short by more than a third, while France, Spain and Greece will fall short by about a quarter, provisional EU data shows.
The EU as a whole will only achieve a saving of 8.9 percent -- less than halfway to the goal.
The EU has already stipulated that all new buildings constructed after 2020 will have to be virtually carbon-neutral.
But that postpones action for a decade and does not tackle the bulk of existing buildings, which are only refurbished at a rate of 1.2 percent annually.
The Commission's action plan looks set to deal with that by setting a refurbishment rate for public buildings -- about 12 percent of EU building stock -- of 2 percent per year.
"Each refurbishment should bring the building up to the level of the best 10 percent of the national building stock," says the draft.
"Targets for the renovation of existing building stock would be really useful," said Riccardo Viaggi of the European Builders Confederation. "It is a way to start the process."
"But... it should also cover all other buildings, including privately owned, both commercial and residential," he added. "If accompanied by the right financial incentives, that would really get our sector back on its feet."
The Commission's new strategy will also seek to reinvigorate an existing system of Energy Service Companies (ESCOs), which aims to harness the power of the private sector by grouping buildings such as schools and hospitals into sizeable renovation projects.
ESCOs would share the upfront investment in return for a long-term share of the money saved on energy bills. The market for ESCOs has failed to take off, however.
"We need proposals to make the ESCOs work, and particularly the small ESCOs for the residential sector," said Climate Action Network's Hope. "That means ensuring convenience for the consumer and the finance needed for the upfront investment."
Editing by Rex Merrifield and Keiron Henderson