June 14, 2012 / 11:26 AM / 6 years ago

UPDATE 2-EU agrees on law to enforce energy saving

* Deal should raise energy saving to around 15 percent

* Transport savings could add another 2 percent

* Spain, Portugal, Finland vote against-EU sources (Updates with diplomatic approval, reaction)

By Barbara Lewis

BRUSSELS, June 14 (Reuters) - The European Union reached agreement on Thursday on a law to require governments and utilities to improve energy efficiency and lower the bloc’s consumption of fuel.

For the first time, it sets binding measures across the 27-member states to enforce energy savings, although critics say its original ambition was drastically reduced over the course of negotiations.

“This is a big step ahead. For the very first time we have legally binding energy efficiency measures,” Energy Commissioner Guenther Oettinger said.

“The measures will reduce our energy bill while generating further growth and jobs. They stimulate investments and make our energy-using products more efficient.”

Original proposals from the Commission and the European Parliament had aimed to cut energy use by 2020 by 20 percent of projected levels.

The 20 percent goal was one of three green EU energy targets set in 2007 and was the only one that was not binding. Without the Energy Efficiency Directive, the EU was expected to meet only about half of the target.

A final round of talks, which began late on Wednesday, forged a deal that is more likely to put the bloc on course for roughly 15 percent savings in energy, excluding transport. Increased savings in transport through more efficient cars, for instance, could deliver another 2 percent.

Diplomats endorsed the deal on Thursday, with only Spain, Portugal and Finland voting against. It now has to be get final approval from ministers and the European Parliament.

Advocates of the law say it is enough to help change the status quo to the benefit of consumers’ and nations’ budgets.

“We are changing the business model. The future business model of energy companies would also be energy efficiency service business. This is about a cultural business model change and that is why the fight is so brutal,” said Claude Turmes, a Green member of the European Parliament, who has led the parliamentary contribution to the legislation.

The Danish presidency, with backing from the Commission, made energy efficiency a priority for its six months at the head of EU debate, which concludes at the end of this month.

Denmark, which has a strong domestic commitment to energy saving, has argued that lowering consumption to curb reliance on imported oil and gas can play a major part in tackling EU debt, as well as creating jobs in building renovation and limiting greenhouse gas emissions.

The Commission has cited figures that the EU spent 573 billion euros ($721.8 billion) on imported fossil fuels in 2011.

MONTHS OF HAGGLING

Opponents argued the Energy Efficiency Directive could hobble growth and that there is no money available for the upfront spending required to bring about the longer-term savings.

Member states devoted months to negotiating opt-outs that weakened the law’s central article, designed to make utilities ensure energy savings are equal to 1.5 percent of annual sales.

Campaigners and analysts said all the haggling meant it would deliver closer to 1 percent.

British Secretary of State for Energy and Climate Change Edward Davey said Britain had sought to ensure the directive promoted “practical and cost-effective action” and struck the right balance between prescription and flexibility.

“It signals a step-change in energy efficiency, and for the first time sets legally binding energy saving targets, which at a time of economic challenge will help improve the EU’s competitiveness and boost growth,” he said in a statement.

Campaign groups were relieved a text had been agreed, although disappointed at the erosion in ambitions.

“A seemingly win-win directive to reduce fuel bills, cut oil and gas imports and carbon emissions has been significantly watered down by some short-sighted member states,” Brook Riley, climate and energy campaigner for Friends of the Earth, said.

From the business community, those working in energy savings measures said it helped to provide some certainty.

“Of course, they could have gone much further, but the measures agreed will at least start to give the business community the regulatory guarantees they need to help private investment flow,” Tony Robson, chief executive of Knauf Insulation and chairman of the European Alliance to Save Energy, said.

$1 = 0.7939 euros Editing by James Jukwey and Jane Baird

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