On Thursday 14th June 2012, negotiators from the European Parliament, Commission and Council reached agreement over the terms of the draft Energy Efficiency Directive (“the Directive”). The Directive seeks for the first time, to set legally binding measures across the 27 member states to enforce energy savings. The Directive will go before the European Parliament for final approval in September.

The Directive is related to the EU energy target set at an EU summit in 2007, where it was agreed that the EU would seek to reduce greenhouse gas emissions by 20% within 13 years. Recent reports have suggested that measures put in place to-date would only result in a 9% reduction.  The Directive is seeking to improve the chances of reaching the 20% target, although some believe that as a result of changes to the terms of the Directive since the initial proposals, the obligations imposed under the Directive are only likely “close the gap” by achieving a 15% reduction in total. Despite the Directive (in its current form) being viewed as “watered down”, it has been heralded by Martin Lidegaard - the Minister of Energy and Climate for Denmark - as a “major step forward”.

The core of the Directive is an obligation on energy suppliers to help their customers use less energy. In order to comply with this obligation, a number of changes will need to be put in place in the EU (including Denmark) to reduce the amount of energy used by customers. Danish industry and the energy sector will need to share responsibility so that buildings inhabited and products used are more energy efficient. By way of an example, the industrial engineering sector will need to focus on the following:

  1. existing buildings will need to be renovated, and regulations for new buildings will need to be more stringent so that they are insulated sufficiently (reducing the loss of heat), which will improve their energy efficiency;
  2. energy efficient appliances will need to be produced, this will mean technology evolving to meet the demand of the customers which will require innovation and manufacturing;
  3. transport will need to be improved in order to reduce carbon dioxide emissions; and
  4. other measures will need to be taken in order to improve the energy efficiency of buildings (thus reducing the energy consumed), for example, the production and installation of smart meters (monitoring the energy consumed) and eco-design boilers.

Ulrich Bang - the director of European affairs at the Danish Energy Association - has stressed the importance of technology development and advice, showing that the industrial engineering sector will play a key part in assisting energy utilities reduce the amount of energy sold to customers, by reducing customers’ energy consumption. The work required within the sector in the future, in order to meet the demands of the EU, is sure to create many jobs in the industrial engineering sector, which will contribute to the improvement of the Danish economy.