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EUR 8bn available for energy efficiency in Europe

20 January 2011, 16:40 CET
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Energy efficiency is the quickest and most cost-effective way to create jobs in green industries, improve energy security and reduce emissions. Improving homes also improves the health and happiness of inhabitants. The payback period – the time before the savings are greater than the initial investment – is usually only a few years. However, most governments and individuals are short of money for investment at present. Therefore, it is very surprising that there is substantial money available from the EU for energy efficiency work, which has not been claimed.

The money is part of the EU’s Cohesion Fund. This is for countries whose national income for each inhabitant is less than 90% of the EU average, which covers 15 of the 27 member states: Bulgaria, Cyprus, the Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia and Spain. The money can be spent on transport or environmental programmes. Energy efficiency work is funded under the environment heading (as can support for renewables). Countries are permitted to allocate up to 4% of their Cohesion Fund money to energy efficiency.

This could provide €8 billion for energy efficiency work in residential buildings. However, only just over €200 million of this has been claimed. (See EurActiv: Nearly €8bn of EU energy savings fund lies unclaimed.)

This does not mean that the money is just sitting in a bank. It is being used for other programmes, including transport ones which, unlike energy ones, do not have to meet any environmental criteria, so very often involve new motorways.

A coalition of NGOs (Friends of the Earth Europe, the European Environment Bureau, Birdlife International, WWF, CEE Bankwatch, Transport and Environment, and Conservation International) published a good report last November. Called Changing Perspectives: how the EU Budget can shape a sustainable future, this analyses how money is currently misspent and recommends a new approach under which all spending would be assessed for climate and other environmental impacts. Among the specific recommendations are:

  • Every transport project supported by the EU funds should contribute to the reduction of greenhouse gases, with a strict conditionality based on a climate impact assessment of the investment.
  • Aviation must not be granted further European funding.
  • The EU should support no untolled highways.

(See Changing perspectives: How the EU Budget can shape a sustainable future.)

The EU budget represents only a small proportion of EU GDP, but is still a lot of money, capable of achieving a lot of good things or, as at present, doing a lot of harm. The discussion about the budget from 2014 onwards will dominate EU politics throughout this year.

By Stephen Tindale

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Climate change is the most serious issue ever to have faced humanity. Rightly, it is now high on the public, political, media and business agendas. However, too much of the discussion is still about what we should not be doing or what we should be against. There is not enough discussion or information on solutions - what we can and should do to minimise dangerous climate change, and what should be done to make us not only safer and more secure, but also richer and happier.


Stephen Tindale photoStephen Tindale (writer and co-founder) is a climate and energy consultant, who has worked on climate change for the last 20 years. His current portfolio includes work for npower renewables and for the Centre for European Reform. He is also a Visiting Fellow at the Policy Studies Institute. Stephen lives in London.