EU aims ‘simplification’ sledgehammer at green energy laws

BRUSSELS — The European Commission is considering revising landmark energy legislation as part of its drive to ease requirements on the EU’s struggling businesses, according to several people familiar with the plans.

The EU executive has vowed to slash red tape for its ailing firms, which are facing stiff competition from global rivals along with a flagging economic outlook and a looming threat of tariffs from the U.S. Last month Brussels proposed cuts to green reporting rules and exemptions for most firms from an upcoming carbon border levy.

Now the Commission is also considering targeting green energy policies. In particular, the EU executive has set its sights on rules meant to slash energy consumption, two of the people said. It is also exploring whether to reopen laws on renewable energy and green renovations. 

The new push comes amid growing criticism of Brussels’ European Green Deal, which aims to make the bloc climate-neutral by 2050. Businesses and right-leaning politicians argue the package is too burdensome, given other pressing economic concerns.

Under fire in particular is the EU’s revamped Energy Efficiency Directive, which requires that the bloc slash 11.7 percent of its energy consumption by 2030 (compared to 2020).

BusinessEurope, the bloc’s biggest industry association, has argued that requirements under the law to conduct energy efficiency “audits” resemble existing obligations for companies that must pay for carbon emissions, increasing unnecessary administrative work for businesses.

The double reporting is “stupid,” said Isabelle Chaput, secretary general at IFIEC, a lobbying group representing energy-intensive industries. The energy efficiency target should simply be made voluntary, she added.

The law needs a “reality check,” Chaput said. 

Efficiency overdrive

The private sector complaints aren’t universally shared. Lawmakers who helped forge the fiercely fought-over legislation are warning against reopening it.

They’re concerned not just about the energy efficiency law but also about a potential revamp of the EU’s Renewable Energy Directive, which requires that 42.5 percent of energy consumed in the bloc come from renewable sources by 2030.

Additionally, they’re wary that the Commission is scrutinizing the Energy Performance of Buildings Directive, which requires countries to make homes 16 percent more energy efficient by 2030.

Reopening the buildings directive would be “a clear win for [Russian President Vladimir] Putin,” said Ciarán Cuffe, a former Green MEP who helmed the file through the European Parliament. The law “will improve the EU’s energy security and is a hugely important part of our climate ambition,” he added.

Nicolás González Casares said he worries revising the rules will imperil “the deployment of renewables” across the EU. | Martin Bertrand and Hans Lucas/Getty Images

Nicolás González Casares, a center-left MEP who led work on the renewables law for the Socialists and Democrats group, said he worries revising the rules will imperil “the deployment of renewables” across the EU. 

EU countries, too, have mixed views on reviving the sensitive discussions.

“Scrapping some reporting and administrative burden would be good,” said one EU diplomat, who was granted anonymity to speak freely. “The level of detail that needs to be reported is sometimes insane.”

But others disagree. “I would be very concerned,” about efforts to reopen the texts, said a second EU diplomat. Since capitals are “in the middle” of transposing them into national law, doing so “would be extremely counterproductive,” the person added, slowing their enforcement.

Beyond logistical difficulties, overhauling the laws could make it “more difficult” to reach the EU’s target of slashing emissions by 55 percent this decade, said Mats Engström, a senior policy fellow at the European Council on Foreign Relations. 

Given the larger number of right-leaning MEPs in the Parliament who oppose stringent climate legislation, he added, “there are big political risks” involved, including ultimately “a significant weakening that goes further than what the Commission proposes” once it reaches lawmakers.

That also extends to EU country negotiators. “Let’s address this wisely,” warned a third EU diplomat. “I’m just afraid we’ll get this shoved down our throats,” the diplomat argued, creating “an impossible discussion” among capitals.

Brussels has set a provisional date of May 21 to present its proposed revisions, one of the people familiar with the matter said. The Commission declined to comment on its plans.