From the smallest smart thermostat to complex power management systems to maximise demand-side flexibility, the enabling technologies needed to achieve rapid improvements in energy efficiency already exist and European companies are leaders in many of them. So what is holding Europe back from achieving our energy efficiency potential?
Energy efficiency first has never been a more pertinent principle than today. While much of the focus since the Russian invasion of Ukraine has been on securing energy supply, reducing demand is recognised as the critical other side of the equation. Moves are afoot to raise the EU’s current energy efficiency targets, and rightly so. How efficiently we use energy will determine to a large extent how successful we are at reducing our dependence on imported fossil fuels.
The good news is that energy efficiency is the low hanging fruit of the energy transition: the technologies needed exist and European companies are leaders in many of them. Orgalim’s Technology in Action case study series features practical examples of how European companies are driving energy efficiency today – whether that’s through advanced manufacturing technologies for efficiency in industries, digital solutions to manage EV car charging loads, or ultra-efficient electric motors, to name but a few.
So how do we massively accelerate the uptake of these technologies, and hundreds more like them, to achieve our energy efficiency goals?
HELP, NOT HINDER, ACCESS TO FINANCE
Sustainable finance is key and the EU taxonomy a powerful tool to drive investments to these technologies, but only if it explicitly recognises them as contributing. Unfortunately, too many of the enabling technologies for energy efficiency are not included in the taxonomy – at least not yet – and therefore investment in them is actually being dis-incentivised.
Take the example of electric motors already mentioned. There are about 8 billion electric motors in use in the EU, consuming nearly half of all the electricity the EU produces. They are everywhere: in heating, ventilation and cooling of buildings, in every production line in every industry, for operating wind power, for powering cars, buses, bikes, washing machines and vacuum cleaners.
Altogether, it is estimated that we can achieve energy savings of 110 terawatt hours and 40 million tonnes of avoided CO2 emissions in Europe by 2030 by using more energy efficient electric motors. But electric motors are not currently identified in the EU taxonomy as substantially contributing to climate change mitigation or adaptation.
The same goes for many digital technologies, like the so-called digital twin. Using a digital twin in industrial applications can radically improve energy efficiency by enabling predictive maintenance, thus reducing wastage and prolonging the life of assets. And yet these digital twin technologies are not yet in the taxonomy.
And all this is just the tip of the iceberg. There is a whole range of industrial automation technology, machinery and electrical equipment, and digital technologies that enable industrial decarbonisation and that are not yet fully recognised in the taxonomy today.
UNLEASH THE GREEN TRANSITION
There is no shortage of actionable and expert guidance on how to improve energy security and efficiency in Europe today, from the IEA’s 10-point plan to the BPIE’s ”Action plan to save energy now” to, of course, the European Commission’s own comprehensive REpowerEU initiative. In the end, almost all of them come down to money.
We know that, to achieve its Green Deal ambitions, the EU needs to increase annual investments by around €520 billion per year in the coming decade. The Commission acknowledges that the bulk of this will need to come from the private sector.
The EU taxonomy is a powerful tool for steering this investment, but it is currently steering funds away from some advanced industrial technologies that are critical for the green transition. Correcting this distortion in the upcoming delegated acts would do much to unleash our ability to achieve greater energy efficiency and a green, just and resilient future for Europe.
- Orgalim’s Position Paper on the proposal for revising the Energy Efficiency Directive.
- Orgalim’s Position Paper on the EU taxonomy for sustainable activities
- EU taxonomy: ‘roadblock’ or enabler of the green technologies?
- Orgalim’s Technology at Heart series
- Orgalim’s Policy Exchange virtual event on Sustainable Products and Digital Product Passport
About the author:
Malte Lohan is the Director General of Orgalim, Europe’s Technology Industries, speaking for innovative companies spanning the mechanical and electrical engineering, electronics, ICT and metal technology branches. Together they represent the EU’s largest manufacturing sector, generating annual turnover of over €2 000 billion, manufacturing one-third of all European exports and providing 11 million direct jobs. He is responsible for setting Orgalim’s strategy, acting as the senior representative of the European technology industries in Brussels and managing the operations of the association.
Disclaimer: This article is a contribution from a partner. All rights reserved.
Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use that might be made of the information in the article. The opinions expressed are those of the author(s) only and should not be considered as representative of the European Commission’s official position.
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