On Tuesday 2 July, the Bruegel think-tank published a policy paper written by Ugnė Keliauskaitė, Ben McWilliams, Giovanni Sgaravatti and Simone Tagliapietra. This document examines the Energy Performance of Buildings Directive (EPBD) targets (see EUROPE 13390/20) and the introduction of a new Emissions Trading System (ETS 2) and the solutions for achieving them.
By 2030, the EU must reduce emissions from buildings by 13%, requiring an increase in the decarbonisation rate of almost three times. To achieve the EPBD targets, an additional annual investment of €150 billion is required.
ETS 2, scheduled for 2027, will impose emission quotas on fossil fuel suppliers, raising energy prices for consumers. This measure aims to encourage energy renovations by making fossil fuels more expensive.
However, without appropriate financial support, this could lead to a similar rise in energy costs for households as in 2022.
To meet these requirements, Bruegel proposes financial and regulatory solutions. Subsidies should target the worst performing buildings, often occupied by vulnerable households, using the EU’s recovery and resilience funds, providing around €12 billion a year until 2027.
Bruegel also suggests preferential low-interest loans to encourage private investment backed by public guarantees. It seems essential to adjust energy taxation by increasing taxes on fossil fuels and reducing those on green electricity. The creation of one-stop shops would simplify administrative procedures for consumers.
To read the publication: https://aeur.eu/f/cxu (Original version in French by Nithya Paquiry)