The Energy Efficiency Movement (EEM) has called attention to the urgent need for the European Union (EU) to detach itself from volatile energy markets to strengthen its industrial competitiveness.

Mike Umiker, the Executive Director of EEM, stated that internal barriers to industrial energy efficiency must be addressed, as many companies face difficulties due to fluctuating energy prices within the broader context of economic uncertainty.

A report released by EEM identified that while some companies are aligning their energy strategies with shifting economic trends, inconsistent political frameworks often disrupt energy policies where climate initiatives can be reversed by new administrations.

Umiker emphasized that energy efficiency represents an indigenous resource for Europe, which not only mitigates dependence on energy imports but also enhances industrial resilience.

He pointed out that energy efficiency is crucial to achieving net-zero targets and serves as a pathway to maintaining competitiveness for businesses.

Furthermore, he noted that the industry is well aware of the benefits of energy efficiency; however, decision-makers require a pragmatic approach based on data for effective implementation.

Amid these challenges, misconceptions regarding the EU’s Energy Efficiency First principle persist.

Dr. Tim Mandel from the Fraunhofer Institute highlighted three prevalent misconceptions while discussing the principle with stakeholders.

First, he dismissed the notion that the principle is merely a political phrase, citing the recast Energy Efficiency Directive, which mandates member states to account for efficiency options in their National Energy and Climate Plans (NECPs).

Mandel also clarified that the principle does not suggest a blanket prioritization of energy efficiency over renewable resources or grid developments.

Instead, he explained, its application is based on a cost-benefit analysis that considers societal benefits such as climate, health, and security; if a new power grid demonstrates higher value, it may proceed irrespective of additional efficiency measures.

Additionally, he contested the belief that implementing this principle leads to increased costs, referencing studies that indicate energy efficiency solutions often lower total system expenditures by reducing infrastructure needs and eliminating fuel imports.

Umiker pointed out a significant barrier to the adoption of energy efficiency in industries: a lack of strategic courage to prioritize these initiatives despite available funding, technology, and expertise.

He highlighted that decisions surrounding energy efficiency often focus on short payback periods, which can hinder larger operational shifts towards efficiency improvements.

The European Climate Neutrality Observatory (ECNO) noted that the EU is still not meeting its 2030 energy efficiency targets, falling short by an amount equivalent to Belgium's annual energy consumption.

To address these shortcomings, experts advocate for stronger support from the European Commission in holding member states accountable for implementing energy efficiency measures, including comprehensive renovation plans.

ECNO representatives underscored the importance of supporting the Energy Taxation Directive to phase out advantages granted to fossil fuels.

In an effort to enhance investments in energy efficiency, the European Commission is exploring mechanisms such as an EU-wide white certificate scheme.

However, there are concerns regarding the potential misdirection of investments away from sustainable solutions towards slightly improving fossil fuel systems.

Eike Velten from ECNO argued the importance of focusing on clean, long-term energy efficiency measures, such as electrification and renewable energy usage, highlighting the necessity of robust policy direction, effective incentives, and rigorous implementation.

Umiker noted the pivotal role that public procurement can play in facilitating energy efficiency investments.

While the majority of funding will come from the private sector, the public sector's involvement is critical in creating strategic public-private partnerships that can align goals and share risks.

Through their purchasing power, governments can establish new energy efficiency standards, steering the market towards enhanced energy resilience and industrial competitiveness.

This emphasis on energy efficiency is further amplified by current geopolitical contexts, as enhancing energy efficiency is viewed as a key strategy for reducing dependence on external energy sources, particularly in light of the EU's objectives outlined in the REPowerEU plan.