Explanatory Memorandum to COM(2015)341 - Framework for energy efficiency labelling - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2015)341 - Framework for energy efficiency labelling. |
|---|---|
| source | COM(2015)341  |
| date | 15-07-2015 |
1. CONTEXT OF THE PROPOSAL
1.1.Reasons for and objectives of the proposal
On 25 February 2015, the Commission announced in its Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy a review of the Energy Labelling Directive in order to further exploit the potential of energy efficiency for the moderation of energy demand and consequent reduction of the energy dependency of the European Union.
Energy labelling is favourable for the environment because customers can obtain accurate, relevant and comparable information on the energy efficiency and consumption of energy-related products wherever they are in the Union, allowing them to take informed cost-effective and environmentally friendly purchasing decisions that are both good for the environment and save money.
1.2.Consistency with existing policy provisions in the policy area
For 2030 the European Council set in October 2014 an indicative target at EU level of at least 27% for improving energy efficiency which will be reviewed by 2020, having in mind an EU level of 30%. The European Council also set the target of reducing greenhouse gas emission by 40% by 2030.
This proposal follows up on the Energy Union Framework Strategy and intends to replace Directive 2010/30/EU on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products. This proposal is made now following the evaluation of the Directive 1 . Product specific regulations made under the Directive remain in force but will be reviewed.
This initiative is in line with the Union's energy and climate policy as it updates and makes more effective the existing acquis on energy labelling.
1.3.Consistency with other Union policies
Energy efficiency labelling improves the free movement of products by ensuring that no national energy labels are introduced in Member States. This serves to enhance the competitiveness of European companies by encouraging them to innovate, offering a first-mover advantage, ensuring a level playing field with third country manufacturers via increased market surveillance, and allowing an increase in profit margins on energy efficient products that are more expensive at purchase but bring net savings to end-users over the life cycle.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
2.1.Legal basis
The proposal is based on Article 194(2) of the Treaty on the Functioning of the European Union, which is the legal basis for measures on energy. While it would seem possible for Energy Efficiency Labelling to have Article 114 as legal basis (the 1992 Energy Labelling Directive 2 had, in absence of a provision for energy in the Treaty, such a legal basis), there is a risk that this could unintentionally limit Member States legislating on provision of information on energy-related products that may be complementary to the energy label 3 . Energy efficiency labelling is limited to energy and resources in the use phase of the product. Finally, as the Treaty contains a specific energy legal basis it is considered appropriate to use it.
2.2.Subsidiarity
The instruments on energy efficiency adopted at EU level reflect the growing importance of energy as a political and economic challenge and its close interrelation to the policy areas of security of energy supply, climate change, sustainability, environment, internal market, and economic development. Energy efficiency objectives could so far not be sufficiently achieved by Member States alone, and action at Union level is needed to facilitate and support the uptake of activities at national level.
It is essential to ensure a level playing field for manufactures and dealers in terms of the energy consumption information supplied to customers in respect of a particular product that is for sale across the EU internal market. For this reason EU wide legally binding rules are necessary.
As regards market surveillance, this is an activity which is carried out by the authorities of the Member States of the European Union. In order to be effective, the market surveillance effort must be uniform across the European Union otherwise the internal market is undermined and there is a disincentive to businesses that invest resources in designing, making and selling energy efficient products. The creation of a product database will help make market surveillance more effective.
2.3.Proportionality
In accordance with the principle of proportionality, the proposed modifications do not go beyond what is necessary to achieve the objectives set. The modifications introduced by the Regulation to the existing legislative framework will improve its clarity and workability. Suppliers will be required to enter various information into the new product database but this is information which they currently already have to provide to national market surveillance authorities on request, so any additional burden is considered minimal and proportionate to the benefit to enforcement and transparency that the product database is expected to bring. Further discussion of the proposal's proportionality is provided in Chapter 8 of the Impact Assessment.
2.4.Choice of the instrument
The proposed change from a Directive to a Regulation takes into account the Commission's general objective to simplify the regulatory environment for the Member States and economic operators and the need to ensure a uniform application and implementation throughout the Union of the proposed legislation.
3. RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS
3.1.Ex-post evaluation of existing legislation
The Commission carried out an ex-post evaluation of the Energy Labelling Directive and specific aspects of the Ecodesign Directive in a Staff Working Document accompanying this proposal (SWD(2015) 143). The main findings are the following:
1. The ecodesign and energy labelling measures in place are effective in that they bring tangible and substantial energy and cost savings. 4
2. There are no obstacles to the free movement of energy-related products in the European Union internal market.
3. Benefits outweigh the costs, both for businesses and for society as a whole. 5 Energy labelling is a principal driver for innovation, alongside consumer demand and competitive positioning. The more ambitious the requirements are for the top classes, the more they give businesses the opportunity to positively differentiate their products, thereby stimulating innovation.
4. The majority of consumers recognise and understand the energy label, and use it in their purchasing decisions.
5. The introduction of A+ and higher classes under the 2010 Energy labelling Directive reduced the effectiveness of the energy label in motivating consumers to buy more efficient products. 6 Some of the pictograms used to represent other parameters in the label are also difficult to understand.
6. There is a trend towards the purchase of larger products, which are efficient and thus achieve a high energy class, but have much higher absolute energy consumption than smaller appliances of the same type.
7. Weak enforcement by national market surveillance authorities contributes to non-compliance, reducing the envisaged energy savings by an estimated 10%. See also Section 3.
8. Measures for some products have shown levels of ambition that are too low compared to what is technically and economically feasible.
9. Although some measures have addressed environmental impacts other than energy in the use phase, potential for further reduction of such impacts exists. 7
10. In terms of efficiency, the rulemaking process is too long (on average 49 months), sometimes leading to outdated technical and preparatory work at the time of policy decisions, especially for fast developing electronic products.
11. The two Directives are complementary and their implementation is largely done in a coherent way.
12. For a number of products, the lower classes of the energy label are unpopulated, because ecodesign measures have banned low-performing models and manufacturers have responded to technological progress by making ever more efficient products. Without a full A-G comparison the relevance of the label to consumers is undermined.
13. EU-added value derives from the harmonised regulatory framework bringing down costs for manufacturers and making the EU a trendsetter in international regulatory and standardisation efforts.
14. The policy has continued relevance in reaching the EU's energy efficiency target beyond 2020. It can also contribute to resource efficiency and the circular economy.
15. Consumer information remains essential in the digital era. The energy labelling regulations have recently been adapted to show the energy label also on the internet.
16. As regards the contribution of the requirement for advertisements to contain a reference to the energy class (article 4(c)), this effect could not be quantified but the evaluation found that it did address an information failure in the market.
17. The requirements for public procurement (article 9(1)) were already evaluated in 2011 and, as a result were deleted from the Energy Labelling Directive and taken up in modified form in the Energy Efficiency Directive 8 .
18. From media coverage in recent years, it is clear that the benefits of the policy have not been sufficiently communicated.
3.2.Stakeholder consultations
A public consultation ran from 31 August to 30 November 2013 on the ‘Your voice in Europe’ web page. A longer version of the survey targeted interest groups, government bodies and experts whilst a shorter survey targeted consumers and individual retailers and manufacturers. 138 Responses were received to the longer survey, of which 58 from manufacturers and their interest groups, 20 from government bodies, 13 from environmental interest groups and 9 from consumer interest groups. 197 Responses were received to the shorter survey, of which 127 from consumers, 40 from retailers and 30 from manufacturers. A detailed summary of the respondents and responses was published in February 2014 9 .
Three stakeholder meetings were organised: on 27 June 2013, 14 October 2013 and 18 February 2014. In conjunction with the last contractors' meeting, the Commission organised a stakeholder meeting on 19 February 2014 on the results from testing a preliminary set of energy label designs and the proposed energy label designs for further testing.
3.3.Collection and use of expertise
Two studies were specifically commissioned to prepare the review:
– A study concerning the evaluation of the Energy Labelling Directive and specific aspects of the Ecodesign Directive, completed in June 2014;
– A study on the impact of the energy label – and of potential changes to it – on consumer understanding and on purchase decisions, completed in October 2014.
Both studies were published on the Commission's Europa website 10 .
3.4.Impact assessment
The Impact Assessment (SWD(2015) 139) accompanies this proposal and is published on the Commission's Europa website 11 together with the favourable opinion of the Regulatory Scrutiny Board (SEC(2015) 323) adopted on 16 June 2015.
As a follow up to the above mentioned evaluation, the impact assessment looks at both a number of issues with the current Directive and some specific items concering the Ecodesign Directive. It favours no legislative follow up for the latter at this stage.
The two most important issues concerning the Energy Labelling Directive were reduced effectiveness of the energy label and non-compliance due to weak enforcement. Long rulemaking processes, leading to outdated technical and preparatory work, were also identified.
The final option chosen was to improve the existing regulatory framework on energy labelling, to require labelled products to be registered in a new database, improve the legal structure by changing the current Energy Labelling Directive to a Regulation, to align it with the market surveillance regulation 12 , and to fund EU joint market surveillance actions.
This proposal implements the legislative part of the option selected in the Impact Assessment. Further non-legislative actions planned to implement that option are outlined in the Report to the European Parliament and Council accompanying this proposal.
3.5.Regulatory fitness and simplification
The positive impact on revenues (estimated to be €34 billion/year in 2030) affects larger businesses, SMEs and micro sized enterprises in the same way. A different regime for micros/SMEs cannot be justified. All retailers should be subject to the same rules, as energy labels are only useful for consumers if all products are labelled in all retail outlets. Few SME manufacturers are impacted and no micros. The same rules should apply to all to ensure fair competition in the single market and coherent and consistent information to consumers. Consumer savings are estimated at € 10-30 billion / year in 2030 (depending on assumptions on future development of energy prices).
The competitiveness of EU companies is enhanced by encouraging them to innovate, offering a first-mover advantage, ensuring a level playing field with third country manufacturers via increased market surveillance, and allowing an increase in profit margins on efficient products that are more expensive at purchase but bring net savings to end-users over the life cycle.
In terms of administrative costs the total cost for dealers to replace all labels on all products is estimated at 10 million euro over a period of ten years for the EU as a whole. For manufacturers the costs are estimated at 50 million euro over a period of ten years. Together that means a cost of 2 eurocent per labelled product sold. The administrative costs for registering products are estimated at 1.5 million euro per year for the entire industry; about 0.5 eurocent per product sold. The actual cost as a result of requiring registration of products will in fact be less or zero, because manufacturers are no longer required to keep technical documentation available for market surveillance authorities for five years after the last product was manufactured.
Manufacturers and dealers can pass these administrative costs on to consumers, for whom they are more than offset by the energy savings of the more efficient products they buy as a result of the Regulation.
The proposal is Internet ready as it includes the setting up of an online product database, which will simplify, accelerate and enhance the transmission of product information between manufacturers, retailers, market surveillance authorities and the final consumer.
4. BUDGETARY IMPLICATIONS
This proposal replaces an existing Directive on energy labelling and the administrative impact and costs to the Member States is therefore estimated to be moderate as they already have the majority of the necessary structures and rules in place.
This initiative does not require additional EU budgetary resources. The costs of setting up a products database (1.500.000 EUR in 2016 and 150.000 EUR yearly maintenance cost in subsequent years) and for consumer understanding studies for labels for specific product groups (300.000 EUR per year from 2017) are financed through reprioritisation of existing budget for the implementation of the policy on energy efficiency of products which includes technical assistance and/or studies to assess aspects of product groups necessary for delegated acts and support to standardisation. This budget falls under the market uptake and innovation parts of the societal challenges of Horizon 2020.
5. OTHER ELEMENTS
5.1.Monitoring, evaluation and reporting arrangements
The next evaluation of the Energy Labelling framework is foreseen in 8 years. It should build on the ex-post evaluation in product-specific studies reviewing delegated acts adopted under this framework, and it should evaluate the effectiveness of the framework in ensuring the free movement of goods (e.g. Did the Member States refrain from proposing national energy labelling legislation for products?). The reduction of energy consumption and other significant environmental impacts of products should be assessed, especially with regard to improvements achieved in the rate of market transformation by rescaled labels. Improvements in the rate of market surveillance and of compliance thanks to the product database can be assessed through reporting by Member States on the result of market surveillance under the market surveillance regulation.
5.2.Detailed explanation of the specific provisions of the proposal
In the proposal, the objectives and main principles of the current Energy Labelling Directive are retained but the proposal clarifies, strengthens and extends the scope of the current Directive's provisions by:
• Updating the label and allowing for rescaling
• Improving enforcement
• Creating a database of products covered by energy labelling obligations
• Making clearer the obligations of the various parties
• Improving the link between energy labelling and measurement standards
Contents
The success of energy labelling in encouraging the production of ever more energy efficient products, means that the label is running into its limits. For many product groups, most models are now in the top energy classes, making it difficult to distinguish between models. Although A+ to A+++ energy efficiency classes were added in 2010, for some product groups, all models are already in those new classes and there are no longer any models in the lower classes.There is a systematic need to rescale products and to go back to the original A to G energy label scale, which studies suggest is the one best understood by consumers. Although the current Directive allows for the possible reclassification of products through specific delegated acts, the current proposal deals with the need to rescale the energy labels in a much more systematic manner. It also makes clear the obligations on supliers and dealers during the rescaling and replacement phase.
The existings labels will be reviewed by the Commission within five years of the entry into force of the Regulation, with a view to rescaling them. The product groups to be addressed first will be those where products on the market are concentrated in the top classes. Rescaling itself would take place several years after the date of the review.
Rescaling requires a transition period during which old (before the rescaling) and new rescaled labels for the same products would both be present in shops. To minimise any risk of confusion for consumers, reduce compliance costs and ensure maximum legal certainty for suppliers and dealers, the following approach is envisaged in the draft Regulation:
1. A delegated act for the rescaled label would be published and come into force 20 days later (as is already the case). The delegated act would set the energy requirements so that no products currently on the market would fall into the top energy classes, to encourage technological progress and innovation and enable ever more efficient products to be recognised. The delegated act would contain a specific date by which the old labels would have to be replaced with the rescaled label (the 'replacement date').
2. For a period of six months after the coming into force of the delegated act but before the replacement date, suppliers would put the rescaled label in the box with the product, along with the existing label.
3. At the replacement date, dealers would be required to replace the old label with the new one on all products on display in shops. They would have one week to replace all labels with the new ones.
4. For products that were already in the shop before the 6 month transition period started, dealers would have to obtain a new label from the supplier (it could also be made available on-line for download from the suppliers' websites).
5. Member States would be required to run promotional information campaigns to inform consumers of the rescaling exercise.
This approach is intended to reduce as much as possible the coexistence of the old and new labels on products of the same type displayed in shops, making rescaling as practical as possible, which in turn increases the effectiveness of the label, saving energy and costs for consumers. It does not require substantial change compared to the current system in terms of the main distribution mechanism of the label, which has proved to work so far.
5.2.2.Improving enforcement by creating a database of products covered by energy labelling obligations
In terms of enforcement, overall non-compliance in the market is estimated at 20%, leading to some 10% of envisaged energy savings being lost. This weak enforcement results (at least partly) from the difficulty national market surveillance authorities have in accessing technical documentation in a timely manner and is exacerbated by a lack of clarity on different model numbers used for the same model in different Member States. The new product registration database will allow market surveillance authorities much quicker access to the necessary information.
In addition, a product database will provide up-to-date market data and energy efficiency information which will accelerate the preparatory/review studies and subsequent regulatory process, thus shortening the current long regulatory process for delegated acts.
The need for a registration database seems strong in the case of the Energy Labelling Directive, as energy labels mainly cover domestic appliances where the impact of the lack of sufficient market surveillance is more prevalent and the number of equivalent models is larger.
In addition to addressing the weaknesses of the current system, the database could in future also be used for new ways of distributing energy labels to dealers, since energy labels and rescaled labels would be available in such database. The proposal also updates the Directive's requirements in terms of providing for electronic supply of labels or for suppliers to make them available on their websites.
Compared to the existing product information requirements on suppliers, the product registration database only creates the new obligation to register the product model by uploading information that, under the current system, is already required under the different delegated acts.
The adminstrative burden for registering products is estimated at 1.5 million euro per year for the entire industry; about 0.5 eurocent per product sold. The actual cost will in fact be less or zero, because suppliers are no longer required to keep technical documentation available for market surveillance authorities for five years after the last product was manufactured. At present, market surveillance authorities have to request the technical documentation from suppliers, and dealers have to contact suppliers to obtain labels if they need one for some reason. The database will keep both the technical documentation available for market surveillance and the labels available for dealers in a central location.
The proposal regroups the respective obligations on Member States, suppliers and dealers in order to make these more coherent and simpler.
The replacement of the Directive with a Regulation means less administrative burden for Member States (although they will still need to remove from their national law measures taken to transpose Directive 2010/30/EU) and directly applicable requirements for suppliers and dealers which will ensure a complete harmonisation across the EU.
The proposal makes clear that a product which complies with the measurement and calculation methods set out in the relevant harmonised standard will be presumed to comply with the relevant provisions of the applicable delegated act.