The EU's industrial competitiveness is increasingly tied to the challenge of navigating volatile energy markets and reducing supply dependencies, according to Mike Umiker, Executive Director of the Energy Efficiency Movement (EEM).

In a recent report published in May, EEM outlined pathways for overcoming internal barriers to energy efficiency in industry, revealing that many companies struggle amid fluctuating energy prices and an uncertain macroeconomic environment.

Umiker pointed out that energy efficiency can serve as a competitive advantage for businesses, with many aligning their energy strategies with broader economic trends.

However, he noted that political shifts often lead to inconsistent energy policies, undermining climate measures as new governments reverse previous policies.

"Energy efficiency is Europe's homegrown resource; it reduces import dependencies while strengthening industrial resilience," Umiker stated.

He reinforced the argument that energy efficiency is crucial not only for achieving net-zero goals but also for enabling competitiveness within the industry.

"The industry is already aware of the benefits of energy efficiency; what it requires is a data-driven, pragmatic pathway towards implementation," he stated.

Despite widespread recognition of these benefits, misconceptions persist regarding the EU’s Energy Efficiency First principle.

Dr. Tim Mandel, a research associate at the Energy Systems Department at Fraunhofer ISI, identified three primary misconceptions that frequently arise in discussions with consultants and government officials.

The first misconception is the notion that the Energy Efficiency First principle is merely a political slogan.

Mandel explained that, under the recast Energy Efficiency Directive, member states are required to systematically consider efficiency options in their National Energy and Climate Plans (NECPs) and can have investment plans rejected if they do not meet these requirements.

Another misconception is the belief that energy efficiency always takes precedence over renewable energy and grid development.

Mandel clarified that the principle prioritizes energy efficiency when it yields greater societal value, as illustrated by cost-benefit analyses that can show new power grids may take precedence over additional efficiency measures when significant benefits are identified.

Moreover, Mandel addressed concerns that the implementation of the principle would result in higher costs.

He referred to various studies that demonstrate energy efficiency solutions tend to reduce overall infrastructure needs and avoid fuel imports, thus lowering total expenditure.

Umiker also highlighted that a significant barrier to the adoption of energy efficiency practices in companies is a lack of courage to invest, despite the availability of funding and technology.

He emphasized that the knowledge for implementing energy efficiency strategies is available, but businesses need the willingness to make bold decisions and embrace risks to prioritize efficiency.

The EU is currently falling short of its 2030 efficiency targets by an amount equivalent to Belgium’s annual energy consumption, prompting calls for more effective implementation of existing policies.

Eike Velten, an expert from the European Climate Neutrality Observatory (ECNO), stated that the European Commission should be proactive in ensuring member states adhere to national energy efficiency measures, emphasizing the necessity of supporting the adoption of the Energy Taxation Directive to eliminate benefits for fossil fuels.

Velten mentioned that the Commission is exploring options like an EU-wide white certificate scheme aimed at enhancing investments in energy efficiency.

However, she cautioned against the risks of misdirected investments, arguing against funding fossil-based solutions that merely enhance efficiency rather than transition to clean energy sources.

Alongside these discussions, Umiker asserted that while private sector funding will primarily drive investments in energy efficiency, the public sector plays a pivotal role by creating strategic public-private partnerships that mobilize capital.

He highlighted the importance of public procurement in establishing new energy efficiency standards and influencing market direction.

Niels Fuglsang, a Member of the European Parliament, underscored the urgency of reducing energy consumption as part of the EU’s REPowerEU initiative to diminish reliance on Russian gas.

He expressed concern that energy efficiency solutions tend to be overlooked in discussions about future energy strategies.