What will the new EU energy label look like?

From 14 July 2016 (we’re migrating the best of our blog from coolproducts.eu)

Europe is closer to a refreshed A-G energy efficiency label on TVs, fridges and other goods than ever before. Last week the European Parliament put its cards on the table and today negotiations with member state representatives begin.

The political battle lines are important, with real threats of homes locked to fossil fuel heating to as late as 2030; clean tech strangled by incumbent players; useful information blocked from consumer ads; and much-needed government enforcement measures rejected.

Here we sum up the good and the bad of the Parliament and government positions now being thrashed out ahead of a final deal expected by October.

The good

Quick reform ahead of Brexit

The European Parliament’s green light for reform last week means progress can be made before the European institutions are drawn into messy Brexit issues. Consumer and green groups celebrated as MEPs voted through a package of reforms that will eliminate confusing + grades and return the label to a clear A-G scale within 5 years for most products. Appliances badly in need of a refreshed label will get one within 21 months, including TVs, fridges, washing machines and light bulbs. Parliament sensibly resisted moves by some conservatives to send the reform package back to the drawing board, notably German EPP member Herbert Reul.

Eyes wide open

Europe is the only advanced region not to have a product database giving lawmakers accurate, up-to-date and accessible information they need to set and enforce the energy standards that underpin the label. Today, officials have to chase company data or buy it at high cost. Parliament wants an EU database by 2018, one with free public access that will be a real boost to apps and websites advising consumers on energy efficient products. It wants governments to get a grip on the estimated €10 billion worth of energy savings lost by consumers and businesses each year from firms dodging EU rules. Every EU country should draw up and finance an enforcement plan, then share intelligence with other governments without delay, it decided. Consumers should also be able to return without charge non-compliant products, Parliament decided, adding real financial bite to government inspections that today typically end with small fines for manufacturers.

Stephane Arditi spells out the situation for parliamentarians just ahead of the vote

The bad

Consumers locked to fossil fuel systems

MEPs protected fossil fuel interests by ensuring that confusing + grades remain possible on the energy label for heating appliances to as late as 2030. This is by far the most important product group in terms of household energy consumption. Equipment is expensive and lasts a long time, so a bad choice can lock people to polluting fuels for a decade or more. A review of the label chalked for 2018 has been pushed back to 2024. The process will take years to finalise and the label could suffer from confusing + grades to 2030. All that time, gas heating equipment will keep an A rating on the energy label, boosting sales of fossil fuel systems. Green MEPs were enraged at the hand-out, and clean energy manufacturers of super efficient heat pumps, solar-based heating and combined heat & power units were not pleased either. Heat pump industry paper here. Their fossil fuel competitors argue that demoting their best products from an A to a C or D label rank will result in people keeping dirty old heaters rather than buying more expensive, super efficient heaters that truly deserve the highest label rating. They conveniently forget that when condensing gas boilers were still an innovative technology, they benefited from similar aid — promotion and support at national level that mainstreamed their products and reduced their price. That industry must not now smother the next generation of clean technology by starving it of the same nourishment. The label should be technology neutral and reward those risking capital developing super-efficient heating products. While we’re on transparency, there should be no splitting of products into two labels merely to artificially protect inefficient technologies, as is the case today with air conditioning appliances. Some manufacturers resist calls for reform, saying that the heating equipment label was created new last year. They skate over the fact that even if a review was started tomorrow, it would still be at least 5 years before the new label actually appeared in shops. We say heating products should get the same treatment as all the rest: refreshed within 5 years.

Eyes wide shut on when to refresh a label

Today, most models of TVs, fridges and washing machines are packed into the top classes of their out-of-date and ineffective energy labels. These labels will be fast tracked for revision to correct the situation. To prevent it happening in future, MEPs decided that when 25% of models on the market reach A class, or when half are A or B grade, then a label reset is needed to distance the good from less good models. The Commission is tasked with monitoring the situation via consolidated, anonymous sales data. But MEPs failed to require firms to make this available, as they do in Australia and New Zealand. As things stand, the Commission must also have to start chasing data, spend public money buying it, or just act without it, near blind. It is relatively easy and safe for trade associations to make available anonymous sales data per product type and energy class. The only alternative is to strip out the numbers and base a label reset on the range of models available on the market. This opens the way for the kind of ‘fleet average’ model seen in the auto industry, where one or two elite models are a fig leaf to sales of mainstream energy hog models.

Eyes wide shut on advertising

Conservative MEPs did not want to see energy consumption information on some forms of popular advertising, similar to what is required on car ads. It seems like a no-brainer to us to offer consumers essential energy information.

Eyes wide shut for stakeholders

The EU project has been getting less popular of late and product rules are no stranger to tabloid attack. So you would think national consultation forums to allow national business and civil society to help shape product policies would be a good idea. Such forums already exist in Belgium, France and Germany. But conservative MEPs shot the idea down, the same band that complains about Europe being technocratic and undemocratic. Hmm.

No help on energy poverty

Socialist MEPs fought unsuccessfully to channel government subsidies to Europeans suffering from energy poverty. The scheme, which subsidises the purchase of heating equipment in the top two energy label classes, is not new. But wording that “particular attention should be given to low income groups” could have helped channel it to those in most need. It was also shot down by other political groups at the vote.

What happens next?

Coolproducts will be working hard to convince parliament and member state negotiators to settle on a label that works best for consumers and environment, that embraces a digital future and puts confusion behind it. We expect finalisation in October, with three meetings between council and parliament negotiators in between. The Slovak presidency is doing a great job so far and seem want to finalise quickly. Progress among governments has not been without problems though. Last November, Italy, Spain, Poland and Portugal watered down the position of the council of ministers. It’s current position is to phase out + grades product group by group, a process that could take 10 years. Parliament has raised the bar though, and more progressive countries are likely to win the day, even if the final timeline slides somewhat away from a desirable 5 years. Same story for the product database. We expect more of a challenge when it comes to the market surveillance aspects, since this places extra burden on governments they are unlikely to welcome, even if it is overwhelming in the interests of their citizens and firms. We hope they will accept energy consumption on advertising.

The road ahead