Six years have passed since the EEFIG’s 2015 report on boosting finance in energy efficiency investments in buildings, industry and SMEs. Since then, the political and societal landscape has shifted significantly, and financing practices has evolved and should continue evolving in the light of recent policy developments. Consequently, this working group takes a deep dive into the current status and necessary actions to scale up energy efficiency investments in buildings, SMEs and industry.
The objectives of the Working Group are:
- Monitoring how financing practices for energy efficiency are evolving, for buildings and industry, e.g.: the development of previous innovative business models and the emergence of new innovative business models
- Discussing the results of the assessment and the consequences for policy design
- Formulating recommendations to raise the level of energy efficiency investments, with the aim of meeting the 2030 EU energy efficiency targets.
Timeline of WG activities
- February 2021Submitted Intermediary results report of the working group including:
- Preliminary assessment of selected financial instruments
- Drafting country studies
- WG member survey on an assessment of EEFIG recommendations and the evolution of financial instruments in both buildings and industry
- Thematic work was in four subteams taking on key inputs required for the Final Report
- First half of 2021Drafting and editing of final report
Drafting and editing of final report took place in the first half of 2021 in teams per chapter and involved nearly all the WG members in at least two writing positions
- 7th July 2021Draft final report was submitted to the EC for review
- 8th October 2021Final Report
- 28th April 2022Published Report
Driving demand for energy efficiency remains the most imminent challenge to overcome – mainly to be addressed by policy measures.
Facilitating the right financial offer is mainly the responsibility of financial institutions (and other financial market participants such as funds).
Providing the right financial incentives to reduce the high up-front payments associated with energy efficiency investments compared with conventional alternatives is a task for public budgets and state-backed financial institutions, by blending loans and grants or by providing guarantees.
Reducing transaction costs through further standardisation of investment processes should be a focus for market actors, as well as implementing and marketing best practice financing approaches for energy efficiency.
The working group has found that the energy efficiency of new buildings will increase significantly, as Nearly Zero energy buildings (eligible under the taxonomy) are mandatory for all buildings built from 2021. However, EEFIG members wonder about the expansion of investment in energy efficiency renovations of existing buildings. The objective to at least double the level of building renovations (from 1% to 2%) of the “Renovation wave” published in October 2020, seems challenging. Its achievement will depend on the capacity of Member States to implement ambitious renovation plans and the availability of finance to support these investments.
Similarly, EEFIG members are uncertain whether energy efficiency investments in industry will increase significantly. In recent years the investment amount has remained flat and its increase will depend on measures adopted by MS in development of the revised Energy Efficiency Directive in 2021, in particular mandatory measures.
Significantly increasing energy efficiency investment depends on the capacity of national governments implementing large energy efficiency investment programmes, as have only been undertaken by a few of the leading EU countries.
Peter Sweatman
Team leader
Peter has 30 years' experience in finance, climate finance and providing strategic advice to companies, structuring energy efficiency investments and managing multidisciplinary projects in Europe and the G20, exchanging good practices and capacity building.
Lucas A. Bossard
Previous team leader
Lucas has 18 years of experience in leadership and project management, including coordinating international financial institutions and multilateral development bank harmonization on GHG reduction methodologies and climate finance tracking and developing and promoting renewable energy and energy efficiency investments globally