Fridges, TVs and other appliances have been getting much more energy efficient in recent decades. This is radically cutting home and office energy bills and lowering the energy intensity of our economies, even as they grow. Across the world, that means less strain on national power grids and a lowering of the threat of climate change. In Europe, the revolution is largely thanks to two smart EU policies getting products to do the same job with less energy and other resources. With heaters alone responsible for the same amount of greenhouse gas emissions as the whole of the transport sector, there are mammoth savings to be had. This page summarises the policies, their vast potential and persistent problems.
A tag-team of European directives is transforming a score of domestic, commercial and industrial product groups sold in the European Union. The Ecodesign Directive gradually removes from the market the least efficient products by setting standards that demand a certain level of performance. Meanwhile, the Energy Labelling Directive pulls consumers towards the best products by giving them an impartial A to G ranking. Consumers make better buying choices and manufacturers are rewarded for innovation.
Where ambitious, these policies work. But powerful industrial lobbies have weakened standards and slowed the process. Poor enforcement is an issue too, with free-rider firms denying Europeans savings worth an estimated €10 billion a year. There are loopholes and weird standards to contend with, and the label has aged badly, with fewer and fewer consumers buying efficient models.
Mad meddling from Brussels or plain common sense?
The Ecodesign Directive raises the efficiency bar, forcing products to do the same thing with less energy. Consumer associations say products are getting better as a result. Ecodesign is also seen as a great way to increase repairability, recyclability and reduce toxicity of products. Eighty percent of the environmental impacts of products are actually determined at design stage, according to the European Commission.
Ecodesign rules have strict criteria to ensure the gains will be real, that businesses are not unduly impacted and that product prices will not be unduly impacted. The British are not known for their love of Europe or ‘red tape’, but their government found that for every £1 spent creating and enforcing these particular EU rules, consumers and businesses save £3.8 through lower energy bills.
The eurosceptic British press has attacked EU standards in recent years. Driven by politics more than any serious criticism, there are numerous reasons to ignore the hyperbole. But the British attacks have had a disproportionate chilling effect on the European Commission. It may be leaving, but populism isn’t, and Juncker has slowed progress on the file, constraining its benefits.
Europe will retain massive influence on product policies globally thanks to its market size, but is in danger of letting other regions set the agenda.
For a product-by-product overview of Ecodesign standards and how they are evolving, see our products page.
Energy label 101
Impartial guide or a warped waste of time?
Europe’s colourful A-G energy label is almost as well-known as the Euro or union flag. Recent research found shoppers value its impartial advice and will pay a premium for better products, factors that strongly motivate firms to improve their products and pull the market in the right direction.
But the label has aged badly. The energy efficiency of different product groups has evolved at different speeds, creating inconsistent energy label scales, with some products ranked on an A-G scale, others on an A+++ to D scale, and everything in between. The introduction of + ratings on the end of the A grade has made matters worse. In some product groups, A+ is actually the lowest possible rank. Consumers are buying inefficient models thinking they are better than they are.
Consumers are starstruck by the label’s colourful A-G efficiency ranking, even though this is a poor guide to energy use and running cost. Size matters, and for some products, a model with a good efficiency ranking can consume more energy than a smaller model with a worse efficiency ranking. On top of that, the formula and tests behind a label ranking are sometimes rigged or do not reflect real-world usage. Both mean some products consume more energy in the real life than shown on the label.
Creating a perfect label scheme that doesn’t cost a fortune to administer is a challenge. But the digital, mobile age promises more personalised and non-energy information, including product life expectancy, repairability and toxicity. Coolproducts is campaigning for many such improvements as the Energy Labelling Directive is revised.
For a product-by-product view of energy labelling, see our products page.
We are already benefiting from mammoth energy savings thanks to existing EU product standards. There is more to come as existing standards are raised, in an agreed series of ‘tiers’, and more product groups are covered. All told, every home in Europe can look forward to reduced energy bills worth nearly €500 per year by 2020. These savings take time because improved products must find their way from showrooms and into offices and homes. So the annual saving figures referenced on this site are usually from 2020 or 2030.
The latest European Commission research predicts that by 2020:
- The average product will do the same job using around one fifth less energy;
- Annual primary energy savings will amount to 6900 PJ (165 million tonnes oil equivalent, 1918 TWh), corresponding to approximately 9% of the current total EU energy consumption;
- Annual greenhouse gas emissions will be cut by 319 megatonnes, i.e. 7% of 2010 EU-total and equivalent to taking about 167 million cars off the road;
- Better air quality due to avoided 144 kt SO2 equivalent direct NOx-emissions, 141 kt direct CO-emissions, 10 kt direct OGC-emissions and 9 kt direct PM-emissions;
- €112 billion in annual savings for consumers, mostly from reduced energy bills;
- €57 billion in extra revenue, mainly for manufacturers and retailers;
- 800,000 extra direct jobs in manufacturing, wholesale, retail and installation.
For 2030, these results will increase by over 60% and lead to noticeable economic benefits. Consumer's monetary savings are expected to triple and equal 1% of the EU's current GDP in 2020 and 2.6% in 2030.
In a soundbite, the policy is delivering half Europe’s energy savings target and a quarter of its carbon reduction target.
‘Will the lights stay on this winter?’ is a staple media question in several European countries. Product policies do a huge amount to allow the answer ‘yes’, even as economies grow, according to new research for the BBC. Saving energy also means reducing our dependency on shaky foreign suppliers in the Middle East and Russia.
Barriers to more savings
Individual product rules have their problems, but the guiding framework directives themselves are hobbled too. One of the biggest problems is the snail pace of lawmaking in this area, six years for the average product law from first study to an enforceable law at national level. Given the value these policies create, the European Commission has too few people working on something so important.
Philips, Bosch/Siemens and Electrolux are among the big industries publicly in favour of improving the policymaking process. But there are others trying their best to hold things back. The lighting industry has been particularly unhelpful, and recently won an historic freezing of energy standards. Europe’s white goods association lobbied against a badly needed revision of the Energy Labelling Directive, presumably because some short-sighted firms are cashing in on a stagnating system that liberally awards A and + grades. Some member state authorities suspect VW-like software scamming of EU laws may be occurring, something Coolproducts is investigating.
The law is one thing, enforcement is another. National governments should ensure that manufacturers stick to energy standards and retailers label products as the law requires. Some carry out inspections, but most lack the resources or drive. More centralised co-ordination from Brussels is on the cards. In the meantime, experts estimate (see page 9) that 10-20% of savings expected from EU product policies are lost as manufacturers and importers dodge the rules or abuse loopholes. Just 10% equates to €10.5bn worth of energy savings illegally denied to consumers. A 3 year survey recently concluded that over half the products it inspected had wrong or missing labels. The problem is particularly bad online, something acknowledged by retailers. The problem for the authorities could get much harder in a brave new world of ever more computerised and networked appliances.