The European Parliament adopted, in first reading, the Energy Efficiency Directive (EED) on Tuesday (11 September).

The EED establishes legally binding commitments from member states to increase efforts to use energy more efficiently at all stages of the energy chain in the hopes of reaching the EU's target of a 20 per cent reduction in energy use by 2020.

The directive, which will replace the Energy Savings Directive (ESD), and the Cogeneration Directive, will be officially made law when it is published in the EU's Official Journal in October and will enter into force 20 days later. Members states will then have 18 months to transpose the new legislation into national law.

Details of the EED include a legal obligation to establish energy efficiency obligation schemes or policy measures in member nations, and a right for consumers to know how much energy they consume. Specific details that have already been unveiled include:

• Energy distributors or retail energy sales companies will be obliged to save every year 1.5 per cent of their energy sales and provide customers with easy and free-of-charge access to data on real-time and historical energy consumption;
• Establishment of national heat and cooling plans;
• Businesses will need to undertake official energy use audits every four years;
• From 1 January 2014, three per cent of the total floor area of public buildings will need to be renovated every year.

According to a non-paper on the EED put forth in an informal presentation to the Energy Council on the 19th and 20th of April 2012, without the EED, the EU would have fallen short and only achieved 50 per cent of its energy efficiency target for 2020. The paper estimated that the directive will increase EU GDP to €34 billion (£27 billion) and increase net employment by 400,000.

Changes to costs for member nations include an increase cost for investment in energy efficiency of approximately €24 billion (£19 billion) annually, reduced costs for investment in energy generation and distribution by approximately €6 billion (£4.8 billion) annually, and reduced fuel expenditure of approximately €38 billion (£30.4 billion) annually.

The reduction in fuel expenditure is derived from proposed changes in the directive, which will deliver approximately 200 million tonnes of oil equivalent energy savings (Mtoe). The overall reduction in expenses, therefore, is calculated to be approximately €20 billion (£16 billion).

According to the overall statement in the EED, the directive "aims to ensure that new or strengthened policy tools trigger energy savings among final consumers."

Read the full text of the Energy Efficiency Directive.