Enhancing Cohesion Policy: Investing in Energy Efficiency Framework

1. Conditionalities and other framework conditions relevant to cohesion policy investment in energy efficiency2014-2020 Agnes Kelemen, DG Regional Policy Cohesion policy investing in energy efficiency in buildings Brussels, 29-30 November 2011 European UnionCohesion Policy

2. Investment does not take place in a vacuum • Presence or absence of strategic framework which defines targets and paths • Legislative framework: standards related to energy performance of buildings, legislation on energy audit, rules for consensus in multi-apartment buildings, etc. • Enterprises: Experience of labour force in construction sector, presence of energy service companies, innovation potential in energy and building materials sectors, etc. • Energy market (price support, monopolistic district heating companies) • Financial sector • General economic situation • Public administrations (capacity, public funding) • Information availability (e.g. data availability on energy performance of buildings and fuel poverty, availability of information on benefits of investing in energy efficiency to general public) • Are occupiers and owners largely the same people? • Social landscape (relevant for targeting investment, ability of target audience to pay back loans, etc.) • Housing stock: inner city historical buildings/multi-apartment block buildings/suburban detached housing/rural area European UnionCohesion Policy

3. Implications: Different approaches may be needed in different cities, regions and Member States Integrated action is required • Physical investment in energy efficiency • Innovation • New skills for new jobs • Enterprise support • Technical Assistance for capacity building in public administrations, preparation of strategies, implementing regulations There are 2 groups of framework conditions/context variables: • Context which cannot be changed  adapt programmes • Context/framework conditions which can be changed, and some of these are important to the effectiveness of the investment  change framework, abolish barriers European UnionCohesion Policy

4. Effectiveness of investments undermined by unsound policy frameworks and regulatory, institutional and administrative bottlenecks Environment and climate change: weak institutional capacities unclear legal frameworks, delays in complying with EU directives. vague strategies among the main weakness of environmental measures Lessons from ex-post evaluations European UnionCohesion Policy

5. Key to ensure that all conditions for effective investment are in place, this requires a combination of: Appropriate regulatory framework Effective policies with clear policy objectives Sufficient administrative/institutional capacity ‘Conditionality provisions would help countries and regions to tackle the problems that past experience has shown to be particularly relevant to policy implementation’. ‘Their main purpose would be to help countries and regions to tackle the problemsthat past experience has shown to be particularly relevant to policy implementation. Theseprinciples could be linked to, for example, transposition of specific EU legislation, thefinancing of strategic EU projects, or administrative, evaluation and institutional capacity.’ (Fifth Cohesion Report) Rationale for conditionalities European UnionCohesion Policy

6. Member States in broad support of the general idea, but would like to see conditionalities which respect the following principles: Directly linked to factors which determine effectiveness Limited in number Taking into account subsidiarity and tailored to context Ensuring strong ownership Based on joint agreement between Member States and the Commission and objectively verifiable criteria Concerns over administrative burden and delays and need to exploit potential of existing conditionalities View of Member States European UnionCohesion Policy

7. Ex-ante conditionalities in the regulatory proposal Paymentmade contingent on fulfilment of conditionalities Aim to contribute to increase effectiveness Preventive action to avoid bottlenecks and inefficiencies Ex-ante conditionality and criteria for fulfilment laid down in Annex IV of the Regulation on Common Provisions 2 types: thematic and general ex-ante conditionality Relate to factors determining effectiveness in the context of strategic, regulatory and institutional frameworks Relate to existing commitment at EU level that Member States have signed up to in the form of a directive or Council conclusion European UnionCohesion Policy

8. Regulation: Thematic and general ex-ante conditionalities set out in the Regulation Preparation of programming documents: Member States undertake a self-assessment verifying whether the ex-ante conditionality criteria have been met. Conditionality respected: Draft programmes explain that no further action needs to be taken Partially respect:Draft programmes lay down commitments for fulfilment Not respected: Draft programmes lay down commitments for fulfilment, payments could be made only upon fulfilment Submission of programming documents: The results of the self-assessment and commitments are synthesised in the Partnership Contract are included in the draft programmes. Negotiation and agreement on commitments: The agreed commitments are set out in the programmes and synthesised in the Partnership Contract. European UnionCohesion Policy

9. Energyefficiency Ex-ante conditionality: Transposition of Directive (2010/31/EU) on the energy performance of buildings Compliance with GHG reporting requirements (Article 6(1) of Decision No 406/2009/EC of the EP and Council) Transposition of Directive 2006/32/EC on energy end-use efficiency and energy services Transposition of Directive 2004/8/EC on the promotion of cogeneration Criteria for fulfilment: Adoption of methodology for calculating the energy performance of buildings, setting of minimum energy performance requirements and calculation of cost-optimal levels of minimum energy performance requirements (Article 3, 4 and 5)and adoption of measures necessary to establish a system of certification of the energy performance of buildings (Article 11 of Directive 2010/31/EU) Realisation of the required rate of renovation of public buildings (Articles 9, 11.5, 12.1 (b), 13.1 of Directive 2010/31/EU); Final customers are provided with individual meters (Article 13.1 of Directive 2006/32/EC); Promotion of efficiency in heating and cooling (Directive 2004/8/EC) European UnionCohesion Policy

10. RenewableEnergy Ex-ante conditionality: Transposition of Directive 2009/28/EC on the promotion of the use of energy from renewable sources Criteria for fulfillment: Transparent support schemes (Articles 13.2, 14..1, 15.6 (d), 22.1 (b)-(d)), priority in grid access and in dispatching (Articles 16.2 (b) and (c)), standard rules relating to the bearing and sharing of costs of technical adaptations which have been made public (Article 16.3 of Directive 2009/28/EC); Adopted national renewable energy action plan (Article 4 of Directive 2009/28/EC) European UnionCohesion Policy

11. Nextsteps • Negotiations on regulatory proposals in the Council and European Parliament • „Readiness check” on the state-of-play of the fulfilment of ex-ante conditionalities with other DGs • Preparation of negotiation mandates with other DGs • Negotiation process European UnionCohesion Policy

12. Thank you for your attention! European UnionCohesion Policy