Efficiency

By 2030, industrial plants in Germany can save 90 TWh of natural gas through the electrification of process heat. This represents up to three quarters of the savings required from industry by the REPowerEU plan and a reduction of 12.5 million tonnes of CO₂ – 18 percent of the target for the industrial sector in the German climate protection law.

Flexible electricity consumption helps to integrate a high share of renewable energy and to make better use of its volatile generation. Such flexibility will make it possible to meet the German government‘s target of 80 percent renewables by 2030 efficiently.

In order to stimulate flexible consumption, the introduction of time-differentiated grid charges must be made a political priority. Likewise, privileging natural gas-based technologies over applications using direct electricity must end.

A special support programme can be used to close the cost gap for electricity-based technologies, and a statutory zero carbon standard for new investments can create planning and investment certainty.

Industrial production of virgin plastics, steel, aluminium and cement alone accounts for 13 percent of yearly energy consumption and 581 Mt of annual emissions. The EU also imports very large amounts of gas, oil and coal to produce plastics and other energy intensive materials.

With ambitious policies, annual EU industrial emissions could be reduced by up to 10 percent (70 Mt) until 2030 and by 34 percent (239 Mt) until 2050 compared to 2018 levels. Plastics production alone could avoid using fossil fuels equivalent to roughly 2.7 billion cubic metres of gas and 149 million barrels of oil annually by 2030.

Required policy instruments are expanded quotas for recycled content; investment aid for rapid deployment of innovative recycling technologies; as well as labelling and best practice mandates for collection, sorting, recycling and re-use.

Examples are wider bans on single use and non-recyclable plastics, the implementation of deposit-refund schemes for plastic packages, investments into ex-post re-sorting and state of the art recycling practices.

Industrial production of virgin plastics, steel, aluminium and cement alone accounts for 13 percent of yearly energy consumption and 581 Mt of annual emissions. The EU also imports very large amounts of gas, oil and coal to produce plastics and other

energy intensive materials.

With ambitious policies, annual EU industrial emissions could be reduced by up to 10 percent (70 Mt) by 2030 and by 34 percent (239 Mt) by 2050 compared to 2018 levels. Plastics production alone could avoid using fossil fuels equivalent to roughly 2.7 billion cubic metres of gas and 149 million barrels of oil annually by 2030.

Required policy instruments are expanded quotas for recycled content;

investment aid for rapid deployment of innovative recycling technologies; as well as labelling and best practice mandates for collection, sorting, recycling and re-use.

Examples are wider bans on single use and non-recyclable plastics, the implementation of deposit-refund schemes for plastic packages, investments into ex-post re-sorting and state of the art recycling practices.

In nearly all EU Member States additional costs for carbon emissions would only increase tenants’ bills without encouraging landlords to refurbish their buildings.

Since landlords pay heating bills, they have a clear incentive to reduce energy consumption and avoid carbon taxes by renovating their houses and switching to clean heating systems.

When heating bills are based on a guaranteed temperature, landlords have the incentive to renovate their buildings, while tenants who keep their apartments cooler (verified by temperature monitoring) pay less.

This would provide all Member States (not only Sweden, currently profiting from an exception clause) with an easy-to-implement policy instrument that protects tenants from high carbon prices and provides targeted incentives for landlords.

Reducing emissions from the current level of 130 million tons of CO2 to between 70 and 72 million tons in the next 11 years will require ramping up all available technologies across the board. These include insulation, heat pumps, heat networks, decentralized renewable energy and power-to-gas. Cherry-picking the various building technologies is no longer an option because of past shortcomings.

Ensuring adequate competition between various energy supply options such as renewable energy, heat pumps, synthetic fuels and decarbonized heat networks requires reducing final energy consumption by at least a third before 2050. The more efficient a building is, the more realistic any necessary expansion on the generation side will be.

Synthetic fuels are a significant component of energy supply in all 2050 climate protection scenarios. But their contribution by 2030 is only limited, and even between 2030 and 2050 they are considerably more expensive than most energy efficiency measures in the buildings sector. In addition, the bulk of generation from power-to-gas may be allocated to other markets (industrial processes, shipping, air travel and transport by truck).

To this end, a package of policy measures is needed, including changes to relevant laws, regulations and energy tax laws, as well as an overhaul of funding programs. The heating sector goals for 2030 and 2050 can only be met if the installation rate of all building-related climate protection technologies is quadrupled.

The Yellow Vests protests are primarily directed at upward social redistribution and not climate protection.

Over the last 18 months, the French government has abolished the wealth tax, increased flat-rate social security contributions, reduced housing subsidies and increased the tobacco tax. Taken together with the energy tax increase and a lack of compensation, these measures have contributed to the widening of economic inequalities in French society.

Like any consumption tax, the CO2 surcharge on energy consumption has a greater effect on low-income households than high-income households in percentage terms. This was also the case in France. A per capita redistri-bution of revenue or other redistribution mechanisms are necessary to balance this.

In France, most of the revenue from the CO2 surcharge on energy taxes was used for consolidating the budget. The contribution climat énergie was therefore not recognised by large parts of the population as a climate protection measure. In addition to so-cial compensation, it is therefore necessary to use the revenues for climate protection measures which are transparent and easily accessible.

Each saved kilowatt-hour of electricity reduces fuel and CO2 emissions, as well as investment costs forfossil and renewable power plants and power grid expansion. If electricity consumption can be lowered by10 to 35 percent by 2035 compared to the Reference scenario outlined in the study, the costs for electricitygeneration will reduced by 10 to 20 billion euros2012.

One saved kilowatt-hour of electricity would lead to reduced electrical system costs of between 11 to 15euro cents2012 by 2035, depending on the underlying assumptions. Many efficiency measures wouldgenerate lower costs than these savings, and would therefore be beneficial from an overall economicperspective.

A significant increase in energy efficiency can significantly reduce the long-term need to expand thetransmission grid: between 1,750 and 5,000 km in additional transmission lines will be needed by 2050,down from 8,500 km under the “business as usual” scenario.

Reducing power consumption by 15 percent compared to the Reference scenario would lower CO2 emissionsby 40 million tonnes and would reduce spending on coal and natural gas imports by 2 billion euros2012 in2020.