15 April 2014: According to an interim report released by the European Commission’s Energy Efficiency Financial Institutions Group (EEFIG), building retrofits offer a critical opportunity to address the growing strategic importance of energy efficiency in Europe.

The report, titled ‘Energy Efficiency – the first fuel for the EU Economy: How to Drive New Finance for Energy Efficiency Investments,’ cautions that insufficient public and private investment may prevent EU member States from meeting their 2020 and longer-term energy efficiency targets.

In order to fill this gap, the authors find that policy reforms are needed to correct market failures, including the timely and coherent transposition of existing European framework legislation, strong enforcement of building regulations, and a rapid scaling up of investment models across EU member States.

The group was tasked with offering a financial sector perspective on the most imminent challenges threatening increased energy efficiency investments, as well as the right EU policies needed to address those challenges. Based on an analysis of key drivers of investment in energy efficiency in commercial, public and private residential buildings, the group identifies and prioritizes policy-led and market-led approaches to leverage additional finance.

The report highlights six priority areas and recommendations for European policymakers: existing building regulations; future regulatory pathways; easily accessible data and standard procedures; reporting, accounting and procurement; specific investment and retail alignment for residential buildings; and combined public and private funding sources.

The European Commission established the EEFIG as a permanent working group in 2013 to engage the financial sector in overcoming challenges for obtaining long-term finance for energy efficiency. [Publication: Energy Efficiency – The First Fuel for the EU Economy, Part 1: Buildings (Interim Report)]