46 Cyprus Energy Regulatory Authority Proposal for Revision of Directive 2012/27/EU of the European Parliament and of the Council of 25th October 2012 on energy efficiency (EED) Energy efficiency is a key area of action, without which the full decarbonization of the EU economy cannot be achieved. The Energy Efficiency Directive has led to the Union's current energy efficiency policy to capture the cost-effective energy saving opportunities. In December 2018, the Energy Efficiency Directive was amended as part of the 'Clean Energy for All Europeans package', in particular to include a new headline 2030 Union energy efficiency target of at least 32.5% (compared to projections of the expected energy use in 2030), and to extend and strengthen the energy savings obligation beyond 2020. While the 2020 energy efficiency target may have been achieved due to the exceptional circumstances created by the Covid-19 pandemic, the sum of national contributions communicated by Member States in the National Energy Climate Plans (NECP) falls short of the Union's level of ambition of 32.5% in 2030. The contributions collectively would lead to a reduction of 29,4% for final energy consumption (FEC) and 29,7% for primary energy consumption (PEC) compared to the projections from the 2007 reference scenario for 2030. This would translate in a collective ambition gap of 2.8 percentage points for primary energy consumption and 3.1 percentage points for final energy consumption for EU27. On 15 July 2021, the European Commission announced the publication of the proposal for amendment to "Directive (EU) 2012/27 on the promotion of the use of energy in the context of the set of proposals "FIT for 55 – Implementation of the European Green Deal". The overall objective of the revision of the Directive is for each Member State to determine their indicative national contribution based on a formula of objective criteria and benchmarks, which reflect national circumstances. The revision of the Directive increases one of the key elements for driving energy efficiency improvements – the obligation on Member States to achieve annual energy savings in end-use consumption. At present, the obligation is set at 0.8% per year, but the proposal seeks to raise this figure to 1.5% as of 2024, through to 2030. As this targets energy end-use, it is expected to encourage greater efforts in key sectors such as buildings, industry and transport via the energy efficiency obligation schemes and the alternative policy measures. Regarding Cyprus, the revision deviates from the efficiency obligation of 0.8% of the annual end-use consumption, and obliges Cyprus to achieve new annual efficiency, from 1st January 2021 to 31st December 2023, equivalent to 0.24% of the annual end-use consumption, on average during the most recent three-year period before 1st January 2019 (Article 8, Energy efficiency obligation4). The amendments to Article 8 increase in the obligation rate to achieve new annual final energy savings from 1st January 2024 for all Member States, including Cyprus. In particular, new savings each year from 1st January 2024 to 31st December 2030 of 1.5% of annual final energy consumption, averaged over the three-year period prior to 1st January 2020. Proposal for revision of Directive 2003/87/EC on establishing a scheme for greenhouse gas emission allowance trading within the Community (EU ETS) The EU Emissions Trading System (ETS) puts a price on carbon and lowers the cap on emissions from certain economic sectors every year. It has successfully brought down emissions from power generation and energy-intensive industries by 42.8% in the past 16 years. Via the "FIT for 55" proposals, the Commission is proposing to lower the overall emission cap even further and increase its annual rate of reduction. The Commission is also proposing to phase out free emission allowances for aviation and align with the global Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and to include shipping emissions for the first time in the EU ETS. To address the lack of emissions reductions in road transport and buildings, a separate new emissions trading system is set up for fuel 4 https://eur-lex.europa.eu/legal-content/EL/TXT/?uri=CELEX:52021PC0558
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