Stronger Support for Energy Efficiency in SMEs

29 June 2023 - // Opinions
Niels Fuglsang
MEP, S&D Group

More stringent support for SMEs can make Europe more energy efficient.

SMEs can make a huge contribution to the European Union’s climate targets, while harvesting efficiency gains that bring down the energy bill for SMEs. There might even be money to earn by looking at the energy consumption.

Energy efficiency is among the core tools to secure lower energy bills, which in turn will benefit the climate.

New directive creates stronger support for SMEs

The right solutions, experiences, and know-how can be hard to find when your main business is not energy and you are occupied by your core business. This is natural, particularly for small and medium-sized enterprises (SMEs), which represent the backbone of Europe’s economy contributing to employing nearly 95 million people with more than € 4,000 billion value added.

SMEs have increasingly felt the burden of high energy prices. For many of them, financial distress puts them at risk of insolvency. Energy audit and energy efficiency policies can alleviate this burden contributing to the reduction of the company costs also thanks to the multiple energy benefits. Adequate policies for SMEs are also crucial to maximize Europe’s decarbonization efforts. Therefore, I am happy that the Parliament succeeded in revising the Energy Efficiency Directive to push for stringer support for SMEs.

In the revised Energy Efficiency Directive the European Parliament strengthened guidance and help for SMEs in taking up energy efficiency measures.

Member States shall now promote the availability of high-quality energy audits and create one-stop shops for the provision of technical, administrative, and financial advice to SMEs and microenterprises.

The directive also encourages Member States to set up energy audit centers for SMEs and microenterprises and to set up support schemes for the effective implementation of the recommendations.

With the revised Energy Efficiency Directive, we have an opportunity to accelerate energy efficiency measures across the EU in SMEs. This will help competitiveness, decrease prices and be a significant contribution to our climate goals.

Energy efficiency solutions are more needed than ever

The combination of Putin’s chokehold on gas supplies, the most severe drought on record, and a failing conventional power fleet created the conditions for a perfect storm. A scenario that could repeat itself in the coming winter.

The need to be more energy efficient has become ever more pressing businesses have been hit with ever-increasing energy bills, which in turn are driving inflation.

The core long-term solution to stabilizing energy prices is to prioritize energy efficiency. This will reduce the need for gas-powered generation altogether and bring benefits for consumers. In terms of the best solutions to support SMEs, a recent study from LEAP4SME shows that a mix of different instruments, combined with sector-specific policy instruments, appears to be the best way to support the harder-to-reach SMEs.

A recent study from Strategic Perspectives finds that the green transition will become a competitive advantage for businesses and it will protect companies from the cost of inflation and energy prices. It can lower average prices for companies by more than 7% by 2030 compared to a business-as-usual scenario. Hence, changing heating systems to heat pumps, taking advantage of excess heat, shifting to LED lighting, and installing intelligent energy management systems all have the potential to reduce energy bills and stabilize inflation.

The views expressed in this article are the author’s own and do not (necessarily) reflect REVOLVE's editorial stance.
Niels Fuglsang
MEP, S&D Group

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