Blog

EU energy label: a bumpy way towards good policy

Dr Michaela Valentová explores the success story of EU energy labelling and energy efficiency, and the challenges this effective policy faces.

Energy labels

On November 8, 2018, the General Court annulled the regulation on energy labelling of vacuum cleaners, based on a complaint by one of the vacuum cleaner manufacturers, Dyson. The ruling (essentially cancelling the energy label for vacuums), and the preceding legal dispute stirred a heated debate (at least in the energy labelling experts` circles), the founder of the company pulling out the card of “Dieselgate” in his statement. Dyson argued that the methodology determining the label values is unfavourable to the bagless vacuums (produced by Dyson) providing an unfair advantage for the prevalent (bag-using) technology.

The case will probably (rightly) result not in a ban of the energy label itself, but rather in an adaptation of the underlying methodology. More interestingly, it marks another pin in the journey of constant revisions and iterations of the EU energy labelling since its launch in the 1990s.

The first energy labels for domestic appliances were introduced already at the beginning of the 1990s and have fast led to a rapid market development. Starting with big appliances, such as refrigerators and freezers, washing machines and dishwashers, the energy labelling now covers 14 domestic and commercial product categories. Energy labelling has proven one of the most (cost)effective energy efficiency policy instruments, significantly speeding the transition to more energy efficient (or energy saving) products.

Yet, it is never as simple as that. In the mid-00s, most appliances under the labelling scheme were already in class A. In an attempt to boost the change once more, the European Commission gradually introduced the A+, A++, and A+++ energy classes. As part of the change, the energy labels also lost their explanatory parts and were unified through pictograms for the whole EU.

Around the same time, another major policy instrument, the so-called ecodesign requirements regulations, started coming into force. It set energy efficiency and other environmental performance standards on a number of product categories (currently over 30 product categories), including the ones covered by the energy label. Performance standards are a powerful regulatory instrument, which trigger a substantial technological change. However, it has also weakened consumer comprehension and therefore the overall performance of the energy labels.

As a result of performance standards, and without most of the general public aware, the “worst” refrigerator that you can find in a shop currently is not G, as the energy label would suggest, but the “green” A+ [1]. And, even though consumer surveys confirmed that the public generally appreciated the new labels, a significant number of consumers (30 % on average) did not. Moreover, the A+++ system remained confusing to many. Studies have also found that the objective and subjective comprehension of the label tended to differ – the consumers would think they understood the label, but when “tested”, would fail to make an informed choice.

Therefore, to adapt to both the clash with the ecodesign and consumer perceptions, yet another change of the energy labelling scheme was introduced in 2017 leading to current gradual rescaling back to A - G. Also, more revisions to the information on the label are also on the way.

In addition, several (EU-funded) studies found that the manufacturers fail to provide correct information on the label itself. While this does not seem to have affected the general trust in the information on the label among consumers, it led the EU and Members States to adapt the policy again, and to require a stricter monitoring and verification policy and to check for possible loopholes in the regulations.

Energy labelling has undoubtedly been a successful story overall. However, it has also proven that the policy makers must remain attentive to market development, to other policies that are coming into force, and last, but not least, to the final recipients of the policy – the consumers in this case. When a hiccup in the policy trajectory occurs, it is important to, first, accept the fact that something may be wrong, second, to find out what exactly went wrong, and, third, to adapt the policy accordingly. The case of energy labelling shows that even though it may be a long process requiring a lot of efforts (and sometimes legal disputes), it has proven to be one worth going through.

[1] The rest of the scale on the energy label remains there, but with no real information value. Even though you find the B (or D) class on the label, you cannot buy a B refrigerator any more.