RECOMMENDATION FOR SECOND READING on the Council's position at first reading for adopting a directive of the European Parliament and of the Council on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products (recast)

    29.4.2010 - (05247/1/2010 – C7‑0094/2010 – 2008/0222(COD)) - ***II

    Committee on Industry, Research and Energy
    Rapporteur: Anni Podimata

    Procedure : 2008/0222(COD)
    Document stages in plenary
    Document selected :  
    A7-0128/2010
    Texts tabled :
    A7-0128/2010
    Debates :
    Texts adopted :

    DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

    on the Council's position at first reading for adopting a directive of the European Parliament and of the Council on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products (recast)

    (05247/1/2010 – C7‑0094/2010 – 2008/0222(COD))

    (Ordinary legislative procedure: second reading)

    The European Parliament,

    –   having regard to the Council's position at first reading (05247/1/2010 – C7‑0094/2010),

    –   having regard to the Commission proposal to the European Parliament and the Council (COM(2008)0778),

    –   having regard to Article 251(2) and Article 95 of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C6‑0412/2008),

    –   having regard to the Communication from the Commission to the European Parliament and the Council entitled "Consequences of the entry into force of the Treaty of Lisbon for ongoing interinstitutional decision-making procedures" (COM(2009)0665),

    –   having regard to the Communication from the Commission to the European Parliament and the Council entitled "Addendum to COM(2009) 665 final" (COM(2010)0147),

    –   having regard to Article 294(7) and Article 194(2) of the Treaty on the Functioning of the European Union,

    –   having regard to the opinion of the Committee on Legal Affairs on the proposed legal basis,

    –   having regard to its position at first reading[1],

    –   having regard to the opinion of the European Economic and Social Committee[2],

    –   after consulting the Committee of the Regions,

    –   having regard to Rules 72 and 37 of its Rules of Procedure,

    –   having regard to the recommendation for second reading of the Committee on Industry, Research and Energy (A7‑0128/2010),

    1.  Approves the Council's position;

    2.  Notes that the act is adopted in accordance with the Council's position;

    3.  Instructs its President to sign the act with the President of the Council pursuant to Article 297(1) of the Treaty on the Functioning of the European Union;

    4.  Instructs its Secretary-General to sign the act, once it has been verified that all the procedures have been duly completed, and, in agreement with the Secretary-General of the Council, to arrange for its publication in the Official Journal of the European Union;

    5.  Instructs its President to forward its position to the Council, to the Commission and to the national parliaments.

    EXPLANATORY STATEMENT

    On 17 November 2008, the European Commission submitted a recast proposal for a Directive on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products to the Council and the European Parliament with Art. 95 as legal basis. This proposal together with two other proposals on the energy performance of buildings (recast Directive) and on the labelling of tyres with respect to fuel efficiency and other essential parameters (proposal of a Regulation) formed the Energy Efficiency Package tabled by the Commission in November 2008.

    The European Parliament adopted its opinion in first reading on 5 May 2009 approving 60 amendments to the Commission's proposal.

    Following the adoption of the first reading position of Parliament and in view of the entry into force of the new Treaty on the Functioning of the European Union. a two step approach was agreed, in order to facilitate the negotiations procedure:

    - At a first stage reaching agreement on the substance of the Directive. This agreement was concluded in November 2009 and confirmed by means of a Coreper decision on 19 November 2009 and of a letter of ITRE Chairman, dated 2 December 2009.

    - At a second stage reaching agreement on the modifications resulting from the entry into force of the TFEU, concerning notably the adaptation of the legal basis and the provisions on delegated acts. This agreement was concluded in March 2010 by means of a Coreper decision on 24 March 2010 and of a letter of ITRE Chairman, dated 25 March 2010.

    The result of these negotiations formed the Council first reading position in accordance with Article 294 of the TFEU and was adopted on 14 April 2010, thereby, opening the way for an early 2nd reading agreement, meaning approval of the Council's first reading without amendments by Parliament.

    The main elements of the agreement

    - Label and layout: The agreement reached is in line with the main idea of the Parliament's position after the first reading (am 70), as it maintains the idea of an "A-G scale", restricting to three the number of classes that can be added above A - if required by technological progress - and limiting to seven the total number of classes. Moreover it provides the opportunity of rescaling under specific and well-determined conditions. The new review clause asks the Commission to assess by the end of 2014 the need for amending the provisions on the label layout in the light of technical evolution and the understanding by consumers of the label layout.

    - Advertisement: Clear obligation to include reference to the energy label in all advertisements of energy-related products, where price- or energy-related information is disclosed. This mandatory reference was agreed for the first time, taking on board Parliament's first reading position. The Council also fully accepted EP position on mandatory information on energy consumption or a reference to the energy efficiency class of the product in technical promotional material.

    - Public Procurement: National contracting authorities shall try to acquire only such products that have the highest performance levels and belong to the highest energy efficiency class. In addition, national authorities can encourage and reward consumers and industry when they make energy efficient choices by setting specific incentives. Furthermore, incentives for a product provided by Member States for consumers or the industry shall aim at the highest performance levels, including the highest class of energy efficiency.

    - Priority List: Obligation of the Commission to provide a priority list of energy related products that could be covered by implementing measures. Construction products with significant impact on the consumption of energy shall be also included in this priority list.

    Rapporteur's view

    The Energy Labelling Directive has a crucial role to play in the achievement of the EU energy efficiency target of 20% by 2020. In that context it holds a "key role" regarding the fight against climate change, the transition of EU to an efficient, sustainable and competitive economy, and the strengthening of Europe's energy security. Our aim is to pave the way towards a win-win situation, both for the market and the consumers, by guaranteeing every consumer's access to proper information and full awareness about the impact of his or her choices. In that framework, the agreement reached on the Energy Labelling Directive brings an important added value.

    In particular, the mandatory mention of the energy label in advertisements will put an end to misinformation of end-users, giving them all the information they need to make fully informed choices. At the same time, due to the strong insistence of the Parliament, the introduction of an open scale layout was avoided, and maintaining the model of an A-G scale that has a well proven value for the consumers so far, was guaranteed. Moreover in terms of review of the classes, the possibility and the criteria of rescaling are clearly defined in a way that leaves no loopholes. In that context should there be a need to add additional classes to the ones already foreseen, this will automatically lead to rescaling process. Moreover the addition of a general review clause allows for a thorough re-examination in the light of technical evolution and consumer understanding of the label no later than 2014. This is one more safeguard that the consumer-friendly scale as decided so far will remain unchanged at least until the review takes place.

    OPINION OF THE COMMITTEE ON LEGAL AFFAIRS ON THE LEGAL BASIS

    28.4.2010

    Mr Herbert Reul

    Chair

    Committee on Industry, Research and Energy

    BRUSSELS

    Subject:           Opinion on the legal basis of the Proposal for a directive of the European Parliament and of the Council on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products (COM(2008)0778 – C7‑0412/2008 – 2008/0222(COD))

    Dear Mr Chair,

    By letter of 23 March 2010 you asked the Committee on Legal Affairs pursuant to Rule 37(2) to consider whether the legal basis of the above Commission proposal was appropriate.

    The committee considered the above question at its meeting of 28 April 2010.

    By letter of 23/03/10 you informed the Legal Affairs Committee of a change of legal basis suggested by the Council for the proposed re-cast of the Energy Labelling Directive[1]. The Council has indicated its intention to use this new legal basis in its imminent Common Position and it would seem that your committee has indicated its own pre-disposition towards approving the change. Leaving aside the seemingly undisputed consensus in favour of this action, it is considered that it is necessary, under to Rule 37 of Rules of Procedure [2], that the Legal Affairs Committee should give its opinion on this change in legal basis as compared with the original Commission proposal.

    The aim of this note will therefore be to determine the appropriate legal basis for the Commission's proposal for a directive on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products[3] (hereinafter "the proposal"), which seeks to recast Council Directive 92/75/ECC (hereinafter "the Energy Labelling Directive" or "ELD"). The Commission has proposed Article 114 TFEU as the legal basis, while the Council proposes a switch to Article 194 TFEU.

    General considerations

    The choice of legal basis is important because the Union is constitutionally founded upon the principle of conferral of competences; Community institutions can only act in a manner consistent with the mandate provided them by the Treaty[4].

    The case law of the Court establishes that the choice of legal basis is not subjective. A consistent set of criteria have been developed which are applicable in the determination of correct legal bases. The ultimate choice must be based on objective factors which are amenable to judicial review, such as the aim, object and content of the legislative act in question[5]. The fact that an institution wishes to participate more fully in the adoption of a given measure, the work carried out in other respects in the sphere of action covered by the measure and the context in which the measure was adopted are all irrelevant.[6]

    Legal bases under consideration:

    Article 95 EC, which replaced the old Article 100a TEC, constituted the legal basis for the ELD. The Commission intimated in December 2009 that the corresponding Article 114 TFEU should be retained for the present proposal. As against this, the Council proposes Article 194 TFEU, a provision dealing specifically with energy policy, introduced for the first time under Lisbon. The provisions in question are set out as follows:

    Article 114

    (ex Article 95 TEC)

    1.        Save where otherwise provided in the Treaties, the following provisions shall apply for the achievement of the objectives set out in Article 26. The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market.

    2.        Paragraph 1 shall not apply to fiscal provisions, to those relating to the free movement of persons nor to those relating to the rights and interests of employed persons.

    3.        The Commission, in its proposals envisaged in paragraph 1 concerning health, safety, environmental protection and consumer protection, will take as a base a high level of protection, taking account in particular of any new development based on scientific facts. Within their respective powers, the European Parliament and the Council will also seek to achieve this objective.

    4.        If, after the adoption of a harmonisation measure by the European Parliament and the Council, by the Council or by the Commission, a Member State deems it necessary to maintain national provisions on grounds of major needs referred to in Article 36, or relating to the protection of the environment or the working environment, it shall notify the Commission of these provisions as well as the grounds for maintaining them.

    5.        Moreover, without prejudice to paragraph 4, if, after the adoption of a harmonisation measure by the European Parliament and the Council, by the Council or by the Commission, a Member State deems it necessary to introduce national provisions based on new scientific evidence relating to the protection of the environment or the working environment on grounds of a problem specific to that Member State arising after the adoption of the harmonisation measure, it shall notify the Commission of the envisaged provisions as well as the grounds for introducing them.

    6.        The Commission shall, within six months of the notifications as referred to in paragraphs 4 and 5, approve or reject the national provisions involved after having verified whether or not they are a means of arbitrary discrimination or a disguised restriction on trade between Member States and whether or not they shall constitute an obstacle to the functioning of the internal market.

    In the absence of a decision by the Commission within this period the national provisions referred to in paragraphs 4 and 5 shall be deemed to have been approved.

    When justified by the complexity of the matter and in the absence of danger for human health, the Commission may notify the Member State concerned that the period referred to in this paragraph may be extended for a further period of up to six months.

    7.        When, pursuant to paragraph 6, a Member State is authorised to maintain or introduce national provisions derogating from a harmonisation measure, the Commission shall immediately examine whether to propose an adaptation to that measure.

    8.        When a Member State raises a specific problem on public health in a field which has been the subject of prior harmonisation measures, it shall bring it to the attention of the Commission which shall immediately examine whether to propose appropriate measures to the Council.

    9.        By way of derogation from the procedure laid down in Articles 258 and 259, the Commission and any Member State may bring the matter directly before the Court of Justice of the European Union if it considers that another Member State is making improper use of the powers provided for in this Article.

    10.      The harmonisation measures referred to above shall, in appropriate cases, include a safeguard clause authorising the Member States to take, for one or more of the non-economic reasons referred to in Article 36, provisional measures subject to a Union control procedure.

    TITLE XXI

    ENERGY

    Article 194

    1.        In the context of the establishment and functioning of the internal market and with regard for the need to preserve and improve the environment, Union policy on energy shall aim, in a spirit of solidarity between Member States, to:

    (a)    ensure the functioning of the energy market;

    (b)    ensure security of energy supply in the Union;

    (c)    promote energy efficiency and energy saving and the development of new and renewable forms of energy; and

    (d     promote the interconnection of energy networks.

    2.        Without prejudice to the application of other provisions of the Treaties, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall establish the measures necessary to achieve the objectives in paragraph 1. Such measures shall be adopted after consultation of the Economic and Social Committee and the Committee of the Regions.

    Such measures shall not affect a Member State's right to determine the conditions for exploiting its energy resources, its choice between different energy sources and the general structure of its energy supply, without prejudice to Article 192(2)(c).

    3.        By way of derogation from paragraph 2, the Council, acting in accordance with a special legislative procedure, shall unanimously and after consulting the European Parliament, establish the measures referred to therein when they are primarily of a fiscal nature.

    It should be noted that the proposed legal bases do not run contrary to each other and are better regarded as complementary provisions; both are expressly concerned with enhancing internal market integration. But in governing a province of Article 114's wider scheme Article 194 introduces a second policy goal, namely the protection of the environment through energy efficiency. This undoubtedly alters the manner in which it functions. Article 114 is exclusively concerned with economics, specifically the removal of arbitrary barriers which distort the market. As against this it is unavoidable that the pursuit of environmental goals, in the short term at least, can lead to actions running contrary to what value-free economics would prescribe. In short, the provisions have similarities but they are by no means identical.

    However, it is necessary to enter the caveat that merely because a proposed measure is concerned with the energy sector, it does not automatically mean that that measure must be based on Article 194 TFEU. That article must be considered as being confined to energy-policy measures aimed at ensuring the functioning of the energy market, ensuring security of energy supply in the Union, promoting energy efficiency and energy saving and the development of new and renewable forms of energy or promoting the interconnection of energy networks. Energy-policy measures having as their object the establishment and functioning of the internal market must still be based on Article 114 TFEU.

    In determining which of the proposed articles is the appropriate one, the evolution of energy policy as an area of Community competence will be examined as will, hence, the aim and content of the proposal.

    The regulation of energy within the EU before and after the entry into force of the Lisbon Treaty

    Traditionally, the national energy markets have been fragmented and the EC Treaty conferred no specific legislative competence in the area of energy policy. The Community, however, influenced this important policy area by legislating through Treaty provisions dealing with the single market and environmental policy[7].

    The Treaty of Lisbon gives the Union a clearer and more explicit competence in energy policy, with Article 4 TFEU declaring it an area of shared competence[8]. Article 194 TFEU envisages a Community energy policy which coheres with the internal market while promoting the protection and improvement of the environment[9].

    With regard to legal coherence and security, it can be generally stated that the espousal of a specifically-directed legal basis promotes transparency and constitutional legitimacy in Community action. It is especially important to respect these principles in such a strategically significant and politically sensitive area. The Court has held that where a sector-specific legal regime has been adopted, it should be used in preference to residual and general provisions[10].

    The aim and content of the proposed Directive

    Adopted in 1992, the current ELD is a framework in the context of which the Commission can, through implementing measures, prescribe energy-labelling requirements for a relatively concise list of household appliances. Consumers presented with accessible information regarding the efficiency of appliances are thus encouraged to factor energy-cost savings into their choices while manufacturers are given an incentive to develop greener goods and market them accordingly. This dynamic manifestly precipitates concurrent economic and environmental benefits and is consistent with a number of Community policy initiatives[11].

    Impact assessment of the ELD revealed that, in addition to the comprehensive implementation of its present regime, the extension of its scope so as to encompass all energy related products[12] could facilitate huge savings in energy resources[13]. As a result, the Commission, in choosing between four policy options presented under the review procedure, went ahead with the current proposal.

    Further analysis will be facilitated by reference at this point to the 'Legal Basis' section included in the Commission's proposal. In selecting Article 95 EC (114 TFEU) as legal basis the Commission stated:

    The ELD ensures the completion of a well-functioning internal market with a level playing field excluding technical barriers to trade[and] the free movement of products falling within its scope that satisfy the labelling requirements laid down in the implementing measures adopted under the Directive[14].

    The Commission couch their justification of Article 95 EC as the appropriate legal basis in terms exclusively referential of the internal market. This is noteworthy given that the vast bulk of the explanatory memorandum deals with the energy-savings and consequential environmental benefits achievable by way of the proposal.

    Recital 3 of the proposal itself is illustrative to the extent that it is probably worth quoting it in full:

    The provision of accurate, relevant and comparable information on the specific energy consumption of energy related products may influence the end-user's choice in favour of consuming less energy and other essential resources during use, thus prompting manufacturers to take steps to reduce the consumption of energy and other essential resources of the products which they manufacture; it should also, indirectly, encourage the efficient use of these products. In the absence of this information, the operation of market forces alone will fail to promote the rational use of energy and other essential resources for these products.

    Recital 8 states that only energy-related products which have a significant impact on the consumption of energy or the consumption of resources should be subject to implementing legislation, while Recital 12 specifies that energy-efficiency should not be promoted to an extent that produces detrimental environmental consequences overall. None of the proposal's recitals expressly deal with its potential benefits for the internal market. It is significant, for the purposes of the present exercise, that Recital 8 is substantially implemented by Article 1 of the proposed Directive (entitled 'Scope') which limits its ambit to: "energy-related products which have a significant impact on the consumption of energy and, where relevant, on other essential resources during use".

    The purpose evidenced by the foregoing provisions, in conjunction with the policy backdrop against which impact assessment was carried out on the ELD and the general tenor of the explanatory memorandum attending the proposal, make it clear that Article 194 is by far the more appropriate legal basis as between the available alternatives. Any additional coherence granted the internal market by way of the proposal is a benefit incidental to its primary aim, namely the promotion of energy-efficiency and its attendant economic and environmental gains. That all of these effects can result from the proposal is entirely in line with the analysis of the relationship between Articles 114 and 194 TFEU provided above. The determinative factor in our present inquiry is the direct manner in which the purpose of the proposal matches that of Article 194.

    Consequently, this particular measure can be regarded as being primarily directed towards promoting energy efficiency and saving within the meaning of Article 194(1)(c) TFEU. If the proposal, albeit concerned with energy policy, had had as its principal objective the establishment and functioning of the internal market, it would have had to have been based on Article 114. The fact that a new specific legal basis for energy now exists does not mean that all measures concerned with energy must be based on that article.

    Conclusion

    The Court has held that where a sector-specific legal regime has been adopted, it should be used in preference to residual and general provisions[15] and that in principle a measure is to be founded on only one legal basis[16]. In light of these principles and of the foregoing analysis, it is considered that Article 194 TFEU is the appropriate legal basis for this proposal.

    At its meeting of 28 April 2010 the Committee on Legal Affairs accordingly decided, unanimously[17], to recommend that to you that the appropriate legal basis is Article 194 of the Treaty on the functioning of the European Union.

    Yours sincerely,

    Klaus-Heiner Lehne

    • [1]  Council Directive 92/75/EEC of 22/09/1992 on the indication by labelling and standard product information of the consumption of energy and other resources by household appliances, OJ L 297, 13.10.1992, p. 16.
    • [2]  Rule 37(5): Amendments tabled in Parliament to change the legal basis of a proposal for a legislative act without the committee responsible for the subject-matter or the committee responsible for legal affairs having disputed the validity or appropriateness of the legal basis shall be inadmissible.
    • [3]  COM (2008) 778 final.
    • [4]  Opinion 2/00 of 6/12/2001 on the Cartagena Protocol [2001] ECR I-9713, at para. 3.
    • [5]  See, for instance, Case C-300/89 Commission v. Council [1991] ECR I-2867; Case C-269/97 Commission v. Council [2000] ECR I-2257 and Case C-176/03 Commission v. Council [2005]
      ECR I-7879.
    • [6]  Case C-269/97 Commission v. Council, cited above, at para. 44.
    • [7]  An example is Directive 2005/32/EC of the European Parliament and the Council of 6/7/2005 establishing a framework for the setting of ecodesign requirements for energy-using products and amending Council Directive 92/42/EEC and Directives 96/57/EC and 2000/55/EC of the European Parliament and the Council, OJ L 191, 22.7.2005, p. 29.
    • [8]  Article 4 (2) (i).
    • [9]  B. Delvaux, A. Guimaraes-Purokoski: EU Energy Law and policy issues, ELRF Collection, 1st edition (editors B. Delvaux, M. Hunt, K. Talus) pp. 13-16, 27-28.
    • [10]  Case C 376/98 Germany v. European Parliament and Council [2000]ECR I-8419.
    • [11]  Sixth Community Environment Action Programme, Decision No. 1600/2002/EC; Integrated Product Policy Building on Environmental Life-Cycle Thinking, IPP (COM (2003) 302 final) and the Better Regulation: Simplification Strategy, COM (2005) 535 final of 25.10.2000.
    • [12]  Windows and insulating products, for example.
    • [13]  27 mega tonne oil equivalent (a unit of energy).
    • [14]  SEC (2008) 2862, at p.6.
    • [15]  See footnote 8
    • [16]  Case C-91/05 Commission v. Council [2008]ECR I-3651.
    • [17]  The following were present for the final vote: Klaus-Heiner Lehne (Chair),

    PROCEDURE

    Title

    Labelling and standard product information of the consumption of energy and other resources by energy-related products (recast)

    References

    05247/1/2010 – C7-0094/2010 – 2008/0222(COD)

    Date of Parliament’s first reading – P number

    5.5.2009                     T6-0345/2009

    Commission proposal

    COM(2008)0778 - C6-0412/2008

    Date receipt of common position announced in plenary

    19.4.2010

    Committee responsible

           Date announced in plenary

    ITRE

    19.4.2010

    Rapporteur(s)

           Date appointed

    Anni Podimata

    21.7.2009

     

     

    Legal basis disputed

           Date of JURI opinion

    JURI

    28.4.2010

     

     

     

    Date adopted

    28.4.2010

     

     

     

    Result of final vote

    +:

    –:

    0:

    51

    0

    0

    Members present for the final vote

    Jean-Pierre Audy, Zigmantas Balčytis, Bendt Bendtsen, Jan Březina, Reinhard Bütikofer, Maria Da Graça Carvalho, Giles Chichester, Christian Ehler, Lena Ek, Ioan Enciu, Gaston Franco, Adam Gierek, Norbert Glante, Fiona Hall, Jacky Hénin, Sajjad Karim, Arturs Krišjānis Kariņš, Philippe Lamberts, Bogdan Kazimierz Marcinkiewicz, Jaroslav Paška, Aldo Patriciello, Anni Podimata, Miloslav Ransdorf, Herbert Reul, Teresa Riera Madurell, Jens Rohde, Paul Rübig, Amalia Sartori, Francisco Sosa Wagner, Konrad Szymański, Britta Thomsen, Patrizia Toia, Evžen Tošenovský, Claude Turmes, Vladimir Urutchev, Adina-Ioana Vălean, Alejo Vidal-Quadras

    Substitute(s) present for the final vote

    Antonio Cancian, Matthias Groote, Françoise Grossetête, Oriol Junqueras Vies, Ivailo Kalfin, Alajos Mészáros, Ivari Padar, Vladko Todorov Panayotov, Markus Pieper, Vladimír Remek, Frédérique Ries, Theodoros Skylakakis, Silvia-Adriana Ţicău, Hermann Winkler