By Carlos Marin, head of energy efficiency at STX Group

Carlos Marin, head of energy efficiency at STX Group

Energy efficiency is often thought of as implementing heat recovery solutions or replacing machinery with more efficient alternatives. Those are important, but they represent only part of a larger opportunity. One of the cheapest and most overlooked sources of efficiency is transport. With the EU’s revised Energy Efficiency Directive and the UK’s Energy Act now in force, albeit through different policy mechanisms, policymakers and businesses have a chance to broaden the definition of efficiency to include electrified fleets, intermodal freight and smart mobility. By using market mechanisms, both markets can drive down emissions while delivering measurable commercial value.

Electric vehicles are the clearest example. They are fundamentally more efficient than combustion vehicles, with energy use cut by a factor of two to four, according to the United Nations Environment Programme (UNEP). A company that electrifies a large fleet immediately achieves significant efficiency gains. But with the right incentives and measurement frameworks, OEM (original equipment manufacturers) and fleet operators can go further and capture tradable value from these efficiency improvements.

White certificate schemes, or energy savings certificates, provide one such framework. These market-based mechanisms channel finance into efficiency projects and reward companies for delivering measurable savings. France’s white certificates (CEE) system is the largest and most mature example in Europe. It obliges energy suppliers to achieve savings by funding projects or by buying certificates from savings achieved by already implemented projects. Each year, it directs billions of euros into measures ranging from insulation to industrial upgrades. Crucially, unlike other schemes, it has a clear focus on efficient transportation solutions. That means the CEE system can support both vehicle electrification and modal shift, for example, making rail freight more competitive.

Transporting goods more efficiently is one of the most urgent challenges in decarbonisation, which is what makes France’s CEE system such an interesting case study. Intermodal transport (shifting goods from trucks to trains) can deliver substantial energy and carbon savings, with direct benefits for the Scope 3 emissions of major shippers. It is true that rail freight faces higher operating costs and more coordination challenges than road transport, which can deter companies. Yet, the upside is significant: per tonne-kilometre, rail can slash emissions by as much as 80%. White certificate schemes can help close the competitiveness gap by monetising the energy savings from modal shift.

Despite that, only 4% of the CEE budget is allocated to the transport sector in France. This situation is due to little-known and underutilised incentives and reflects limited awareness and fragmented policy design across Europe. A more coordinated approach that explicitly recognises electrification could turn rail into one of the continent’s most cost-effective efficiency levers.

Currently, within the European Union, the Energy Efficiency Directive allows energy savings associated with the electrification of transport to be recognised under national energy efficiency schemes, while the Renewable Energy Directive enables the renewable electricity used to charge electric vehicles to be valorised toward renewable energy targets. Together, these regulatory schemes can help reduce the total cost of ownership of electric vehicles and strengthen the business models of fleet operators. In the UK, similar economic benefits for fleet operators are driven instead by domestic transport, energy and tax policies, rather than by direct equivalents to the EU’s Energy Efficiency and Renewable Energy Directives. Within the European Union the Renewable Energy Directive requires accounting for all MWh supplied to public transport, it also strongly encourages the valorisation of private charging, provided this can be done in a consistent, simple and secure way, either through standardised statistical methods or through accurate metering systems that eliminate the risk of double counting.

Offering the possibility to valorise efforts linked to powertrain transitions and to recognise the renewable electricity used to operate these vehicles appears to be the right path to decarbonise transport across Europe, without increasing the public debt. A route that the UK could follow.

For European fleet operators – and through other financial and regulatory incentives, UK fleet operators – the benefits go beyond energy savings. Certificate revenues reduce upfront capital costs for EVs and chargers and reduce the overall total cost of ownership of a fleet. For markets, expanding tradable efficiency instruments into transport creates new environmental commodities, assets that investors and corporates can price, trade and retire against net zero goals. Moving to market-based mechanisms such as CEEs in France or CAEs in Spain would amplify this impact and draw in more private investment.

Energy efficiency must evolve beyond its traditional boundaries. Electrified fleets, smart mobility solutions such as telematic and car sharing, rail solutions and smarter incentive design represent some of the largest untapped opportunities for both energy efficiency and decarbonisation. By broadening the scope and updating the mechanisms that support it, European and UK policymakers can speed the journey to net zero while creating economic value for businesses and consumers.