Energy audit requirements and standards in Hungary

Article 8 of the EED is implemented into Hungarian law by Act LVII of 2015 on energy efficiency (“Energy Efficiency Act”) (effective as of 07/06/2015), the execution decrees of the Energy Efficiency Act and Act XXXIV of 2004 on small and medium-sized enterprises and the support provided to such enterprises (the “SME Act”).

As of 26/12/2015 the Energy Efficiency Act was amended by Act CXCVI of 2015 (“Enacted Modifications”).

As a general rule, qualifying undertakings are obliged to undertake energy audits once every four years (a “Mandatory Energy Audit”).

In the first compliance year, qualifying undertakings are required to complete Mandatory Energy Audits by 05/12/2015. This obligation is also deemed to be complied with, however, where the qualifying undertaking has an energy audit undertaken between 04/12/2012 and 05/12/2015 by a person who is not registered on the list of energy auditors, but who meets the criteria (including but not limited to professional qualifications / experience) which apply to energy auditors (set out in the Energy Efficiency Act and its execution decree). We note, however, that in certain cases it may require further examination whether the auditors of such previously done audits meet the professional qualifications / experience required (e.g. the equivalency of foreign qualification / experience may be decided upon). In these cases, the Hungarian Energy and Public Utilities Regulatory Authority (“HEPURA”) enjoys discretional rights to interpret the legal requirements on equivalency during determining the eligibility of the auditors.

Under the Energy Efficiency Act (and the Enacted Modifications), qualifying undertakings are large corporations. The Enacted Modifications makes it clear that large corporations are those which do not qualify as micro, small or medium-sized enterprise (“SME”) under the SME Act not considering paragraph 3(4) of the SME Act.

In line with the EED, the SME Act provides that an SME is an entity which: (a) employs fewer than 250 people; and (b) has an annual net turnover not exceeding the forint equivalent of EUR 50 million, or an annual balance sheet total not exceeding the forint equivalent of EUR 43 million.

Accordingly, based on the guidance of 18/01/2016 issued by the HEPURA on the interpretation of the Hungarian energy efficiency legislation, large corporations (qualifying undertakings) are those which meet any of the following criteria:

1. i. ≥ 250 employees; and an annual net turnover > EUR 50m; and a balance sheet total > EUR 43m; or
2. ii. ≥ 250 employees; and an annual net turnover > EUR 50m; and a balance sheet total ≤ EUR 43m; or
3. iii. ≥ 250 employees; and an annual net turnover ≤ EUR 50m; and a balance sheet total > EUR 43m; or
4. iv. ≥ 250 employees; and an annual net turnover << EUR 50m; and a balance sheet total ≤ EUR 43m; or
5. v. << 250 employees; and an annual net turnover > EUR 50m; and a balance sheet total > EUR 43m.

If an entity has any linked and/or partner enterprises, the data of all of its linked and/or partner enterprises - regardless of the location of the registered seat, site, brand office of the relevant linked and/or partner enterprises – shall also be considered together with its own data to determine whether the entity is a large corporation (qualifying undertaking).

Before 26/12/2015 in Hungary there was not a particular date where an organisation had to assess whether it qualified or not. Instead, as of the effective date of the Energy Efficiency Act, all qualifying undertakings had to comply with its provisions.

As of 26/12/2015, the Enacted Modifications introduced a self-assessment system whereby corporations have to assess whether they qualify as large corporations in respect of the Energy Efficiency Act. If yes, they have to comply with a registration obligation for large corporations (qualifying undertakings) introduced by the Enacted Modifications. Initial registration must take place by 20/01/2016 and from then large corporations must register themselves annually, via an online platform on the website of HEPURA, by 30 June each year.

The Enacted Modifications also introduced a data provision obligation on large corporations (qualifying undertakings) requiring them to disclose for example energy consumption data for the previous year, energy efficiency steps which were taken in the previous year and those steps they intend to take in the future along with proposed deadline for performance. The detailed rules of these data provision obligations (including deadline(s)) will be set out in a decree of the director of HEPURA (which has yet to be published at the date of this chapter).

The Enacted Modifications also introduced provisions on the energy audit obligations of owners (landlords) and tenants of the same building.

Large corporations (qualifying undertakings) shall be fined up to HUF 1m (approximately EUR 3,237) if there is a delay or failure to meet either the registration obligation or the data provision obligation introduced by the Enacted Modifications.

Qualifying undertakings shall be fined up to the maximum of HUF 10m (approximately EUR 32,368), in case of failing to:

1. complete a Mandatory Energy Audit within the remedy period provided by HEPURA after being requested by HEPURA to do so; or
2. meet its cooperation obligations (also including providing HEPURA with the energy audit) during the mandatory energy audit examination.

Fines may be imposed repeatedly. The minimum amount of a repeatedly imposed fine is 150% of the amount of the previously imposed fine, while its maximum amount may run up to HUF 15m (approximately EUR 48,552).

No fines will be imposed for the lack of a Mandatory Energy Audit until 31/12/2016.

If the energy audit is “unworkmanlike” or contains false data, the energy audit company/energy auditor shall be fined. If certain additional conditions are also met, HEPURA shall forbid the energy auditor/energy audit company from carrying out its energy audit activity.