CMS Expert Guide to EU Mandatory Energy Assessment Requirements
The EU Energy Efficiency Directive
The Energy Efficiency Directive or “EED” (Directive 2012/27/EU of the European Parliament and of the Council on energy efficiency) which came into force on 14 November 2012, contains a number of measures intended to increase energy efficiency across the European Union. It established a common framework of binding measures for the promotion of energy efficiency in order to ensure the achievement of the Union’s 2020 20% headline energy efficiency target, and to pave the way for further energy efficiency improvements beyond 2020. One aspect, which is proving particularly controversial, is the introduction of mandatory energy assessments.
This Expert Guide on EU mandatory energy assessments
Article 8 of the EED requires Member States to introduce a programme of regular energy assessments or “audits” for large enterprises (non-SMEs) by 5 December 2015 (and every four years thereafter). Enterprises based in a number of different Member States will therefore need to understand how this aspect of the EED will apply in each Member State and plan accordingly.
This Expert Guide has been designed to assist with this process and provides a simple headline overview of the following key energy assessment aspects, across 18 Member States:
- (i.) identification of the relevant implementing measure(s)/policy (whether in draft or final form);
- (ii.) implementation status (i.e. whether the legislation/policy is in force and where in the legislative timeline it is up to);
- (iii.) qualification criteria (i.e. who is obliged to comply);
- (iv.) routes to compliance (including key compliance dates);
- (v.) sanctions for non-compliance; and
- (vi.) local contacts for further information.
To read about EU Mandatory Energy Assessment Requirements in a specific country, click on the appropriate country in the map below.
Comment: differential qualification criteria and routes to compliance
Although the fundamental obligations/objectives and the requirement to implement the EED measures should not differ between Member States, there is some flexibility in approach. For example in the UK, the Article 8 EED implementing legislation is the Energy Savings Opportunity Scheme Regulations 2014 (the “ESOS Regulations”). Under the ESOS Regulations, once one UK corporate entity qualifies, all of its UK operations also qualify automatically – a so-called “one in, all in” scheme. However, this is not uniformly the case across Member States and, for example, in France the obligation to undertake energy audits extend only to the qualifying entity, not automatically to any non-qualifying group members. Some implementing measures also include express confirmation that overseas parent companies that do not have a registered presence in a particular Member State, may also have to undertake audits for any operation(s) or establishment(s) they have in that State in accordance with that State’s implementing measures. Undertakings will therefore need to look carefully at the different qualifying criteria in each Member State where they have a presence or operation.
Member States were required to implement these energy audit obligations by 5 June 2014. However, implementation is at very different stages and many missed this deadline. In some States, the requirements have still not been implemented. The European Commission is monitoring the position. In 2014 the Commission began legal proceedings against all but one Member State, including for reasons of failure to implement entirely or failure to implement sufficiently the requirements of the EED. Further action has been taken against certain Member States in February and April this year. There is a concern that Member States who have not already implemented the EED requirements or who, in the Commission’s view, have not done so satisfactorily, will rush through new or amending legislation and policy. This could conceivably result in practically unworkable schemes, confusion as to qualification criteria and compliance, or the imposition of onerous requirements on qualifying undertakings with little notice.
By their very nature, the energy assessment requirements in Article 8 EED are not sector specific. They will generally apply across most sectors including retail, hospitality, transport, manufacturing, property (with implications for owners, tenants and investors), financial services (including as trustees and asset managers) and those operating in the energy efficiency market. Once within scope participants will need to assess the best routes to compliance and the timetabling of actions including any applicable notifications.
Given the compliance deadline of 5 December 2015, all undertakings should be looking at the requirements in Member States where they have a presence to assess whether they may qualify. If so, the qualifying undertaking should review which of its operations and group members may be covered, the scope and extent of the obligations and key compliance and notification dates. If not already doing so, those impacted should start taking strategic steps now to attain the compliance deadline. Further information is available from the named contacts in each jurisdiction.