The Energy Efficiency Directive

The new Energy Efficiency Directive (EED) (EU) 2023/1791 was adopted in July 2023 and entered into force in October 2023.

It replaced the previous Energy Efficiency Directive (EED) (2012/27/EU) entered into force on 5 December 2012, which was amended in December 2018, as part of the ‘Clean energy for all Europeans package’, with the amending Directive on Energy Efficiency (2018/2002) to update the policy framework to 2030. See sections below about the successive versions of the EED.

More specifically about the main changes in the new EED2023 to Member States’ energy savings obligation (former Article 7, now Article 8 EED), see this infographic.

And for a more comprehensive analysis, see our report on the implications of the fit-for-55 package on Member States’ energy savings obligation.

You can also look at the webinar discussing this new context: Energy savings obligation’s road to 2030: bigger, cleaner, fairer!

Our objectives

Facilitate and expand knowledge and experience sharing amongst Member States for the implementation of policies to meet their energy savings obligation (Article 8 EED) through tailored policy support and in-depth experience sharing and collaboration among key stakeholders.

Develop a suite of tailored resources and tools for the implementation of Member States' energy savings obligation (Article 8 EED) to address the specific needs of Member States and stakeholders.

Assist national authorities' in-house EM&V (Evaluation, Monitoring & Verification) schemes and savings calculation to ensure they have robust data and insight to inform the (re)design of policies towards 2030.

The 2012 Energy Efficiency Directive established a set of binding measures to help the EU reach its 20% energy efficiency target by 2020. Under the directive, all EU countries are required to use energy more efficiently at all stages of the energy chain, including energy generation, transmission, distribution and end-use consumption.

The provisions of 2012 directive included:

  • former Article 3 EED: indicative headline energy efficiency target in terms of primary and final energy consumption not to be exceeded in 2020, with each Member State to define its national contribution to this EU target
  • former Article 7 EED (and Annex V EED): an energy savings obligation to Member States, to achieve new annual energy savings each year equivalent to 1.5% in national energy sales (with possible exclusion of energy sales in transport, and exemptions capped to 25% of the energy savings target), using Energy Efficiency Obligation Schemes (EEOS) and/or Alternative measures (see the Country pages, to find what policy measures have been used by each Member State)
  • former Article 5 EED: mandatory renovation rate of at least 3% per year of buildings owned and occupied by central governments, or use of an alternative approach to achieve an equivalent amount of energy savings.
  • former Article 4 EED: national long-term renovation strategies (LTRS) for the building stock in each EU country (provision transferred in 2018 in the EPBD – Energy Performance of Buildings Directive, Article 2a)
  • former Article 8 EED: mandatory energy audits for large companies at least every four years
  • former Articles 9 to 11 EED: provisions on energy metering and billing, to protect the rights of consumers to receive easy and free access to data on their energy consumption
  • the requirement for Member States to report national energy efficiency action plans (NEEAPs) every three years, as well as their progress about former Articles 3, 5 and 7 and other relevant updates in an annual report to the EED.

 

Other directives and regulations complement the EED to support energy efficiency improvements:

  • the Energy Performance of Buildings Directive, setting the framework for minimum energy performance requirements for new buildings and major renovations, and a whole set of provisions to improve energy efficiency in buildings, heating and cooling systems.
  • the energy labelling and ecodesign legislation setting minimum energy efficiency standards and labelling for a variety of products such as boilers, household appliances, lighting and televisions.

 

The Commission also published in 2017 a brochure providing  examples of good practice in the field of energy efficiency.

In 2018, as part of the ‘Clean energy for all Europeans package‘, the new amending Directive on Energy Efficiency (2018/2002) was agreed to update the policy framework to 2030 and beyond.

The key element of the amended directive is a headline energy efficiency target for 2030 of at least 32.5%. The binding target, to be achieved collectively across the EU, is set relative to the 2007 modelling projections for 2030.

The directive allows for a possible upward revision in the target in 2023, in case of substantial cost reductions due to economic or technological developments. It also includes an extension to the energy savings obligation in end use, introduced in the 2012 directive. Under the amending directive, EU countries will have to achieve new energy savings of 0.8% each year of final energy consumption for the 2021-2030 period.

Taking account the withdrawal of the UK, the Commission has taken a decision that the equivalent target after the UK no longer applies EU law should be no more than 1128 Mtoe of primary energy and no more than 846 Mtoe of final energy.

Although the deadline for transposition into national law by Member States had a deadline of by 25 June 2020, by 31 August 2020, the Commission received notifications from only thirteen Member States (Austria, Croatia, Czechia, Denmark, France, Germany, Italy, Latvia, Lithuania, the Netherlands, Poland, Spain and Sweden) and the United Kingdom. In addition, most of these notifications are partial, meaning that some provisions of the Directive have not yet been transposed or notified.  Under the Governance Regulation 2018/1999, Member States are required to draw up integrated 10-year national energy & climate plans (NECPs) outlining how they intend to meet the energy efficiency and other targets for 2030.

The new Energy Efficiency Directive (EED) (EU) 2023/1791 was adopted in July 2023 and entered into force in October 2023.

It replaced the previous Energy Efficiency Directive (EED) (2012/27/EU) entered into force on 5 December 2012, which was amended in December 2018, as part of the ‘Clean energy for all Europeans package‘, with the amending Directive on Energy Efficiency (2018/2002) to update the policy framework to 2030.

The new EED was proposed by the European Commission in July 2021, as part of the fit-for-55 package, a comprehensive set of legislative proposals (in total 13 new and revised legislations) to align the EU climate and energy policy architecture with the umbrella climate target increased by the EU Green Deal and then European Climate Law to a 55% net reduction in greenhouse gas (GHG) emissions by 2030 (vs. 1990 levels), and with the long-term goal of achieving carbon neutrality by 2050.

The new EED revised the numbering of the Articles, making that the energy savings obligation is now Article 8 (formerly Article 7), with complementary Articles 9 and 10 (formerly Articles 7a and 7b) and Annex V.

But more than a renumbering, the new EED and the fit-for-55 package have brought major changes with implications on Member States’ energy savings obligation.

The main changes to the energy savings obligation are summarized in this infographic.

For a more comprehensive analysis, see our report on the implications of the fit-for-55 package on Member States’ energy savings obligation.

You can also look at the webinar discussing this new context: Energy savings obligation’s road to 2030: bigger, cleaner, fairer!

To support the achievement of EED goals, former Article 7 now Article 8 EED requires Member States to achieve new annual energy savings each year through an energy efficiency obligation scheme (EEOS) or alternative measures.

Article 7 of the 2012 EED (2012/27/EU) required each Member State to achieve an annual reduction of 1.5% in national energy sales in each of the years from 2014 to 2020 inclusive. In practice, this target is to be achieved in terms of cumulative energy savings over the energy savings obligation period (first 2014-2020, now 2021-2030). And provisions in the EED2012 allowed Member States to reduce their energy savings target by about half (i.e. to an equivalent annual rate of 0.75%).

Directive (2018/2002/EU) amended this goal with new savings each year from 2021 to 2030 of 0,8 % of annual final energy consumption (Cyprus and Malta 0,24%).

The new Directive (EU) 2023/1791 revised the energy savings obligation for 2021-2030, with a progressive increase in the required minimum rate of new annual energy savings: 1.3% in 2024-2025, 1.5% in 2026-2027, 1.9% in 2028-2030 (and beyond 2030). Still with a difference for Cyprus and Malta (rate of 0.45% from 2024 to 2030).

Annex V of the EED sets out methodological options for the calculation of energy savings; principles to apply to the calculation of additionality to European Union law and the materiality of the activities of obligated, participating or entrusted parties; requirements for Monitoring & Verification systems; a requirement to ensure that quality standards for energy efficiency measures are introduced and maintained; and a methodology for the notification of policy measures to the European Commission.

When a Member States choses to implement an EEOS, obligated energy companies have to carry out measures which help final consumers improve energy efficiency. This may include for example improving the energy efficiency of building envelopes, early replacement of electric motors, installing energy management systems, eco-driving programmes…

EU countries may also implement alternative policy measures, including (non-exhaustive list):

  • Financial incentives that lead to an increased use of energy efficient technologies
  • Energy or CO2 taxes
  • Regulations or voluntary agreements that lead to the increased use of energy efficient technologies
  • Energy labelling schemes beyond those that are already mandatory under EU law
  • Training and education, including energy advisory programmes

 

Member States choose EEOS, Alternative measures or a combination of both, more information is available here.

The European Commission published an Annex to Commission Recommendation on transposing the energy savings obligations under the Energy Efficiency Directive on Article 7 EED. It outlines the steps Member States need to take when implementing Article 7 and provides guidance on:

  • Calculation of cumulative energy savings in second EED period
  • Choice of policy measures to achieve required amounts trough EEOS and alternative policy
  • Impact of the first period
  • Measurement, monitoring, verification and other relevant subjects.

View the 2019 Recommendation including its annex with guidelines (available in all national languages of EU Member States).

Interactions between the energy savings obligation, other provisions of the EED, and more broadly with the fit-for-55 package

The purpose of the Directive is to establish a common framework of measures to promote energy efficiency within the European Union in order to ensure that the EU’s 2030 headline target on energy efficiency is met and contributes to the EU’s overall energy and climate objectives.

The Directive consists of the number of important measures, covered by different Articles. Besides Article 8 (former Article 7) described above, the following provisions may have interactions with the energy savings obligation.

Key provisions in the EED are summarized below. For more details, as well as an analysis of the fit-for-55 package, see our report on the implications of the fit-for-55 package on Member States’ energy savings obligation.

Article 11 (former Article 8): Obliges energy-intensive and motivates all other companies to implement energy management systems or audits.

Energy management systems and energy audits are an essential tool to achieve energy savings. They are necessary to assess the existing energy consumption and identify the whole range of opportunities to save energy. This should then result in an action plan or roadmap to improve energy efficiency in companies and public bodies.

Multiple impacts of energy efficiency policies

Energy efficiency measures have positive impact on not only the energy savings and emission reduction, but also on air pollution, health, and ecosystems, resource consumption, the economy and energy security.

Articles 5, 6 and 7 (former Articles 5 and 6): Exemplary role of the public sector

The new EED2023 introduces a new obligation of 1.9% annual energy consumption reduction (compared to 2021) for the public sector (new Article 5 EED).

In addition, the previous obligation for Member States to renovate annually 3% of the total floor area of the central government buildings is extended to cover all building owned by public bodies , thereby adding the regional and local levels to the obligation’s scope (now Article 6 EED, former Article 5 EED). The revision also clarifies that the renovations should aim at transforming the public buildings into Nearly-zero energy buildings (NZEBs) or Zero-Emission Buildings. 

Finally, when it comes to public procurement (now Article 7 EED, former Article 6 EED), Member States shall ensure that contracting authorities and contracting entities purchase only products, services, buildings and works with high energy efficiency performance in accordance with Annex ΙV requirements, while for those contracts and concessions where no specific requirement is mentioned, Member States shall ensure that the energy efficiency first principle is applied 

Article 4: Contributions of Member States towards the EU’s headline energy efficiency target

The new EED2023 revised the headline energy efficiency target formerly set in Article 3 of the amending EED2018.

The revised target is an EU-wide final energy consumption reduction target of at least 11.7% in 2030 compared to the energy consumption forecasts for 2030 made in 2020. This can be translated to an upper limit of 763 Mtoe and 992.5 Mtoe of EU’s final and primary energy consumption respectively, with the final energy consumption limit to be collectively binding. Member States will contribute to the overall target through the indicative national contributions and trajectories, set in their updated NECPs. A formula for each Member State to calculate their national contribution is added as Annex I of the EED recast.

 In case the national contributions do not add up to achieve the target, the Commission will initiate a gap-filling mechanism to correct and increase the national contributions that are below the corresponding amount calculated using the formula of Annex I. 

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