UK-4:Energy Efficiency Directive
The Energy Efficiency Directive was adopted by the European Parliament in 2012 and is to be transposed by Member States in 2013. The Directive sets measures that will help achieve the EU-wide 20% energy saving target by 2020 and affects the whole energy system (energy supply, transformation and distribution, energy use). The Energy Efficiency Directivet will drive industrial energy conservation through mandatory energy audits for large companies, energy supplier obligations, incentives for energy management systems implementation and cost-benefit analysis for adopting combined heat and power.
The Energy Efficiency Directive (EED) was adopted by the European Commission on October 25, 2012. The directive establishes a framework of measures for promoting energy efficiency in order to bridge the gap between current policies and those required to achieve the objective of saving 20% of the EU's primary energy consumption compared to projections for 2020 .. It also paves the way forward for future energy efficiency improvements. The directive establishes rules to remove market barriers, overcome market failures and provides for the establishment of indicative national energy efficiency targets for 2020 . The Directive drives legally binding measures to ensure Member States use energy more efficiently and set national targets for 2020. The measures resulting from the Directive are expected to result in a reduced 15% total energy savings by 2020. The remaining 5% of the energy saving target will be taken care of by the Ecodesign Directive and tougher emission standards for cars and vans.
The Energy Efficiency Directive adopts measures that affect the whole energy system (energy supply, transformation and distribution, energy use) and have an impact on several stakeholders including governments, energy companies, energy retailers and distributors, industries and other end-users. Among the key measures of the EED are:
- An obligation on energy suppliers to deliver an annual 1.5% energy saving among end-users (both industrial and private consumers);
- A 3% renovation target for central government offices, first applying to "total useful floor areas" of more than 500 square meters and then to those of more than 250 square meters from July 2015;
- EU Member States must draw up roadmaps to make the entire building sector more energy efficient by 2050, and;
- Energy audits and management plans are required for large companies, with cost-benefit analyses for the deployment of combined heat and power generation (CHP) and public procurement .
Measures that will have most impact on the industrial sector include:
- Member States have to create incentives for SMEs to undergo energy audits
- Dissemination of best practices on benefits of energy management systems for SME businesses by the Commission
- Mandatory audits for all large companies other than SMEs (*1).
- Incentives for the implementation of measures recommended by audits (among others tax incentives, financial aid and advisory services) and the introduction of Energy Management Systems for large companies .
Mandatory audits must be carried out every four years. There is a possibility to implement the obligation of auditing under voluntary agreements. Furthermore, companies that are already implementing an energy or environmental management system that is certified by an independent body according to the relevant European or international standards are exempt from this requirement, provided the management system includes an energy audit .
All substantive provisions of Directives 2004/8/EC (promotion of cogeneration) and 2006/32/EC (energy end-use efficiency and energy services) were repealed when the new EED came into effect.
By April 2013, each EU Member State had to present its national programme for the implementation of the Energy Efficiency Directive, including an national indicative energy savings target. The UK agreed to a national indicative target of 129.2 Mtoe on a net calorific value basis for final energy consumption in 2020 which is equivalent to a 18% reduction from BAU from the UK’s 2007 business as usual project projection for 2020 .
By June 2014, the EC must report on whether the national EE targets and implementation plans will be sufficient to reach the EU 20% EE target. By 30 April 2014, and every three years thereafter, Member States shall submit National Energy Efficiency Action Plans . In 2016, the EED will be reviewed by the European Commission.
Policy Information Expand this section for information on the key features of the policy, such as its date of introduction, categorization, main objective(s) and linkages with other policies.
Policy Instrument Type: Administrative, Economic, Incentives & Subsidies, Information & Outreach
Position in the PyramidAbout Us
Start Date: 0201
|Complements||EU Emissions Trading System (EU ETS)||Effort Defining|
|Complements||Ecodesign Directive (Market Transformation Programme)||Effort Defining|
Department of Energy and Climate Change
Primary Objective: Energy
This Directive establishes a common framework of measures for the promotion of energy efficiency within the Union in order to ensure the achievement of the Union’s 2020 20% headline target on energy efficiency and to pave the way for further energy efficiency improvements beyond that date
Governments, energy companies, energy retailers and distributors, industries and other end-users.
Driver of energy consumption or emissions affected by policy: Energy efficiency
Implementation Information Expand this section for information on targets, monitoring, verification and enforcement regimes, and implementation requirements and tools.
Quantitative Target? yes
Target: By April 2013, each EU Member State has to present its indicative national energy savings target. The UK agreed to a national indicative target of 129.2 Mtoe on a net calorific value basis for final energy consumption in 2020 .
Time Period: 2013-2020
Progress Monitored? yes
Verification Required? yes
Requirements on the Target Group
Specific requirements are not yet available. Preliminary requirements relevant to industry include:
- Mandatory audits for all large companies other than SMEs. Audits have to be carried out every four years. There is a possibility to implement the obligation of auditing under voluntary agreements. Furthermore, companies that are already implementing an energy or environmental management system that is certified by an independent body according to the relevant European or international standards would be exempted from this requirement, provided the management system includes an energy audit .
- Member States would need to carry out and notify to the Commission by December 2015 a "comprehensive assessment" of the scope for applying high-efficiency cogeneration. Where the assessments identify potential for applying high-efficiency cogeneration whose benefits exceed the costs, Member States would have to take appropriate measures to accommodate the development of high-efficiency cogeneration and the use of heating and cooling from waste heat and renewable energy sources .
Support by Government
- Member States to create incentives for SMEs to undergo energy audits
- Incentives for the implementation of measures recommended by audits (among others tax incentives, financial aid and advisory services)
- Incentives for Incentives for the introduction of Energy Management Systems for large companies
- Through the energy supplier obligations, industrial end-users may benefit from assistance by energy suppliers to identify, finance and implement energy efficiency projects
Full implementation toolbox not yet available.
Dissemination of best practices on benefits of energy management systems for SME businesses.
Complexity of Implementation
Not yet available
Not yet available
Impacts, Costs & Benefits Expand this section to find information on policy effectiveness and efficiency.
|Impact||Quantitative Estimate||Qualitative Estimate|
|Estimated effect on energy consumption or emissions||Estimate at EU-level: 1474 Mtoe of energy savings below baseline in 2020 to meet 20% target (includes Energy Efficiency Directive contributing to 15%, with the Ecodesign and transport measures to make up the remaining 5%)||Not yet available|
|Estimated costs/benefits for industry||Estimates at EU economy-wide level: Increased costs for investment in energy efficiency- €24 billion annually Reduced fuel expenditure - €38 billion annually||Not yet available|
|Estimated cost for government||Estimated avoided costs at the EU level: Reduced costs for investment in energy generation and distribution - €6 billion annually||Not yet available|
|General Benefits||Estimates at EU economy-wide level: Increased EU GDP of € 34 billion in 2020 - Increased net employment of 400 000 in 2020|
References & Footnotes
 European Parliament and of the Council (201). Energy Efficiency Directive 2012/27/EU. Available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:315:0001:0056:EN:PDF
 Eva Hoos, DG Energy, Energy Efficiency Unit (2012). Presentation on the Energy Efficiency Directive. Available at http://www.geode-eu.org/uploads/Presentations%20Stockholm/Energy%20Efficiency%20Directive%20-%20Eva%20Hoos.pdf
 Krzysztof Gierulski, DG Energy, Energy Efficiency Unit (2012). Presentation - European Commission Nordic-Baltic Conference on RES and Energy Efficiency, Tallin, 18-19 October 2012. Available at: http://www.rohevik.ee/2012/wp-content/uploads/2012/08/Krzysztof_Gierulski_191012.pdf
 European Parliament (2012). Energy efficiency: measures required by the proposed directive Energy. Available at: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+IM-PRESS+20120615BKG46961+0+DOC+XML+V0//EN&language=EN#title7
 Press release European Commission, 4 October 2012, ‘Commissioner Oettinger welcomes final adoption of Energy Efficiency Directive’
 European Commission (2013). “Energy Efficiency Reporting Targets” Available at http://ec.europa.eu/energy/efficiency/eed/reporting_en.htm
(*1) Large companies which are already implementing an energy or environmental management system that is certified by an independent body according to the relevant European or international standards would be exempted from this requirement, provided the management system includes an energy audit