EEO (Energy Efficiency Obligation Scheme)

The key provisions of the Directive are:

• a reduction of 1.5% per year in the energy sales of member states
• Member States to renovate at least 3% of buildings owned and occupied by central governments each year to make them more energy efficient
• prepare and submit every three years to the Commission National Energy Efficiency Action Plans (NEEAPs)
• prepare national long-term renovation strategies for the building stock in each EU country
• requiring mandatory energy performance certificates for the sale and rental of buildings
• minimum energy efficiency standards and labelling for a range of products such as boilers, household appliances, lighting equipment and televisions (energy labels and eco-design)
• the introduction of nearly 200 million smart electricity meters and 45 million smart gas meters by 2020
• obligation schemes for energy companies to achieve annual energy savings equivalent to 1.5% of annual sales to final customers
• energy audits for large companies to be carried out at least every four years
• Member States to ensure that consumers have easy and free access to real-time and historical energy consumption data

In 2018, an amendment to the Energy Efficiency Directive (2018/2002) was adopted as part of the Clean Energy for All package, which served to update the policy framework up to 2030. A further amendment of the Directive is currently underway as part of the Fit for 55 package of proposals.

The key element of the Directive, as amended in 2018, is the energy efficiency target of at least 32.5% by 2030. This is set against the projections for 2030 from the 2007 modelling. The target is that EU energy consumption should not exceed 1273 Mtoe of primary energy and/or 956 Mtoe of final energy consumption by 2030.

The Directive entered into force in December 2018 and Member States had until 25 June 2020 to transpose it into national legislation. An exception is the provisions on metering and billing, for which the deadline was 25 October 2020. Under the Government Regulation 2018/1999 (the Governance Regulation), Member States are required to prepare 10-year integrated national energy and climate change plans outlining how they intend to achieve energy efficiency and other targets by 2030.

Article 7 of the Directive, as amended in 2018, requires Member States to achieve cumulative new final energy savings of 0.8% of annual final energy consumption per year from 2021 to 2030, compared to the average for the period 2016-2018. These final energy savings can be achieved through the introduction of Energy Efficiency Obligation Schemes (EEO), alternative policy measures or a combination of the two.

When introducing an Energy Efficiency Obligation Scheme, obligated parties must contribute to the implementation of measures that help final customers to improve energy efficiency and result in verified energy savings for final customers. This could include, for example, improving the heating system of buildings, replacing windows and doors or insulating roofs to reduce energy consumption.

Annex V of the Directive sets out the methodological rules for calculating energy savings, the principles to be applied for calculating additionality and materiality of the activities of obligated, participating or delegated parties, the rules for introducing quality standards and the methodology for notifying energy efficiency measures to the European Commission.

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There is extensive international experience of energy efficiency obligation schemes. Today there are more than 50 countries with EEO, e.g. the United States, Canada, China, Australia, Brazil. In Europe, 16 countries apply EEO, most of which decided to introduce them after the 2012 Energy Efficiency Directive. In the UK, Denmark and Austria, energy savings have been achieved over a longer period of time through voluntary sectoral agreements between utilities and governments, well before 2012. These countries are now running the most successful schemes in Europe. The Italian and French EEOs, with a decade and a half of experience, have also been successful in stimulating the energy efficiency market by offering the possibility of trading tradable savings on the organised market (white certificates) from the outset.

Abroad, EEOs have typically been introduced in liberalised energy markets, so that the financing of the scheme is also market-based: the costs of energy efficiency measures are borne by consumers. The cost element in consumer tariffs contributes to the incentive for consumers to adopt more energy-efficient behaviour and to invest in more efficient use through higher energy prices. In the liberalised energy markets of Austria, the UK and Ireland, the costs are internalised in the energy prices charged to consumers by the obligated suppliers, who are interested in keeping them down by finding the most efficient solutions and measures. In Denmark, Italy and France, the justified costs of the measures are approved by the regulator and included in network tariffs; the cost of the measures is then also shared among consumers.