Across Europe, energy efficiency improvements are below the socio-economic desirability levels, despite the potential to be economically exploited. The European Union therefore sees energy efficiency as one of the most effective means of simultaneously tackling climate change and achieving energy policy goals. The cornerstone of the relevant EU legislation is the Energy Efficiency Directive 2012/27/EU (EED), which, as amended in 2018, set a target of 32.5% energy efficiency improvement for EU Member States by 2030. According to the amended Article 7 of the EED, Member States must achieve new cumulative end-use 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.
This represents an annual energy saving of around 7PJ for Hungary. The domestic under-achievement of the 2020 savings targets and the targets for the end of the next decade will require the introduction of additional policy measures on top of the existing ones. In 2020, the Government of Hungary adopted the National Energy and Climate Plan, which set out the introduction of an Energy Efficiency Obligation (EEO) scheme from 2021 to achieve energy efficiency targets.
The Energy Efficiency Obligation Scheme is a market-based mechanism that obliges designated actors in the energy market to achieve a certain level of energy savings for end-users in proportion to their energy sales. The obligated parties under Article 7 of the EED can be energy distribution companies, retail energy sales companies, transport fuel distributors and retail fuel sales companies. End-users may include residential, industrial, service and transport users, but exclude energy supplied to the energy transformation sector and the energy industry.
Based on international experience, the EEO could encourage greater and more efficient energy savings in Hungary than before.