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Energy Savings Opportunity Scheme and the EU

27 April 2015

With the UK’s Energy Savings Opportunity Scheme (ESOS), gathering momentum as we progress into 2015, many businesses are taking a closer look at the European picture.

ESOS is the UK transposition of Article 8 of the EU Energy Efficiency Directive (2012/27/EU), which established a common framework of measures designed to help the EU meet its ‘20-20-20’ target of a 20% improvement in energy efficiency by 2020. Each country has leeway to transpose this as fits their agenda, but certain elements are laid out very clearly and the requirement to carry out energy efficiency audits by 5th December 2015 and at least every four years thereafter is set out within EU EED Article 8.

To what extent has this been taken up in the rest of Europe?
The approach to the EED Art. 8 varies country to country:

  • Some countries already have energy efficiency requirements, such as existing legislation around Energy Efficiency Plans (Netherlands) or tax breaks for having ISO50001 in place (Germany). Countries with existing legislation may need to expand this to cover the full scope of the EED Art. 8 requirements.
  • Other countries, such as the UK, have, or are in the process of implementing specific legislation to meet the requirements.
  • Finally, there are a handful of countries that have yet to provide a clear indication of how they are approaching this. In these countries, the government will face both challenges from the European Commission, as well as challenges to bring in legislation with a 5th December 2015 compliance deadline, as laid out in EED Art. 8.

As national legislation applies to the registered entities within that country, this is potentially bad news for international companies with ‘large’ registered entities in several countries. They will have to comply with each country’s individual requirements, navigating the precise mechanisms for compliance which vary from country to country, for example, the French require only 80% coverage of the total energy expenditure in energy efficiency audits (reduced to 65% for the first compliance Phase which ends on 5th December 2015), but the UK’s requirement is 90% coverage throughout all Phases of the scheme.

How can I manage this?
The time pressure to find, familiarise and act on these new national requirements remains tight, with a common compliance deadline of 5th December 2015.

“We have seen several approaches taken by our clients”, said Charles Allison, Partner in ERM’s energy and climate team, “Some (for example those companies with a corporate emissions reduction target in place) are taking a programmatic approach that provides consistency across their European operations and takes them a step towards ISO50001 certification. Others are taking a country by country approach, taking action first in countries where there are clear requirements in place. It is also noted that whilst some companies want to maximise the potential benefit by preparing to implement the findings of the energy efficiency audits, there are others whose main motivation is to comply.” In either case, ERM’s pan-European team is able to support clients who need support in multiple EU Member States.

Want to know more?

For more information, please contact Oliver Parish, Senior Consultant in ERM’s Climate Change Practice.

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