ANNEX

1.   INTRODUCTION

This Recommendation states the views of the Commission only; does not alter the legal effects of the Directives and Regulations and is without prejudice to the binding interpretation by the Court of Justice of Articles 7, 7a and 7b and Annex V of the amended Directive 2012/27/EU on energy efficiency (‘EED’). This recommendation builds on feedback the Commission has received from Member States since the transposition of Directive 2012/27/EU on energy efficiency and on what the Commission has learned from Member States' notifications and the assessment of the national energy efficiency action plans and annual reports (1).

Summary: Major amendments to the Directive 2012/27/EU

1.

Structure of energy savings obligation and related provisions — Articles 7 (general rules on savings requirement), 7a (rules for energy efficiency obligation schemes (EEOSs)) and 7b (rules for alternative policy measures); — Annex V (common methods and principles of calculation); and — planning and reporting obligations under the Governance Regulation.

2.

Scope of energy savings obligation (2021-2030) — a new energy savings obligation period 2021-2030 and extension of the obligation beyond 2030 with no end date, but subject to review by 2027 and every 10 years thereafter; — an obligation to achieve cumulative end-use energy savings in 2021-2030 equivalent to new annual savings of at least 0,8 % of final energy consumption (except for Cyprus and Malta, which have to achieve new savings of 0,24 % of final energy consumption), i.e. a higher level than in the current period; — options for Member States to calculate savings differently, as long as they achieve the required cumulative end-use energy savings; and — a requirement of Member States to take account of the need to alleviate energy poverty when designing policy measures, in line with criteria that they are to establish.

3.

Calculating the impact of policy measures — Member States cannot claim energy savings resulting from the implementation of EU law, except where they relate to the renovation of buildings. By way of derogation and subject to certain conditions, they may count savings under national minimum requirements for new buildings towards the savings required for the first obligation period (2014-2020) only.

4.

Clarifications — EEOSs and alternative policy measures are equally valid means of transposing the EED; — energy savings resulting from each kind of policy measure are to be calculated in accordance with common principles and methods in Annex V EED; — clarification of the measurement and verification requirement and the importance of taking a representative sample of energy efficiency improvement measures; — Member States can set up an energy-efficiency national fund (EENF) in accordance with Article 20(6) EED either as an alternative policy measure or as part of an EEOS requiring obligated parties to make all or some of their savings as a contribution to the fund; — clarification of the additionality requirement (energy savings should be additional to those that would have been secured in any event without the activity of the obligated or participating party), including certain factors — free riders, market effects and the impact of existing policies; — the calculation of energy savings must take account of the lifetime of the measures and the rate at which savings decline over time; and — energy savings resulting from small-scale renewable technologies installed on or in buildings may be eligible, subject to compliance with Annex V.

2.   CALCULATION OF ENERGY SAVINGS REQUIRED IN THE 2021-2030 OBLIGATION PERIOD

Point (b) above requires Member States to achieve:

—	cumulative end-use energy savings (i.e. total amount of energy savings) in 2021-2030; and

—	new savings each year in that period (the amount of which is not specified).

While the rate of new annual energy savings in the first obligation period (2014-2020) is the same for all Member States (i.e. 1,5 %), this is not the case in the second period (2021-2030), as Cyprus and Malta have to achieve cumulative end-use savings equivalent to new savings of 0,24 % of final energy consumption (1).

Each Member State has to achieve the calculated amount of cumulative end-use energy savings (i.e. the total energy savings for 2021-2030) by 31 December 2030. Unlike in the first obligation period, that amount cannot be lowered as a result of any flexibility used by the Member State (2).

Member States do not have to achieve new savings equivalent to 0,8 % (0,24 % for Malta and Cyprus) of annual final energy consumption (3) in every year of the second obligation period. The current flexibility whereby they can spread the amount of new savings over the period still applies for the second and subsequent periods (4).

2.1.   Calculation of cumulative end-use energy savings required in second obligation period

To calculate the amount of cumulative end-use energy savings required in the second obligation period, each Member State must first calculate average final energy consumption in the three years before 2019 (i.e. 2016-2018) (5).

The next step is to multiply that average by 0,8 % (0,24 % in the case of Cyprus and Malta) to establish the equivalent amount of ‘new’ annual savings.

Example

A Member State has an energy consumption of 102 million tonnes of oil equivalent (Mtoe) in 2016, 98 Mtoe in 2017 and 100 Mtoe in 2018 — giving a three-year average of 100 Mtoe.

For the calculation of the cumulative amount of end-use energy savings (2021-2030), the minimum amount of new savings each year is therefore 0,8 Mtoe (100 Mtoe × 0,8 %).

Member States can then calculate the cumulative amount of end-use savings required for the whole obligation period.

Example

A Member State calculates its 2016-2018 average final energy consumption as 100 Mtoe. The total end-use savings in relation to 2021 would therefore be (100 × 0,8 % × 1) = 0,8 Mtoe.

Since it is required to achieve cumulative end-use energy savings at least equivalent to new savings each year from 2021 to 2030, the Member State has to calculate new savings for each subsequent year up to 2030.

The total amount calculated for 2022 would be (100 × 0,8 % × 2) = cumulative end-use energy savings of 1,6 Mtoe (including 0,8 Mtoe new savings in 2022 (marked in grey below)).

Amounts for each subsequent year up to 2030 can be calculated in the same way. The total amount of cumulative end-use energy savings required over the 10-year period is 44,0 Mtoe (100 × 0,8 % × 55).

Year	2021	2022	2023	2024	2025	2026	2027	2028	2029	2030
End-use energy savings (Mtoe)										0,8	Total cumulative end-use energy savings (by 2030)
									0,8	0,8
								0,8	0,8	0,8
							0,8	0,8	0,8	0,8
						0,8	0,8	0,8	0,8	0,8
					0,8	0,8	0,8	0,8	0,8	0,8
				0,8	0,8	0,8	0,8	0,8	0,8	0,8
			0,8	0,8	0,8	0,8	0,8	0,8	0,8	0,8
		0,8	0,8	0,8	0,8	0,8	0,8	0,8	0,8	0,8
	0,8	0,8	0,8	0,8	0,8	0,8	0,8	0,8	0,8	0,8
Total (Mtoe)	0,8	1,6	2,4	3,2	4,0	4,8	5,6	6,4	7,2	8,0	44,0  (6)

2.2.   Statistical dataset

2.2.1.   Use of Eurostat dataset

To establish the statistical datasets to be used for the 2021-2030 obligation period, Member States should use the Eurostat dataset, which is considered the default source for the calculation of required savings amounts (see Annex III(1)(c) to the Governance Regulation).

In 2019, Eurostat revised the energy balance on the basis of international recommendations for energy statistics published by the United Nations Statistical Commission (7). For Member States' energy efficiency contributions and energy savings obligations, it established a specific category ‘final energy consumption (Europe 2020-2030)’  (8) (code FEC2020-2030). This contains elements required under point (b) in the first subparagraph of Article 7(1) EED and Member States should use it for the purposes of the energy savings obligation (9).

The new category includes the following arithmetical definitions, based on the latest amendments to Regulation (EC) No 1099/2008 of the European Parliament and of the Council (10):

Final energy consumption (Europe 2020-2030) [All products total] =

Final energy consumption [All products total]

– Final energy consumption [Ambient heat (heat pumps)]

+ International aviation [All products total]

+ Transformation input Blast furnaces [All products total]

– Transformation output Blast furnaces [All products total]

+ Energy sector Blast furnaces [Solid fossil fuels]

+ Energy sector Blast furnaces [Manufactured gases]

+ Energy sector Blast furnaces [Peat and peat products]

+ Energy sector Blast furnaces [Oil shale and oil sands]

+ Energy sector Blast furnaces [Oil and petroleum products]

+ Energy sector Blast furnaces [Natural gas]

2.2.2.   Use of alternative statistical sources and expert estimates

Member States may use alternative statistical sources, but must explain and justify their use and any difference in the resulting quantities in their notification to the Commission (see Annex III(1)(c) to the Governance Regulation).

If the data for certain years are not available at the time Member States have to report, they may use expert estimates (again justifying these in the notification). If, when the official data become available, there are significant discrepancies between the estimated and the real figures, the amount of savings required must be adjusted to the latter.

It is recommended that Member States adjust the estimates to the official data as soon as possible under the governance mechanism, through the next submission or obligatory reporting under the Governance Regulation (e.g. in the update of the national energy and climate plan (NECP) by 30 June 2023, pursuant to Article 14(1) of the Regulation).

2.2.3.   Energy used in transport

Without prejudice to Article 7(2)(b) EED (11), Member States can no longer exclude final energy consumption in transport from their baseline calculation for the second and subsequent obligation periods.

2.2.4.   Energy generated for own end-use

While the cumulative end-use energy savings in the first obligation period are based on ‘energy sales to final customers’, the EED deliberately changes the basis for the second and subsequent periods to ‘final energy consumption’.

As a result, Member States must include energy generated for own end-use (e.g. electricity generated by photovoltaic systems, heat generated by solar thermal collectors or the co-firing of waste in industry) in the baseline calculation for those periods.

The Eurostat category of ‘final energy consumption’ (code B 101700 (12)), as applicable when the EED was negotiated and adopted, included certain renewables relevant for small-scale use on or in buildings (solar energy, including solar photovoltaic and solar thermal, wind energy, solid biomass, biogas and liquid biofuels (13)). Ambient heat, e.g. as used in heat pumps, was not included in the category of ‘final energy consumption’. To ensure that the energy savings obligation under Article 7(1) EED as agreed by the co-legislators is not altered by the revision of energy balances, for the purposes of energy efficiency Eurostat established and publishes the specific category ‘final energy consumption (Europe 2020-2030)’ (code FEC2020-2030) which continues excluding ambient heat from this category until 2030 (14).

However, while Annex III(1)(c) to the Governance Regulation requires that the Eurostat dataset be used as a default source, Member States must take account of all available data at national level. Where these differ from Eurostat data, Member States must quote their national sources, if these are more accurate. They must include these in their calculation baseline and notify and explain in their NECP what data sources have been used, including any additional official or estimable volumes of final energy consumption that are not covered by the Eurostat dataset.

2.3.   Spreading energy savings over the 2021-2030 period

The last subparagraph of Article 7(1) EED requires Member States to ‘decide how to phase the calculated quantity of new savings over [each obligation period], provided that the required total cumulative end-use energy savings have been achieved by the end of each obligation period’.

Examples

One Member State might choose a linear increase of savings over time; another might decide to start later, but to require higher savings towards the middle/end of the second obligation period.

Another Member State may decide to spread the required amount of cumulative end-use energy savings (e.g. 44,0 Mtoe) as shown below, as long as the cumulative amount of required savings is achieved between 2021 and 2030 (assuming that all measures have lasting effects that provide savings every year at least until 2030):

Year	2021	2022	2023	2024	2025	2026	2027	2028	2029	2030
End-use energy savings (Mtoe)										0,8	Total cumulative end-use energy savings (by 2030)
									1,1	1,1
								0,5	0,6	0,6
							0,7	0,7	0,7	0,7
						0,6	0,6	0,6	0,6	0,6
					0,8	0,8	0,8	0,8	0,8	0,8
				1,0	1,0	1,0	1,0	1,0	1,0	1,0
			1,2	1,2	1,2	1,2	1,2	1,2	1,2	1,2
		0,9	0,9	0,9	0,9	0,9	0,9	0,9	0,9	0,9
	0,4	0,4	0,4	0,4	0,4	0,4	0,4	0,4	0,4	0,4
Total (Mtoe)	0,4	1,3	2,5	3,5	4,3	4,9	5,6	6,1	7,3	8,1	44

If a Member State establishes or maintains an energy efficiency obligation scheme (EEOS), it is not required to report how it will spread the effort over the obligation period. However, it is recommended that Member States do establish and report how they will do so. Under part 3.1(b) of Annex III to the Governance Regulation, Member States must notify the expected cumulative and annual amount of savings and the duration of their schemes.

Member States that establish or maintain alternative policy measures under Article 7b EED and/or an energy-efficiency national fund (EENF) under Article 20(6) EED have full discretion to spread the required cumulative end-use energy savings over the second obligation period. They may, but are not obliged to, introduce intermediate periods, which do not have to be of the same length. However, part 3.2(c) of Annex III to the Governance Regulation requires them to notify the ‘expected total cumulative and annual amount of savings for each measure and/or amount of energy savings in relation to any intermediate periods’.

3.   OTHER WAYS OF CALCULATING THE SAVINGS REQUIREMENTS

3.1.   Ratio and scope

The options in Article 7(2) EED do not affect the energy savings obligation under point (b) in the first subparagraph of Article 7(1) EED. Article 7(2) and (4) EED allow Member States to use different calculation methods (e.g. to address certain national circumstances), but this must not lead to a reduction in the amount of energy savings required, i.e. Member States must ensure that the calculation by one or more of the methods in Article 7(2) EED results in the same cumulative minimum energy savings as required under point (b) in the first subparagraph of Article 7(1) EED.

Thus, regarding the obligation period 2021 to 2030, whether or not Member States use the options under Article 7(2) and (4) EED, they must ensure that the required amount of cumulative end-use energy savings equivalent to new annual savings of at least 0,8 % (15) is achieved by 31 December 2030. To ensure that the flexibilities applied in accordance with Article 7(2) and (4) EED do not reduce the calculated minimum net amount of new energy savings to be achieved in final energy consumption during the obligation period, Member States' own annual savings rates must therefore be higher than that required to achieve the cumulative energy savings provided in point (b) in the first subparagraph of Article 7(1) EED (16). Member States are not obliged to make use of the options in Article 7(2) EED.

3.2.   Options under Article 7(2) EED

Article 7(2) EED allows Member States to calculate the required amount of energy savings by:

—	applying an annual savings rate on energy sales to final customers or on final energy consumption, averaged over 2016-2018; and/or

—	excluding from the calculation baseline, in whole or in part, energy used in transport; and/or

—	making use of any of the options in Article 7(4) EED.

3.3.   Own annual savings rate and calculation baseline

Where Member States make use of one or more of the options, Article 7(3) EED requires them to establish:

—	their own annual savings rate — this is applied in the calculation of their cumulative end-use energy savings to ensure that the required savings are no less than those required under point (b) in the first subparagraph of Article 7(1) EED; and

—	their own calculation baseline, which may exclude, in whole or in part, energy used in transport (17).

These are in addition (18) to the calculations of the annual new savings rate and the cumulative end-use savings pursuant to point (b) in the first subparagraph of Article 7(1) EED.

The second subparagraph in Article 7(5) EED provides that, whether or not Member States exclude, in whole or in part, energy used in transport from their calculation baseline or make use of any of the options in Article 7(4) EED, they must ensure that the calculated net amount of new savings to be achieved in final energy consumption over the 2021-2030 obligation period is not less than the amount resulting from applying the annual savings rate referred to in point (b) in the first subparagraph of Article 7(1), i.e. 0,8 % (0,24 % for Cyprus and Malta).

3.4.   Options under Article 7(4) EED

For the 2021-2030 obligation period, Member States may make use of one or more of the following options (Article 7(4) EED):

(b)	full or partial EU Emissions Trading Scheme (ETS) industry exclusion;

(c)	counting certain energy savings from energy transformation and transmission sectors;

(d)	early actions after the end of 2008 that still deliver savings beyond 2020;

(e)	individual actions carried out from the beginning of 2018 to the end of 2020 that still deliver savings beyond 2020;

(f)	exclusion of 30 % of energy generated on or in buildings for own use as a result of policy measures promoting new installation of renewable energy technologies; and

(g)	counting certain energy savings that exceed those required for the 2014-2020 obligation period.

Under point (b) in Article 7(5) EED, these options can be used only towards the ‘amount of energy savings calculated in accordance with Article 7(2) and (3)’ and taken together ‘shall not lead to a reduction of more than 35 %’ of that amount.

Crucially, the options cannot be used to reduce the total amount of cumulative end-use energy savings required under point (b) in the first subparagraph of Article 7(1) EED. In other words, whether or not Member States exclude, in whole or in part, energy used in transport from their calculation baseline or make use of any of the options, they must ensure that the calculated net amount of new savings to be achieved in final energy consumption in the 2021-2030 obligation period is not less than the amount resulting from applying the annual savings rate referred to in point (b) in the first subparagraph of Article 7(1) EED (19). To ensure this, Article 7(5) EED requires them to calculate the effect in the obligation period of the decision to make use of one or more of the options (20).

The options in points (b) and (f) in Article 7(4) EED may be used only for the calculation of the own baseline pursuant to Article 7(2) and (3) EED. The amounts can be deducted from that calculation (subject to the restrictions provided for).

The options provided in points (c), (d), (e) and (g) relate to energy savings and can be counted only towards the calculated amount of savings required under Article 7(2) and (3) EED. Thus, they cannot be used to lower the level of the energy savings obligation under point (b) in the first subparagraph of Article 7(1) EED, but they can be used to help fulfil it.

3.4.1.   Options in detail

3.4.1.1.   Full or partial ETS industry exclusion (Article 7(4)(b))

If a Member State uses only the option of fully or partially excluding sales of energy used in ETS industry (Article 7(4)(b) EED), it must establish what volumes of delivered or retailed energy are used for those industrial activities. The calculation is based on the energy used for the activities listed under Annex I to the ETS Directive (21).

The energy used for the ‘energy activities’ listed in that Annex (combustion installations with a rated thermal input exceeding 20 MW (except hazardous or municipal waste installations), mineral oil refineries and coke ovens) and the energy used in aviation are then deducted from that amount (22).

3.4.1.2.   Energy savings from energy transformation and transmission sectors (Article 7(4)(c))

Article 7(4)(c) EED allows Member States to count energy savings achieved in the energy transformation, distribution and transmission sectors, including efficient district heating and cooling infrastructure, as a result of implementing the requirements in Articles 14(4) and (5)(b) and 15(1)-(6) and (9) EED, towards the amount of energy savings calculated in accordance with Article 7(2) and (3) EED (23).

3.4.1.3.   Energy savings from individual actions newly implemented since 31 December 2008 (Article 7(4)(d))

If a Member State counts energy savings resulting from individual actions newly implemented since 31 December 2008 towards the amount of required energy savings calculated in accordance with Article 7(2) and (3) EED, those actions must continue to have an impact beyond 2020 with respect to the 2021-2030 obligation period, i.e. result in new energy savings after 31 December 2020. Article 2(19) EED defines ‘ individual action ’ as an action that leads to verifiable, and measurable or estimable, energy efficiency improvements and is undertaken as a result of a policy measure. Furthermore, energy savings must be measured and verified.

3.4.1.4.   Individual actions carried out between the beginning of 2018 and the end of 2020 (Article 7(4)(e))

Under Article 7(4)(e) EED, a Member State may count energy savings that stem from policy measures towards the amount of savings calculated in accordance with Article 7(2) and (3) EED, provided that it demonstrates that those measures result in individual actions that are carried out between 1 January 2018 and 31 December 2020 and still deliver energy savings thereafter.

Whereas Article 7(4)(d) EED refers to the implementation of the individual actions between 31 December 2008 and 31 December 2013, Article 7(4)(e) EED is only applicable for individual actions implemented between 1 January 2018 and 31 December 2020. This difference is relevant where Member States consider a lifetime of an action of up to 21 years implemented in 2008, respectively a lifetime of an action of up to 12 years implemented in 2018. In practice this means that the first case is relevant, e.g. for actions with a long lifetime such as insulation of a building envelope.

3.4.1.5.   Energy generated on or in buildings for own use from new installation of renewable energy technologies (Article 7(4)(f))

This option allows Member States to exclude a verifiable amount of energy generated for own use by new renewable energy installations on or in buildings from the calculation of energy savings required under Article 7(2) and (3) EED.

Its use is restricted in three respects:

—	no more than 30 % of energy generated for own use by new renewable energy installations on or in buildings can be excluded from the baseline calculation;

—	this must not lead to a reduction of more than 35 % of the amount calculated pursuant to Article 7(2) and (3) EED; and

—	the amount of such energy must not be excluded from the calculation of the savings obligation under point (b) in the first subparagraph of Article 7(1) EED.

Annex V(2)(e) EED sets out how energy savings resulting from measures promoting the installation of small-scale renewable energy technologies on or in buildings can be counted towards the savings required under Article 7(1) EED (24). This is not subject to volume restrictions.

Since Article 7(4)(f) EED refers to the ‘verifiable amount of energy generated on or in buildings for own use’  (25) (not the amount actually used), Member States have to determine and verify the volumes of renewable energy (in ktoe, MW or equivalent) that will be generated on buildings for own use as a result of policies that promote new installations in the 2021-2030 obligation period. Since the provision refers to a ‘verifiable amount’, this calculation can take into account the estimated average renewable energy volume to be produced for own use in 2021-2030 only from units installed on or in buildings after 31 December 2020.

Article 21(b)(3) of the Governance Regulation requires Member States to include information on the implementation of national EEOSs and alternative policy measures in their integrated national energy and climate progress reports. Therefore, as of 15 March 2021 (and every two years thereafter), they should provide information on the actual amount of energy generated on or in buildings for own use from newly installed renewable energy technologies.

Indicative and non-exhaustive example

The table below shows, for a non-exhaustive list of technologies, how much energy can be excluded from the calculation of the energy savings requirement. For example, the installation of a solar-thermal/gas boiler package could lead to the generation of 1 000 kWh of renewable energy, of which 30 % (300 kWh) could be excluded from the calculation (provided this does not exceed 35 % of the required savings):

Technology type		Final energy demand (kWh)	Share of renewables generated on buildings (%)	Generation accountable for savings target reduction (kWh)	30 % that can be excluded from savings requirement (kWh)
(1)	Gas-fired condensing boiler	10 526	0	0
(2)	Wood-fired condensing boiler	10 870	100	10 870	3 261
(3)	Heat pump (with grid electricity)	2 857	0	0
(4)	Solar-thermal with gas boiler package	10 474	~ 10	1 000	300
	solar-thermal installation	1 000	100	1 000	300
	gas-fired condensing boiler	9 474	0	0
(5)	PV installation	3 500	100	3 500	1 050

3.4.1.6.   Energy savings exceeding those required for the first obligation period (Article 7(4)(g))

Member States may count energy savings that exceed those required for the first obligation period (2014-2020) towards the calculation under Article 7(2) and (3) EED, provided that:

—	they resulted from individual actions under an EEOS or alternative policy measures; and

—	the Member State notified the relevant policy measures in its NEEAP and reported them in its progress report under Article 24(2) (26).

4.   CHOICE OF POLICY MEASURES TO ACHIEVE THE REQUIRED AMOUNT OF CUMULATIVE END-USE ENERGY SAVINGS

Under Article 7(10) EED, Member States must achieve the required cumulative end-use energy savings by:

—	establishing an EEOS;

—	adopting alternative policy measures; or

—	a combination of the above.

Article 7 EED clarifies that EEOSs and alternative policy measures are an equally valid in this respect. Member States have significant flexibility and broad discretion to choose, from various types of scheme, the system best suited to their particular situation and circumstances (27).

Articles 7a(1) and 7b(1) EED require that all policy measures be designed for the purpose of fulfilling the energy savings obligation under Article 7(1) EED and be eligible to contribute to ‘end-use energy savings’ that are ‘among final customers’. However, it does no harm if a policy measure also addresses other objectives and targets (e.g. under policies on energy, to address the need to preserve, protect and improve the quality of the environment or to promote the prudent and rational utilisation of natural resources).

Article 2(18) EED defines a ‘policy measure’ as a regulatory, financial, fiscal, voluntary or information provision instrument formally established and implemented in a Member State to create a supportive framework, requirement or incentive for market actors to provide and purchase energy services and to undertake other energy efficiency improvement measures. Policy measures that are intended to support only policy objectives other than energy efficiency, that are designed to provide or purchase energy services only or that trigger end-use savings that are not achieved among final consumers, might not be considered eligible under Article 7 EED. In any case, Member States will need to assess measures carefully and demonstrate that energy savings can be directly attributed to them.

Whether a Member State decides to use an EEOS or adopt alternative policy measures, it must ensure that the policy measures are eligible to achieve the required cumulative end-use energy savings by 31 December 2030 (or in a subsequent saving period, depending on when the measures are formulated).

The following non-exhaustive list of definitions is relevant when setting up policy measures (they are unchanged in the amended EED).

Article 2 EED

‘(4)	“energy efficiency” means the ratio of output of performance, service, goods or energy to input of energy;

(5)	“energy savings” means an amount of saved energy determined by measuring and/or estimating consumption before and after implementation of an energy efficiency improvement measure, whilst ensuring normalisation for external conditions that affect energy consumption;

(6)	“energy efficiency improvement” means an increase in energy efficiency as a result of technological, behavioural and/or economic changes;’

‘(14)

“obligated party” means an energy distributor or retail energy sales company that is bound by the national energy efficiency obligation schemes referred to in Article 7.

(15)	“entrusted party” means a legal entity with delegated power from a government or other public body to develop, manage or operate a financing scheme on behalf of the government or other public body;

(16)	“participating party” means an enterprise or public body that has committed itself to reaching certain objectives under a voluntary agreement, or is covered by a national regulatory policy instrument;

(17)	“implementing public authority” means a body governed by public law which is responsible for the carrying out or monitoring of energy or carbon taxation, financial schemes and instruments, fiscal incentives, standards and norms, energy labelling schemes, training or education;

(18)

“policy measure” means a regulatory, financial, fiscal, voluntary or information provision instrument formally established and implemented in a Member State to create a supportive framework, requirement or incentive for market actors to provide and purchase energy services and to undertake other energy efficiency improvement measures;

(19)	“individual action” means an action that leads to verifiable, and measurable or estimable, energy efficiency improvements and is undertaken as a result of a policy measure;

(20)	“energy distributor” means a natural or legal person, including a distribution system operator, responsible for transporting energy with a view to its delivery to final customers or to distribution stations that sell energy to final customers;

(21)	“distribution system operator” means “distribution system operator” as defined in Directive 2009/72/EC and Directive 2009/73/EC respectively;

(22)	“retail energy sales company” means a natural or legal person who sells energy to final customers;

(23)	“final customer” means a natural or legal person who purchases energy for own end use;

(24)	“energy service provider” means a natural or legal person who delivers energy services or other energy efficiency improvement measures in a final customer's facility or premises;’

For the purpose of Article 7(10) EED, Member States can count energy savings from policy measures newly adopted in the 2021-2030 obligation period. They can also count energy savings from policy measures adopted in the 2014-2020 obligation period (or before), provided that these comply with the requirements in Articles 7, 7a or 7b EED.

Member States may count savings from measures adopted by 31 December 2020 or later only if those measures result in new individual actions that are carried out after 31 December 2020 and before 31 December 2030.

Examples of measures, actions and savings

A financial support programme for the energy renovation of buildings was put in place in 2010. As long as it remains in place and delivers new renovations in the relevant period, the energy savings resulting from those new renovations can be counted towards the savings required in the second obligation period.

A fuel tax was established prior to 2021 to trigger behavioural savings and improve transport efficiency. As long as it remains in place and effects on behaviour are measurable and verifiable considering latest price elasticities, energy savings resulting from the measure may be counted towards the savings required in the second obligation period.

4.1.   Energy efficiency obligation schemes

The key rationale of choosing to implement an EEOS to achieve the cumulative end-use energy savings required under point (b) in the first subparagraph of Article 7(1) EED might be that energy suppliers, retailers and distributors are best placed to identify energy savings with their customers and will be able to achieve energy savings in business models for energy services. In this case, Member States must designate one or more obligated parties at national level (28) that are required to achieve energy savings among final customers (29). The designation of an obligated party must be based on objective and non-discriminatory criteria as provided in Article 7a(2) EED.

When designating obligated parties under an EEOS, Member States should consider the judgment of the European Court of Justice in Case C-561/16. The Court ruled that Member States can ‘impose energy efficiency obligations on only certain specific undertakings in the energy sector, provided that the designation of those companies as obligated parties is based on explicitly stated, objective and non-discriminatory criteria, which it is for the referring court to ascertain’  (30).

In addition, Member States must establish the amount of energy savings to be achieved by each (sub-category of) obligated party. Those amounts must then be assigned to each obligated party, to check that it has fulfilled its obligations.

Article 7a(4) allows Member States to express the amount of energy savings required of each obligated party in terms of either final or primary energy consumption (31), using the conversion factors set out in Annex IV.

Member States can also decide to permit or require obligated parties to fulfil all or part of their obligation under national law as a contribution to the EENF (32). They may allow obligated parties to count savings achieved by energy service providers (33) or other third parties towards their obligation. Article 7a(6)(a) EED requires them to ensure that the certification of energy savings follows an approval process that is clear, transparent and open to all market participants, and that aims to minimise the costs of certification (34).

Article 7a(3) EED clarifies that Member States are to ensure that energy sales companies do not create any barriers that discourage consumers from switching from one supplier to another.

Article 7a(5) EED requires Member States to put in place measurement, control and verification systems under which documented verification is carried out on at least a statistically significant proportion and representative sample of the energy efficiency improvement measures put in place by the obligated parties (35).

Under Article 7a(6)(b) EED, Member States may provide for the possibility of ‘banking and borrowing’, i.e. allowing obligated parties to count savings obtained in a given year as if they had been obtained in any of the 4 previous or 3 following years. It should be noted that this flexibility:

—	applies only for energy savings stemming from EEOSs implemented since 1 January 2014 and not for alternative policy measures; and

—	is restricted in time — Member States may allow obligated parties to ‘bank or borrow’ only within an obligation period.

In other words, savings obtained between 2014 and 2020 must not be ‘banked or borrowed’ after 31 December 2020. Those obtained between 2021 and 2030 must not be ‘banked or borrowed’ before 31 December 2020 or after 31 December 2030. Savings obtained after 2010 and before 1 January 2014 cannot be ‘banked or borrowed’ for the purposes of point (b) in the first subparagraph of Article 7(1) EED.

Since Article 7(8) EED provides explicitly a derogation, its application is restrictive and limited to the purposes of point (a) in the first subparagraph of Article 7(1) EED.

Examples

Energy savings obtained in 2014 (as a result of an EEOS) can be counted as if they had been obtained in 2017.

Energy savings obtained in 2014 (as a result of an EEOS) cannot be counted for 2021.

Energy savings obtained in 2018 (as a result of an EEOS) can be counted for 2014.

The second subparagraph in Article 7a(6) EED provides that Member States ‘shall assess and, if appropriate, take measures to minimise the impact of the direct and indirect costs of energy efficiency obligation schemes on the competitiveness of energy-intensive industries exposed to international competition’.

In general, there are two types of cost involved:

—	investment costs; and

—	administrative costs (including monitoring and reporting).

In its impact assessment (36), the Commission showed, on the basis of the available evidence, that EEOSs are highly cost-effective. When implementing such schemes, obligated parties are obliged to ensure that they realise end-use savings at lowest (investment and administrative) cost, in particular if the costs are passed on to the end-users. This requirement also holds if obligated parties choose to count certified energy savings achieved by energy providers and other third parties.

Article 7a(7) EED requires Member States to ‘publish the energy savings achieved by each obligated party, or each sub-category of obligated party, and in total under the scheme on an annual basis’. They may publish this information in combination with other data they have to make publicly available. The publication of such data by other parties, e.g. the Commission, does not relieve them of this obligation.

4.2.   Alternative policy measures

The EED clarifies that Member States should have a high degree of flexibility in the design and implementation of alternative policy measures. While the EED no longer lists types of measure, Article 2(18) EED provides in its definition of ‘policy measure’ a non-exhaustive list of possible types, i.e. ‘regulatory, financial, fiscal, voluntary or information provision instruments which have to be formally established and implemented in a Member State to create a supportive framework, requirement or incentive for market actors to provide and purchase energy services and to undertake other energy efficiency improvement measures’.

Member States may consider promoting the role of local renewable energy communities in contributing to the implementation of alternative policy measures (37).

Annex V(3) EED lays down requirements for the design and administration of alternative policy measures:

‘(a)	policy measures and individual actions produce verifiable end-use energy savings;

(b)	the responsibility of each participating party, entrusted party or implementing public authority, as relevant, is clearly defined;

(c)	the energy savings that are achieved or are to be achieved are determined in a transparent manner;

(d)	the amount of energy savings required or to be achieved by the policy measure is expressed in either final or primary energy consumption, using the conversion factors set out in Annex IV;

(e)	an annual report on the energy savings achieved by entrusted parties, participating parties and implementing public authorities be provided and made publicly available as well as data on the annual trend of energy savings;

(f)	monitoring of the results and taking appropriate measures if progress is not satisfactory;

(g)	the energy savings from an individual action are not claimed by more than one party;

(h)	the activities of the participating party, entrusted party or implementing public authority are shown to be material to the achievement of the energy savings claimed.’

Article 7b(2) EED requires Member States to put in place measurement, control and verification systems under which documented verification is carried out on at least a statistically significant proportion and representative sample of the alternative energy efficiency improvement measures (except taxation) put in place by the participating or entrusted parties.

It should be noted that:

—	the measurement, control and verification is to be carried out independently of those parties (38); and

—	a ‘statistically significant proportion and representative sample’ should be understood as a subset that accurately reflects the statistical population of the energy-saving measures and thus allows for reasonably reliable conclusions as regards confidence in the totality of the measures.

4.2.1.   Financing schemes and instruments, and fiscal incentives

These are policy measures established by a Member State under which a monetary and fiscal incentive leads to the application of energy-efficient technology or techniques and which have the effect of reducing end-use energy consumption (39).

It should be noted that:

—	the effects are to be measured, controlled and verified independently of the participating or entrusted parties (40); and

—

in the case of financing schemes or instruments, the funding should come from: — public (European or national) sources; or — a combination of public (European or national) sources and private sources (e.g. banks, investment funds, pension funds) explicitly targeting the realisation of individual actions that lead to end-use energy savings.

4.2.2.   Energy efficiency national fund

Member States can set up an EENF in accordance with Article 20(6) EED either as an alternative policy measure or as part an EEOS, so that obligated parties can fulfil all or part of their savings as a contribution to the fund.

If a Member State establishes a mechanism of annual contributions to an EENF as the principal method of fulfilling energy efficiency obligations, its national legislation must ensure that:

—	the energy savings achieved are equivalent to those under EEOSs; and

—	the measures funded satisfy the requirements of Articles 7b and 20(6) and Annex V(3) EED (41).

The EENF can be any fund established by a Member State with the purpose of supporting national energy efficiency initiatives. It can be created to finance economic and financial support schemes, technical assistance, training and information, or other measures to increase energy efficiency, so as to contribute to the achievement of the objectives of EU law (42). In general, a combination of public funds (e.g. for addressing market failures — cost categories or measures not usually addressed under market-based mechanisms) and private capital could also be established to provide more effective solutions.

To count for the purposes of Article 7 EED, the funding must come from:

—	public (European or national) sources; or

—	a combination of public (European or national) sources and private sources (e.g. banks, investment funds, pension funds, obligated parties) explicitly targeting the achievement of individual actions that lead to end-use energy savings.

4.2.3.   Regulations and voluntary agreements

These are policy measures established by a Member State that lead to the application of energy-efficient technologies or techniques and have the effect of reducing end-use energy consumption. They can be:

—	legally binding measures that impose specific technologies or techniques; or

—	voluntary agreements under which firms or local authorities commit themselves to certain action (43).

The ‘participating parties’ include ‘enterprises or public bodies that have committed themselves to reaching certain objectives under a voluntary agreement, or are covered by a national regulatory policy instrument’.

4.2.4.   Standards and norms

These are policy measures established by a Member State that are aimed at improving the energy efficiency of (for example) products, services, buildings and vehicles (44). The parties under these schemes are ‘implementing public authorities’.

4.2.5.   Energy labelling schemes

These are labelling schemes established by a Member State, with the exception of those that are mandatory under EU law (e.g. savings from the application of energy labelling regulations or the Energy Labelling Regulation (45) cannot be counted) (46).

Other policy measures being implemented at the same time may also have an impact on energy savings, so not all changes observed since the introduction of the measure being evaluated can be attributed to that measure alone. Careful consideration of the impact of a labelling scheme is required to establish a link with individual action leading to savings that can be attributed to it.

4.2.6.   Training and education, including energy advisory programmes

These are policy measures established by a Member State that lead to the application of energy-efficient technology or techniques and have the effect of reducing end-use energy consumption through (for example) training programmes for energy auditors, education programmes for energy managers or energy advisory programmes for households.

It should be noted that:

—	such measures must be monitored by an ‘implementing public authority’; and

—	careful consideration of their impact is required to establish: — a link between the training or education activity and the individual action attributable to it; and — the period for which programmes may continue to have an effect (47).

4.2.7.   Other alternative measures

The list of alternative policy measures is not exhaustive and other policy measures may be applied. However, Member States must explain in their notification to the Commission how an equivalent level of savings, monitoring and verification is achieved (48).

The reduction of energy consumption and the use of energy from renewable sources in buildings are important measures of reduced energy dependence and greenhouse gas emissions, especially in view of the EU's ambitious climate and energy objectives for 2030 and its global commitment in the context of the Paris Agreement. Hence, policy measures promoting the installation of small-scale renewable technologies on or in buildings can be also be considered to fulfil the energy savings obligation (49).

Measures must be designed to generate end-use energy savings relative to the technology they replace. For example, such savings can be claimed from switching to more efficient heating or cooling systems or hot-water technologies in buildings, whether or not this involves renewable energy. Those savings are eligible even if the alternative policy measure is not primarily designed to improve energy efficiency, provided that the Member State can show that they are additional, measurable and verifiable according to the methods and principles in Annex V EED.

4.2.8.   Energy or CO2 taxes

Member States' tax measures to reduce end-use energy consumption may be eligible. Member States may also combine tax measures with other measures such as subsidies (50).

Taxation for the purpose of energy efficiency mainly aims to address market failures caused by energy consumption by charging a tax or levy on certain types of energy source or energy usage. CO2 or carbon taxes can also be a driver for individual actions designed to switch to energy sources with lower CO2 emissions. However, it should be noted that such a source control does not necessarily lead to energy efficiency improvements.

The objective of tax measures is to make consumers and producers pay the social cost of the good (including in the form of carbon emissions and greenhouse effects).

In practice, measures (51) typically consist of:

—	direct measures — these include charges related directly to the ‘externality’, i.e. the activity that imposes an effect on an unrelated third party. This type of measure implicitly assumes that the market failure is observable and quantifiable. An example is taxes on carbon emissions; and

—	indirect measures — these are taxes related to the consumable generating the externality (e.g. the fuels generating carbon emissions) or consumables related to it (e.g. the cars that use such fuels).

Member States may establish new tax measures for the purpose of the energy savings obligation for the new period (2021-2030) and/or continue to apply existing measures from the first period (2014-2020).

In determining the energy savings that can be claimed as additional (52), Annex V(2)(a) provides that ‘Member States shall have regard to how energy use and demand would evolve in the absence of the policy measure in question by taking into account at least the following factors: energy consumption trends, changes in consumer behaviour, technological progress and changes caused by other measures implemented at Union and national level’.

In addition, Member States should take into account the requirements of Annex V(4) when calculating the effect of tax measures:

‘(a)	credit shall be given only for energy savings from taxation measures exceeding the minimum levels of taxation applicable to fuels as required in Council Directive 2003/96/EC or 2006/112/EC;

(b)	price elasticities for the calculation of the impact of the (energy) taxation measures shall represent the responsiveness of energy demand to price changes, and shall be estimated on the basis of recent and representative official data sources;

(c)	the energy savings from accompanying taxation policy instruments, including fiscal incentives or payment to a fund, shall be accounted separately.’

Member States should implement measures that aim to exceed minimum levels under EU law, including:

—	minimum levels for the taxation of energy products and electricity (53); and

—	provisions on the common system of VAT (54) in relation to energy-consuming products and goods.

When calculating the impact of their (energy) taxation measures, Member States should take account of price elasticities (which represent the responsiveness of energy demand to price changes), estimating these on the basis of recent and representative official data sources (55). Under part 3.3(f) of Annex III to the Governance Regulation, Member States must provide information on their calculation methodology, including the price elasticities they have used and how they have been established, in accordance with Annex V(4) EED.

For the purposes of Annex V(4)(c) EED, it is important to assess how tax measures interact with other policy measures. When calculating the impacts of tax measures used in combination with other measures, Member States are recommended to use:

—	short-term elasticities only; or

—	short- and long-term elasticities, but not claim energy savings for the other measures (i.e. treat the tax measure as the main policy measure in a package).

For tax measures implemented prior to the 2021-2030 obligation period, Member States should pay particular attention to the second subparagraph of Article 7(1) EED: ‘Member States may count energy savings that stem from policy measures, whether introduced by 31 December 2020 or after that date, provided that those measures result in new individual actions that are carried out after 31 December 2020 ’.

If a Member State establishes a combination of tax and subsidy measures, it must keep separate accounts of energy savings from tax measures and from accompanying policy measures (including fiscal incentives).

Using short-term elasticity estimates throughout the target period will make it less likely that savings are double-counted.

4.3.   Policy measures to alleviate energy poverty

Under Article 7(11) EED, when designing policy measures to meet their energy savings obligations, Member States are to take account of the need to alleviate energy poverty by requiring, as far as appropriate, that a proportion of energy efficiency measures under their national EEOS, alternative policy measures or programmes/measures financed under an EENF be implemented as a priority among vulnerable households, including those affected by energy poverty and, where appropriate, in social housing (56).

For the purpose of the NECPs, Member States must assess the number of households in energy poverty in accordance with Article 3(3)(d) of the Governance Regulation (57).

Taking into account their existing practices, Member States should set criteria for how they will address energy poverty in their policy measures. Long-term measures to renovate and improve the energy performance of the building stock, as required under the Energy Performance of Buildings Directive (‘EPBD’) (58), will also benefit those affected by energy poverty. Under Article 2a EPBD, Member States have to produce long-term strategies to support the renovation of the national stock of public and private residential and non-residential buildings into a highly energy-efficient and decarbonised building stock by 2050.

These are to:

—	facilitate the cost-effective transformation of existing buildings into nearly zero-energy buildings; and

—	encompass an outline of relevant national action to help alleviate energy poverty (59).

As of its entry into force and transposition/implementation in national law, this requirement to take account of the need to alleviate energy poverty applies to measures taken under EEOSs and alternative policy measures. Member States are free to decide which kind of policy measures they use, since both are on an equal footing. However, the measures chosen have to be aimed at alleviating energy poverty.

The EU Energy Poverty Observatory is a Commission initiative to help Member States improve the measuring, monitoring and sharing of knowledge and best practice on energy poverty. It is aimed at helping Member States in designing policy measures. The ‘Policies & Measures’ section of the Observatory's website (60) contains examples of specific types of policies and measures.

4.4.   Choice of sectors

Member States have the flexibility to target one or more specific sector(s) in order to meet the energy savings obligation, by introducing policy measures in line with Article 7a or 7b EED (61). Under sections 3.1, 3.2 and 3.3 of Annex III to the Governance Regulation, they have to provide information on the sector(s) (and, in the case of taxation, the taxpayer segment) targeted by each measure. Annex V(2)(d) EED permits measures to improve the energy efficiency of products, equipment, transport systems, vehicles and fuels, buildings and building elements (62), processes or markets.

Where appropriate, such measures should be consistent with the national policy frameworks established pursuant to Directive 2014/94/EU of the European Parliament and of the Council (63). Member States might target, for example, the buildings or the industry sector.

According to the assessments of achieved and expected energy savings notified by Member States in their annual reports and national energy efficiency and action plans (‘NEEAPs’) under Article 24 EED, it is expected that:

—	the biggest proportion of savings will be in general generated by measures targeting buildings (supported, for example, by renovation financing schemes);

—	the second and third biggest proportions will come from industry and transport; and

—

the EEOS (a cross-sector policy) will generate the highest share of savings per policy measure; it also targets buildings, through measures promoting the replacement of heating systems, etc (64). Other sectors with untapped energy saving potential (e.g. transport and water) could contribute to achieving the energy saving obligation in/2021-2030

4.4.1.   Transport sector

Based on reports from Member States, the Commission concluded in its 2016 impact assessment that 6 % of the energy savings under Article 7 could be associated with measures targeting the transport sector (65).

Since the first NEEAPs in 2014 and most recently in their 2017 NEEAPs, Member States have updated their lists of EEOSs and alternative policy measures, and have notified more transport measures. These developments indicate that the (potential) proportion of energy savings achieved in the transport sector in 2014-2020 may be even higher than assessed in the impact assessment.

Given that final energy consumption in transport is included in the calculation baseline, this may be an obvious sector to target to achieve the 2021-2030 savings obligation.

Examples

Policy measures could promote more efficient vehicles (exceeding the minimum levels laid down in Regulations (EC) No 443/2009 (66), (EU) No 510/2011 (67) or (EU) 2019/631 of the European Parliament and of the Council (68) or the revised Clean Vehicles Directive (69)), a modal shift to cycling, walking and collective transport, or mobility and urban planning that reduces demand for transport.

Measures that accelerate the uptake of new, more efficient vehicles or policies fostering a shift to better-performing fuels that reduce energy use per kilometre may also be eligible, subject to materiality and additionality (see Annex V(2)).

4.4.2.   Water sector

Energy and water correlate closely in economic life and at many levels (‘ water-energy nexus ’). Water is needed for energy purposes, e.g. for cooling, storage, biofuels or hydropower. Energy is needed for water purposes, e.g. to pump, treat and desalinate (70).

The energy generation sector is the largest consumer of water, accounting for 44 % of consumption (71). The water and wastewater sectors account for 3,5 % of electricity use in the EU and that share is expected to rise (72). At the same time, leaks account for 24 % of total water consumed in the EU, representing significant wastage and a loss in terms of wasted water resources and in terms of the energy used to treat those resources.

With the entry into force of the Governance Regulation and the amended EED, the ‘energy efficiency first’ principle applies. The water sector can be amongst the beneficiaries of this principle'.

The effective and energy efficient management of water can contribute significant energy savings. According to the International Energy Agency (IEA), 10 % of global water withdrawals relate to energy production and this figure is expected to increase significantly with the promotion of several low-carbon but water-intensive processes, including electricity generation, biofuel production and carbon-capture-and-storage (73). Member States could therefore explore the potential for energy savings through the use of smart technologies and processes.

By fully exploring the potential for energy savings by using smart technologies and processes — which Member States are encouraged to use by the EED (74) — Member States could find solutions to break the link between energy consumption and consumption of water.

Member States could, for example, assess the potential of the construction of two-tier system necessary for separate treatment of storm water and sanitary wastewater. This could avoid the need for additional water treatment capacities which might result in increased energy consumption.

Member States have notified a limited number of water-related measures to meet the energy savings obligation in Article 7. The most common is the production of hot water by solar collectors (replacement of non-renewable-based hot-water production) or more efficient gas water-heaters, but such measures relate to heat generation rather than water production.

Policy measures relating to the energy-efficient production of drinking water could be considered along the whole supply chain (distribution, use and wastewater treatment). To date, the main national objectives have been to ease water scarcity and improve water quality. Apart from installing more efficient pumps, the notified action results in energy savings indirectly via reduced water demand or the reuse of water.

The potential for saving energy in the water sector lies in:

—	reducing the amount of energy used to produce and treat different types of water; and

—	reducing water demand and network losses, which translates into lower energy requirements for pumping and treatment.

Energy savings in the water sector can relieve municipalities' budgets. Especially when municipalities own the water utility, the electricity consumption of (waste) water plants might represent a significant share of its electricity bill. As, for example, the awareness, experience, capacities can vary largely from one municipality to the other, regional or national programmes can be useful to facilitate experience sharing, technological support and financial aids could thus increase the energy savings potential.

Indicative non-exhaustive examples

Member States could take measures to save energy in the production, use and disposal of water in all its forms along the whole supply chain:

—	the production of drinking water (pumping, cleaning of groundwater or surface water, desalination of sea water);

—	reducing water losses along the distribution network;

—	reducing the use of water by end-users (including use for industrial processes, irrigation, households);

—	reducing water use through the recirculation of domestic water;

—	cleaning wastewater for reuse or discharge (pumping, wastewater treatment processes, heat recovery); and

—	reducing energy use for storm water treatment (reducing the burden of treatment on storm water systems).

5.   IMPACT OF THE REVISION ON THE FIRST OBLIGATION PERIOD

Member States must bring into force the laws, regulations and administrative provisions necessary to comply with the amended energy savings obligation at the latest 18 months after the entry into force of the EED, i.e. by 25 June 2020.

Member States must comply with:

—	the common methods and principles of calculating the impact of EEOSs or other policy measures (Annex V EED);

—	the requirement to take account of the need to alleviate energy poverty when designing policy measures (EEOS and alternative policy measures), although different measures may be taken to target households affected by energy poverty (Article 7(11) EED);

—	the provision that savings resulting from the implementation of EU law cannot be claimed, except renovation measures and the early replacement of more efficient appliances and vehicles (Annex V(2)(b) EED);

—	the requirement that the calculation of energy savings is to take account of the lifetime of measures and the rate at which savings decline over time (Annex V(2)(g) EED — from entry into force); and

—	the requirement that, in fulfilling their savings obligation, retail energy sales companies (under the EEOS) do not impede consumers from switching from one supplier to another (Article 7a(3) EED).

Member States may transpose and implement the amended EED before the deadline. In such cases, they may for the remaining time before the end of the first obligation period:

—	make use of the derogation under Article 7(8) EED;

—	make use of the derogation under Annex V(2)(b) EED; and

—	decide that obligated parties fulfil the savings obligation, in whole or in part, as a contribution to the EENF (Article 20(6) EED).

Member States that make use of Article 7(4)(a)-(d) EED for the calculation of the amount of energy savings required for the first obligation period must apply and calculate the effect of the options chosen for the first period separately according to Article 7(5)(a) EED.

6.   COUNTING TOWARDS THE ENERGY SAVINGS OBLIGATION

Article 7(1) EED provides that the two obligation periods (2014-2020, as referred to in point (a) in the first subparagraph of Article 7(1) EED, and 2021-2030, as referred to in point (b)) are two separate periods.

In principle, as already provided for in respect of the first period, only energy savings obtained within a period count towards the achievement of the obligation for that period, unless provided otherwise in the EED.

Member States may not count energy savings retrospectively, i.e. under Article 7(7) EED, savings achieved after 31 December 2020 cannot count towards the amount required for 2014-2020.

Under the second subparagraph of Article 7(1) EED, Member States may count savings that stem from policy measures introduced before or after 31 December 2020 towards the amount required for 2021-2030, provided that the measures result in new individual actions after 31 December 2020  (75).

In principle, Member States may count energy savings obtained in a given year only for that year. However, Article 7a(6)(b) EED allows those with an EEOS to allow obligated parties to count savings obtained in a given year for any of the 4 previous or 3 following years as long as this falls within the relevant obligation period, as set out in Article 7(1) EED.

Indicative example

Savings achieved in 2014 may be counted for 2017 (three years later), but savings achieved in 2024 cannot be counted for 2020, although this is one of the 4 previous years, as it is in a separate obligation period.

Article 7(8) EED is a specific derogation from the principle. If an EEOS in force at any point between 31 December 2009 and 31 December 2014 allowed an obligated party to make use of ‘banking and borrowing’ (Article 7a(6)(b) EED), the Member State in question may count energy savings obtained in any given year after 2010 and before 1 January 2014 as if they had been obtained after 31 December 2013 and before 1 January 2021, provided that all of the requirements in Article 7(8) EED are fulfilled:

‘(a)	the energy efficiency obligation scheme was in force at any point between 31 December 2009 and 31 December 2014 and was included in the Member State's first NEEAP submitted under Article 24(2);

(b)	the savings were generated under the EEOS;

(c)	the savings are calculated in accordance with Annex V; and

(d)	the years for which the savings are counted as having been obtained have been reported in the NEEAP.’

7.   COMMON METHODS AND PRINCIPLES FOR CALCULATING THE IMPACT OF ENERGY EFFICIENCY OBLIGATION SCHEMES OR OTHER POLICY MEASURES UNDER ARTICLES 7, 7A, 7B AND 20(6)

Article 7(9) EED requires Member States to ensure that energy savings resulting from policy measures referred to in Articles 7a, 7b and 20(6) EED are calculated in accordance with Annex V EED.

7.1.   Measurement methods

7.1.1.   Measurement methods for policy measures other than taxation measures

Annex V, part 1 EED sets out methods for calculating energy savings other than those arising from taxation measures for the purposes of Articles 7, 7a, 7b and 20(6) EED.

Obligated, participating or entrusted parties, and implementing public authorities may use the following methods for calculating energy savings:

‘(a)	deemed savings, by reference to the results of previous independently monitored energy improvements in similar installations. The generic approach is termed “ex ante”;

(b)

metered savings, whereby the savings from the installation of a measure, or package of measures, are determined by recording the actual reduction in energy use, taking due account of factors such as additionality, occupancy, production levels and the weather which may affect consumption. The generic approach is termed “ex post”;

(c)

scaled savings, whereby engineering estimates of savings are used. This approach may be used only where establishing robust measured data for a specific installation is difficult or disproportionately expensive, e.g. replacing a compressor or electric motor with a different kWh rating than that for which independent information about savings has been measured, or where those estimates are carried out on the basis of nationally established methodologies and benchmarks by qualified or accredited experts that are independent of the obligated, participating or entrusted parties involved;

(d)

surveyed savings, where consumers' response to advice, information campaigns, labelling or certification schemes or smart metering is determined. This approach may be used only for savings resulting from changes in consumer behaviour. It shall not be used for savings resulting from the installation of physical measures.’

7.1.2.   Measurement methods for taxation measures

For determining the energy savings from tax-related policy measures introduced under Article 7b EED (76), the principles in Annex V(4) EED apply:

‘(a)	credit shall be given only for energy savings from taxation measures exceeding the minimum levels of taxation applicable to fuels as required in Council Directive 2003/96/EC or 2006/112/EC,

(b)	price elasticities for the calculation of the impact of the (energy) taxation measures shall represent the responsiveness of energy demand to price changes, and shall be estimated on the basis of recent and representative official data sources;

(c)	the energy savings from accompanying taxation policy instruments, including fiscal incentives or payment to a fund, shall be accounted separately.’

7.2.   Lifetime of measures and rate of decline over the lifetime

Annex V(2), point (i) EED provides that ‘the calculation of energy savings shall take into account the lifetime of the measures and the rate at which the savings decline over time. That calculation shall count the savings each individual action will achieve during the period from its date of implementation to 31 December 2020 or 31 December 2030 as appropriate. Alternatively, Member States may adopt another method that is estimated to achieve at least the same total quantity of savings. If they use another method, Member States shall ensure that the total amount of energy savings calculated using that method does not exceed the amount of energy savings that would have been the result of their calculation when counting the savings each individual action will achieve during the period from its date of implementation to 31 December 2020 or 31 December 2030 as appropriate’.

The concept of the ‘lifetime’ of an individual energy-saving action refers to the fact that savings may be obtained not only in the year of implementation, but also in future years. The ‘lifetime’ is therefore the period for which the action will continue to deliver measureable savings.

In calculating energy savings over the lifetime of an action, Member States may:

—

attribute to each action the ‘real’ savings that it will achieve between the year of its implementation and the end of the second obligation period (i.e. 31 December 2030) — this is referred to as the ‘straightforward’ method (77). The attribution of savings beyond 2030 is not permitted. Member States may count savings from policy measures introduced before 2030 for the energy savings obligation post-2030 only if those measures result in a new individual action in the subsequent obligation period;

—	apply an ‘index value’ that reflects the expected lifetime (78);

—	‘cap’ the lifetimes attributed to individual actions (79) — for example, the Member State could ‘cap’ the lifetime at 5 years. Member States using this method must ensure that the result is not higher than that given by the ‘straightforward’ approach; or

—	use full lifetimes, but ‘discount’ future-year savings (80) — under this method, the Member State could discount the savings in the subsequent years at a rate of 10 % per year, if reasonable. Again, it must ensure that the result is not higher than that given by the ‘straightforward’ approach.

In counting savings towards the required amount of cumulative end-use energy savings from any policy measure, Member States must take into account:

(i)	when the measure is implemented;

(ii)	the amount of annual energy savings; and

(iii)

whether the measure will still result in energy savings in 2030 (81).

Regarding policy measures targeting buildings, the EU standard EN 15459-1:2017 (82) already provides guidelines for the assessment of lifetimes.

Particular care should be taken when claiming lifetimes for behavioural measures that are not associated with the installation of physical measures (83). Behavioural measures are highly reversible, since the duration over which an efficient behaviour will be sustained can depend on a variety of factors. If, for example, the efficient behaviour promoted is eco-driving, depending on the drivers and the type of eco-driving training, the effects of an eco-driving training can last only a few days, but also up to several years.

Examples on how lifetimes of measures could be accounted for

1.   ‘Straightforward’ method

An individual action (e.g. window replacement) saves 1 toe of energy consumption per year and goes on delivering this saving year after year. If the action is carried out in 2021, it will save 1 toe in 2021 and 1 toe in each subsequent year up to 2030, i.e. a total of 10 toe to 2030. If the action is carried out in 2022, it will save 1 toe each year from 2022 to 2030, i.e. a total of 9 toe. If it is carried out in 2030, it will contribute to the requirement only that year, i.e. a total of 1 toe.

A Member State has to save 65 Mtoe over the period and expects to achieve this by means of one information campaign per year delivering, for example, a million actions (a survey has demonstrated that the effectiveness of each action is 1 toe), and a million window replacements per year (the deemed value of each is estimated to be 1 toe). Each of the information campaigns would deliver 1 Mtoe in the year in which it is conducted and the 10 campaigns 10 Mtoe in total over the 10 years by 31 December 2030. There will be savings equal to 10 Mtoe for the million windows replaced the first year, 9 Mtoe for the million replaced the second year, 8 Mtoe for the third, 7 Mtoe for the fourth, 6 Mtoe for the fifth, 5 Mtoe for the sixth, 4 Mtoe for the seventh, 3 Mtoe for the eighth, 2 Mtoe for the ninth and 1 Mtoe for the 10th, i.e. 55 Mtoe in total by 31 December 2030. The savings from information campaigns and window replacements are thus 10 Mtoe + 55 Mtoe = 65 Mtoe.

By contrast, a shorter-lived action (e.g. an information campaign) may save 1 toe in the year of implementation and nothing thereafter. Whatever the year of implementation between 2021 and 2030, its contribution will be 1 toe.

If a Member State introduces predominantly individual actions with short lifetimes at the beginning of the 10-year obligation period, it will need to take additional measures to reach the savings required under point (b) in the first subparagraph of Article 7(1).

The ‘straightforward’ method clearly fulfils the condition that the calculation method must lead to the required quantity of savings actually being achieved. However, Member States may consider alternative methods more appropriate.

2.   ‘Index value’ method

One alternative is to give each action an ‘index value’ that reflects its expected lifetime. An information campaign could be given an index value of 0,25, while a window replacement could be given an index value of 6. If each of these actions saves 1 toe per year, the saving attributed to an information campaign would be (1 × 0,25 toe) = 0,25 toe. The saving attributed to a window replacement, whatever the year of implementation, would be (1 × 6 toe) = 6 toe.

The information campaigns would then count as delivering 0,25 Mtoe in the year in which they are conducted or 2,5 Mtoe in total for 10 campaigns over the 10 years to the end of 2030. If 7 million window replacements are carried out over the period, this will deliver savings of 7 Mtoe multiplied by the factor of 6, giving 42 Mtoe. The savings from information campaigns and window replacements would then be counted as 2,5 Mtoe + 42 Mtoe = 44,5 Mtoe.

A Member State using this method must ensure that the result is not higher than that given by the ‘straightforward’ approach.

3.   ‘Cap’ method

Another alternative is to ‘cap’ the lifetimes attributed to individual actions. For example, a ‘cap’ of 5 years could be chosen. The saving attributed to an information campaign would be 1,25 Mtoe, e.g. 0,25 Mtoe in 2022, 0,25 Mtoe in 2023, 0,25 Mtoe in 2024, 0,25 Mtoe in 2025 and 0,25 Mtoe in 2026. The saving attributed to a window replacement, whatever the year of implementation, would be (1 × 5) = 5 Mtoe, e.g. 1 Mtoe in 2022, 1 Mtoe in 2023, 1 Mtoe in 2024, 1 Mtoe in 2025 and 1 Mtoe in 2026.

Again, a Member State using this method must ensure that the result is not higher than that given by the ‘straightforward’ approach.

To reflect the full value of a policy measure for energy efficiency, Annex V(2)(i) EED requires Member States to take account of the decline of energy savings over the lifetime of each measure (84). The intention is to ensure that the savings are accounted realistically, given that, for example, a new energy-efficient product may not generate the same energy savings after some years of use (85). Therefore, Member States must take this into account in their methodologies. The declining rate may vary by type of policy measure and must be notified and explained by each Member State in line with Annex V(2)(i) EED (86).

7.3.   Additionality

The additionality requirement needs to be taken into account when determining energy savings for all kinds of policy measure. The basic principles are set out in Annex V(2)(a) and (b) EED:

‘(a)

The savings shall be shown to be additional to those that would have occurred in any event without the activity of the obligated, participating or entrusted parties, or implementing public authorities. To determine the savings that can be claimed as additional, Member States shall have regard to how energy use and demand would evolve in the absence of the policy measure in question by taking into account at least the following factors: energy consumption trends, changes in consumer behaviour, technological progress and changes caused by other measures implemented at Union and national level.

(b)	Savings resulting from the implementation of mandatory Union law shall be considered to be savings that would have occurred in any event and thus cannot be claimed as energy savings for the purpose of Article 7(1) …’

This means that, if EU law requires Member States to achieve a certain amount or degree of savings, they can claim only savings above this level — provided that other requirements are fulfilled, e.g. it can be shown and verified that the savings are due to the action/measure in question.

Annex V(2)(a) EED also requires Member States to look at current market developments and establish a baseline scenario. This is particularly important to avoid counting ‘free riders’ which are common in the context of supplier obligations and financial support schemes. For example, if a national support scheme for building renovation supports 100 individual actions in a given year, some of those actions would have happened anyway (without the scheme) and must be deducted.

Likewise, when a policy is in place for many years, it is very likely that it has market transformation effects. For example, private stakeholders will take it into account in their own strategies to develop products, services, etc. This means, for example, that the current trends in the market average can be partly due to the effects of policy from previous years. Therefore, if a survey is conducted to assess ‘free-rider’ effects, it is likely that some of these effects today are also spill-over effects from previous years. Annex V(2)(b) and (c) EED provide derogations from these basic principles:

‘… By way of derogation from that requirement, savings related to the renovation of existing buildings may be claimed as energy savings for the purpose of Article 7(1) provided that the materiality criterion referred to in point 3(h) of Annex V is ensured. Savings resulting from the implementation of national minimum requirements established for new buildings prior to the transposition of Directive 2010/31/EU can be claimed as energy savings for the purpose of point (a) of Article 7(1), provided that the materiality criterion is ensured and those savings have been notified by Member States in their National Energy Efficiency Action Plans in accordance with Article 24(2).

(c)

Credit may be given only for savings exceeding the following levels: (i) Union emission performance standards for new passenger cars and new light commercial vehicles following the implementation of Regulations (EC) No 443/2009 and (EU) No 510/2011 of the European Parliament and of the Council; (ii) Union requirements relating to the removal from the market of certain energy related products following the implementation of implementing measures under Directive 2009/125/EC.’

Furthermore, Member States need to consider and exceed with their national laws levels set by the Regulation (EU) 2019/631, and minimum targets for the public procurement of clean and zero-emission vehicles for certain road transport vehicles following the implementation of the revised Clean Vehicles Directive.

7.3.1.   Additionality in relation to measures targeting the renovation of buildings (87)

As a general principle, Annex V(2)(b) EED provides that energy savings resulting from the implementation of mandatory EU law are to be considered as savings that would have occurred in any event and should thus not be claimed.

In general, building codes associated with the energy performance of buildings lay down mandatory requirements under EU law (the EPBD) and are part of the ‘business as usual’ scenario.

By way of derogation, Member States may count in full savings from the renovation of buildings, provided that the materiality criterion referred to in Annex V(3)(h) EED is satisfied and all energy savings stem from policy measures promoting the renovation. They must also show that the savings claimed from the measures exceed savings that would have occurred in the absence of the measures. They should demonstrate that the obligated, participating or entrusted party has contributed to the achievement of the savings claimed (88).

The starting point for calculating the savings is to measure the consumption of the building before and after the renovation. Member States may use this derogation for both obligation periods, from the entry into force of the amending Directive (EU) 2018/2002, i.e. since 24 December 2018.

Example

A national building code requires that buildings undergoing major renovation be upgraded to at least energy performance class B. The Member State concerned cannot claim the resultant savings for the purposes of Article 7.

However, it can claim savings if it has taken a measure promoting the renovation (e.g. it provides households with a subsidy for a renovation that they would otherwise not undertake). In that case, all the savings resulting from that measure can be claimed irrespective of the energy class upgrade (i.e. all savings can be claimed for energy upgrades from class D to C or from D to B, or from D to A, etc.).

Renovation projects have to comply with national minimum energy performance requirements established under the EPBD. Measures that can support a higher degree of ambition, i.e. energy performance that goes beyond what is required, may be encouraged.

7.3.2.   Additionality in relation to measures targeting the construction of new buildings

From the entry into force of the amended EED and, if necessary, from national transposition or implementation, Member States may count energy savings resulting from the implementation of national minimum requirements established for new buildings only towards the savings required for the first obligation period (2014-2020), provided that:

(i)	they meet national minimum requirements established prior to the transposition of the EPBD, i.e. by 9 July 2012 (see Article 28(1) EPBD);

(ii)	they are ‘material’; and

(iii)

they have been notified in the NEEAP by 30 April 2017 (see Article 24(2) EED).

Energy savings can only be claimed from the date of entry into force of the amended EED and only towards the cumulative end-use savings required by 31 December 2020. Member States must show that the application of the national minimum requirements led to measurable savings that would not otherwise have been achieved. If any national transposition or implementation measures are necessary to allow those savings to be claimed, these must be adopted and in place before any savings are claimed.

If a Member State makes use of the derogation, it should carefully assess possible interaction with the exemption provided for in Article 7(4)(d) EED (‘early action’) and ensure that double-counting is avoided.

Building`s construction projects must comply with national minimum energy performance requirements. Measures that can support a higher degree of ambition, i.e. energy performance that goes beyond what is required, may be encouraged.

7.3.3.   Additionality in relation to public bodies' buildings

In principle, the derogation from the principle of additionality in Annex V(2)(b) EED also applies to energy savings related to the renovation of public bodies' buildings, since such savings are ‘related to renovation of existing buildings’ (see second sentence in Annex V(2)(b) EED).

The aim of the derogation is to allow Member States, from the entry into force of the amending Directive, to claim all energy savings for the purpose of Article 7(1) EED stemming, for example, from measures taken to achieve the renovation rate of 3 % floor area of heated and/or cooled buildings owned and occupied by central government (see Article 5).

However, Member States have to show that all savings claimed stem from policy measures implemented for the renovation of public bodies' buildings (89). They cannot count energy savings that would have occurred in the absence of the policy measure. Hence, Member States need to demonstrate materiality. If any national transposition or implementation measures are necessary to allow those savings to be claimed, these must be put in place before any savings are claimed.

Member States have to calculate energy savings claimed from policy measures implemented for the renovation of public bodies' buildings in accordance with Annex V. The amount of energy savings which is counted towards the required end-use energy savings under Article 7(1) EED shall be expressed in final energy consumption. If the amount of energy savings is expressed in primary energy, Member States have to use the conversion factors set out in Annex IV EED.

7.3.4.   Additionality in relation to implementing measures under the Ecodesign Directive (90)

The replacement of boilers only is not considered as a renovation measure, because of the specific provision in Annex V(2)(c) EED. Thus, the starting point will always be the minimum requirements under the specific ecodesign provisions (91). Energy savings resulting from the replacement of appliances regulated by ecodesign legislation, e.g. space heaters, may be counted only if they exceed the minimum ecodesign requirements, except in the case of early replacement (see Annex V(2)(e) EED).

If Member States provide incentives or subsidies for products covered by EU energy labelling regulations, it is recommended that they target the higher classes of energy efficiency. For example, an incentive or subsidy to encourage the installation of new, more energy-efficient boilers would only cover boilers in the two highest significantly populated classes of the energy label for boilers, based on market data relevant to the period in question.

7.3.5.   Additionality in relation to energy audits under Article 8

Article 8(4) requires Member States to ensure that large enterprises (i.e. firms that are not SMEs) conduct an energy audit every 4 years; this does not in itself lead to energy savings.

Measures to encourage or support the implementation of the recommendations of an audit go beyond the minimum required under Article 8 — the second subparagraph of Article 8(7) provides that Member States ‘ may implement an incentive or support scheme’. Therefore, energy savings resulting from such measures can be counted, as they would not have happened anyway, provided the materiality criterion is fulfilled. The same applies for savings that result from measures targeting SMEs.

7.4.   Materiality and eligibility

In addition to the additionality principle, Member States need to satisfy the ‘materiality’ criterion. The automatic roll-out of EU legislation or autonomous improvements because of market forces or technological developments (for example) cannot be taken into account, as Member States may not count actions that would have happened anyway.

The activities of national public authorities in implementing the policy measure must be ‘material’ to the achievement of the energy savings claimed; in other words:

—	they must have contributed to the individual action in question; and

—	the subsidy or involvement of the obligated, participating or entrusted party must clearly have had more than a minimal effect on the end-user's decision to undertake the energy-efficiency investment.

Therefore, Member States need to show that the savings are caused by a policy measure designed to trigger end-use energy savings (92). Measures taken pursuant to Regulation (EU) 2018/842 of the European Parliament and of the Council (93) can be considered material, but Member States have to show that they result in verifiable and measurable or estimable energy-efficiency improvements.

For financing schemes, for example, an indication of the amount of subsidy is not enough to demonstrate materiality, since this alone does not prove that subsidies have influenced end-users' investment decisions. The role played by actors involved in the actions may in principle be proved without a subsidy as a benchmark; standardised actions (e.g. creation of installation standards for products, energy advice and energy audits followed by the actual implementation of actions) could be an important materiality indicator.

To ensure compliance, Member States could set general materiality requirements under an EEOS or alternative measures and verify these on a project-by-project basis (94). These could establish that parties (e.g. when applying for a ‘white certificate’  (95)) must document and prove a direct contribution to the implementation of the action.

Obligated parties could be required to prove:

—	whether the contribution has been delivered directly or indirectly (i.e. by intermediaries); and

—	whether it has been decided prior to the installation of the action.

Member States could also require, for example, that:

—	a contract be concluded between distribution system operators (i.e. the obligated parties) and third parties;

—	energy savings not be generated before the contract is issued;

—	parties can count savings only where they have been directly involved in the implementation of the measure (e.g. by providing energy audits, subsidies, etc.); and

—	agreements be drawn up covering the whole chain from obligated actors to energy end-users.

7.5.   Measures promoting the installation of small-scale renewable energy technologies on or in buildings for own use

It is important to distinguish between:

—	the possibility provided for in Article 7(4)(f) EED, which refers to an amount of energy generated on or in buildings for own use that can be excluded from the amount of energy savings calculated in accordance with Article 7(2) and (3) EED; and

—	the clarification in Annex V(2)(e) EED, whereby savings stemming from measures promoting the installation of small-scale renewable energy technologies on or in buildings can in principle be counted towards the savings required under Article 7(1).

This is also explained in recital 43 EED.

Under Annex V(2)(e) EED, Member States may count energy savings stemming from measures promoting the installation of small-scale renewable energy technologies on or in buildings for own use towards the required amount of energy savings under Article 7(1) EED, provided that those measures result in verifiable, and measurable or estimable end-use energy savings and are calculated in accordance with Annex V EED (96).

Thus, the requirements of additionality and materiality, and the Member State's established monitoring and verification rules also apply.

Member States must show that such measures result in end-use energy savings because of the technological switch. For example, savings from switching to more efficient heating and hot-water technologies in buildings, including renewable energy technologies, remain fully eligible as long as Member States can ensure that they are additional, measurable and verifiable according to the methods and principles in Annex V (97).

This is clarified in Annex V(2)(e) EED and is geared to the overall objective of Article 7(1) EED, i.e. to save energy in end-use, regardless of the technology (be it a measure promoting renewable or fossil energy fuelled technology, which results in reduced actual energy use in buildings, transport or industry).

Annex V(2)(e) EED refers explicitly to the energy savings obligation under Article 7(1), which requires Member States to achieve cumulative end-use energy savings and aims at actual reduction in energy use by a natural or legal person (in line with Annex V(1)(b)). Article 2(5) defines ‘ energy savings ’ as an amount of saved energy determined by measuring and/or estimating consumption before and after implementation of an energy efficiency improvement measure, while ensuring normalisation for external conditions that affect energy consumption. Since Article 7 EED aims at an actual reduction of energy end-use, it can be concluded that Annex V(2)(e) requires that measures promoting the installation of small-scale renewable energy technologies on or in buildings be shown to result in energy savings, i.e. an actual reduction in end-use energy.

Member States have the flexibility to express the energy savings in terms of either final or primary energy consumption, as provided for in Annex V(3)(d) (alternative policy measures) and Article 7a(4) (EEOS). This flexibility does not alter the obligation for cumulative energy savings in terms of energy sales (in the period to 2020) and final energy consumption (2021-2030).

7.6.   Measures promoting the uptake of more efficient products and vehicles

Member States' energy efficiency improvement measures in transport are eligible to be taken into account for achieving their end-use energy savings obligation (98). Such measures include:

—	policies to promote more efficient vehicles or a modal shift to cycling, walking and collective transport; and

—	mobility and urban planning that reduces demand for transport.

The public procurement of clean and zero-emission vehicles are eligible, subject to their additionality to the minimum requirements of the revised Clean Vehicle Directive.

Schemes that accelerate the uptake of new, more efficient vehicles or policies fostering a shift to better-performing fuels that reduce energy use per kilometre are also eligible, subject to compliance with the rules on materiality and additionality (99).

Annex V(2)(f) clarifies that full credit may be claimed for policies that accelerate the uptake of more efficient products and vehicles, provided that it is shown that:

—	such uptake takes place before expiry of the average expected lifetime of the product or vehicle, or before the product or vehicle would usually be replaced; and

—	the full amount of savings is claimed only for the period until the end of the average expected lifetime of the product or vehicle to be replaced (100).

Where appropriate, such measures should be consistent with Member States' national policy frameworks established pursuant to Directive 2014/94/EU on the deployment of alternative fuels infrastructure.

7.7.   Ensuring that quality standards are maintained

Annex V(2)(g) EED clarifies that the promotion of energy-efficiency measures must not lower quality standards for products, services and the installation of measures. Member States must ensure that quality standards are maintained, or introduced where they do not yet exist.

7.8.   Addressing climatic variations

Annex V(2)(h) EED allows Member States to adjust energy savings to address climatic variations between regions. The provision lists two options:

(i)	adjust to a standard value; or

(ii)	attribute different energy savings in accordance with temperature variations.

7.9.   Avoiding double-counting

Article 7(12) EED requires Member States to demonstrate that energy savings are not double-counted where the impacts of policy measures or individual actions overlap. Given the wide variety of instruments notified by Member States and the high likelihood of policy overlaps from the use of EEOSs and alternative measures in tandem (e.g. interaction between energy taxation and subsidies to households to replace windows or space heaters), it is crucial to address the risks of double-counting.

A national database could be an effective tool in this respect. For example, the database would register that a subsidy to encourage the replacement of old boilers had been paid to a certain household and alert the user if the same household applied again.

Using multiple policy measures in combination results in greater complexity for the Member States, in terms of:

—	greater effort associated with implementation, e.g. calculating the energy savings; and (more importantly)

—	ensuring: — enforcement, especially where the different instruments are extensive in scope; and — verification of the impact without double-counting.

Article 7(12) EED also forbids double-counting where policies overlap, i.e. Member States must take account of the fact that other policy measures carried out in the same timeframe may have an impact on the amount of energy savings, so not all changes observed since the introduction of a particular policy measure can be attributed to that measure alone.

8.   MEASUREMENT, MONITORING, CONTROL, QUALITY AND VERIFICATION

The EED emphasises the importance of monitoring and verification rules for the implementation of EEOSs and alternative policy measures, including the requirement to check a statistically representative sample of measures.

Selecting a statistically significant proportion and representative sample of the energy efficiency improvement measures involves establishing a subset of a statistical population of energy-saving actions within each measure that accurately reflects the entire population of all energy-saving actions and thus allows for reasonably reliable conclusions to be drawn regarding confidence in the totality of the measures (101).

Article 7a(5) EED (for EEOSs)

Article 7b(2) EED (for alternative policy measures)

The measurement, control and verification systems should ensure that the energy savings calculations are verified in respect of a statistically significant proportion and representative sample of the energy-efficiency improvement measures.

These requirements can be met, inter alia, by means of

—	automatised computer checks or desktop review of the data and calculations reported by the obligated, participating or entrusted parties, or by the beneficiaries (where the beneficiaries report the data directly to the public authority);

—	evaluating metered energy savings on a statistically significant proportion and representative sample of measures or beneficiaries;

—	using verifications carried out under a regulation, qualification, accreditation or certification scheme, e.g. where the reported energy savings are based on energy audits or energy performance certificates (scaled savings).

The documentation for the policy measure should explain how the requirements of this other scheme ensure that controls or verifications are carried out on a statistically significant proportion and representative sample of the energy audits or other savings assessments.

The monitoring and verification system can be organised in different steps or levels. On-site inspections can be part of the approach, as a second stage of verification on sub-samples of individual actions identified as being at risk of non-compliance with the requirements of the measures. Where these are not technically or economically feasible, this can be explained in the documentation for the measure.

Member States must explain how they use benchmarks to check deemed or scaled savings (Annex V(5)(g) EED).

The independence of the measurement, control and systems (see Annex V(5)(j) EED) can be documented on the basis that the verification body (non-exhaustive list of criteria):

—	is a public body with statutory independence; or

—	has no financial link with (i.e. is not partly or fully owned nor paid by) the obligated, participating or entrusted parties; or

—	may be contracted by obligated, participating or entrusted parties, but in this case is subject to controls by the public authority or a qualification, accreditation or certification body.

The verification body can be:

—	directly in charge of the verification of energy-efficiency improvement measures or energy-savings calculations; or

—	in charge of controlling the verification processes and sampling verifications done by other organisations, including the obligated, participating or entrusted parties.

9.   PLANNING AND REPORTING OBLIGATIONS

9.1.   First obligation period

For the 2014-2020 obligation period, Member States must submit annual reports by 30 April 2019 and 2020 (Article 24(1) and Annex XIV, part 2) (102). In doing so, they report, inter alia, on progress towards the energy savings target and on policy measures adopted or planned pursuant to Annex XIV, part 2. This will be assessed by the Commission.

Article 27 of the Governance Regulation requires each Member State to report to the Commission by 30 April 2022 on the achievement of its national 2020 energy-efficiency target (as established pursuant to Article 3(1) EED) by providing the information set out in part 2 of Annex IX to the Governance Regulation.

9.2.   Second obligation period and beyond

For the 2021-2030 obligation period and beyond, the following major planning and reporting obligations apply (Articles 7, 7a and 7b and Annex V EED):

—	in their (draft and final) integrated NECP (Annex III to the Governance Regulation), Member States must show their calculation of the amount of energy savings to be achieved over the 2021-2030 period, as referred to in point (b) in the first subparagraph of Article 7(1) (see Article 7(6) EED);

—

since some data (e.g. annual final energy consumption, averaged over 2016-2018 (in ktoe)) might not have been available for notification in the first draft NECP (103), it might not have been possible to show the above calculation. However, Member States must show in their first final and subsequent draft and final NECPs how they have taken account of the elements listed in Annex III to the Governance Regulation;

—

in addition to the above and where relevant, Member States must explain in their (draft and final) NECP how they established the annual savings rate and the calculation baseline under Article 7(2) and (3) EED, and how and to what extent they applied the options referred to in Article 7(4) (see Article 7(6) EED);

—	if a Member State decides to apply one or more of the options in Article 7(4) EED, it must apply and calculate the effect for the obligation period (see Article 7(5) EED); and

—

if a Member State makes use of the option in Article 7(4)(c) EED for 2021-2030, it must inform the Commission of the intended policy measures in its (draft and final) NECP. It must calculate the impact of the measures in accordance with Annex V EED and include it in the NECP (see Article 7(4)(c)). It must submit this information for the first time in the first final NECP (by 31 December 2019).

In addition, Member States must:

—	include information on the outcome of measures to alleviate energy poverty in the context of the EED in their national energy and climate progress reports under Article 17 of the Governance Regulation (see Article 7(11) EED);

—	publish, on an annual basis, the energy savings achieved by each (sub-category of) obligated party and in total under the scheme (see Article 7a(7) EED); and

—

describe in detail in their NECPs the alternative method and provisions to ensure that they meet the requirement in Annex V(2)(i) EED, i.e. that the calculation of energy savings takes into account the lifetime of the measures and the rate at which savings decline over time. Alternatively, Member States may adopt another method that is considered to achieve at least the same total amount of savings. In this case, they must ensure that the amount calculated using that method does not exceed the amount from a calculation counting the savings each individual action will achieve during the period, from its date of implementation to 31 December 2020 or 2030 as appropriate.

In conclusion, the following planning and reporting obligations under the Governance Regulation also apply to the implementation and progress of the energy savings obligation under Articles 7, 7a and 7b and Annex V EED:

Timeline

31 December 2018 (subsequently 1 January 2028 and every 10 years thereafter)	Submission of draft NECP (Articles 9(1), 4 and 6, Annexes I and III Governance Regulation)
6 months before final NECP	Commission may issue recommendations to Member States whose contributions (including the contribution of the energy savings obligation towards Article 3(5) EED) it deems insufficient (Article 31(1) Governance Regulation)
31 December 2019 (subsequently 1 January 2029 and every 10 years thereafter)	Submission of final NECP (Articles 3(1), 4 and 6, Annexes I and III Governance Regulation)
10 March 2020	Submission of first long-term renovation strategy (Article 2a(8) EPBD)
By 31 October 2021 (and every 2 years thereafter)	Commission assessment of progress towards EU targets, in particular on the basis of the integrated national energy and climate progress reports (Article 29 Governance Regulation). As regards the energy savings obligation, Articles 29, 21 (integrated reporting on energy efficiency) and 24 (integrated reporting on energy poverty) of the Governance Regulation are relevant. In the event of insufficient progress by a Member State, the Commission will issue recommendations (Article 32(1) Governance Regulation).
By 30 April 2022	Report on the achievement of the 2020 energy efficiency targets by each Member State (Article 27 and Annex IX, part 2 Governance Regulation)
By 15 March 2023 (and every 2 years thereafter)	Report on implementation of the NECP (‘integrated national energy and climate progress report’) (Article 17 Governance Regulation)
30 June 2023 (subsequently 1 January 2033 and every 10 years thereafter)	Submission of draft update of NECP (Article 14(1) Governance Regulation)
30 June 2024 (subsequently 1 January 2034 and every 10 years thereafter)	Submission of final update of NECPs (Article 14(2) Governance Regulation)

9.3.   Notification of EEOSs and alternative measures (except taxation)

Under Annex V(5) EED and Annex III of the Governance Regulation, Member States must notify the Commission of their proposed detailed methodology for the operation of their policy measures, as referred to in Articles 7a, 7b and 20(6) EED. Except in the case of taxation (see section 9.4), the notification must include details of:

(a)	the level of energy savings required under point (b) in the first subparagraph of Article 7(1) or expected to be achieved over the whole 2021-2030 period;

(b)	obligated, participating or entrusted parties, or implementing public authorities;

(c)	target sectors;

(d)	policy measures and individual actions, including the expected total amount of cumulative energy savings for each measure;

(e)	the duration of the obligation period for the EEOS;

(f)	the actions provided for under the policy measures;

(g)	the calculation methodology, including how additionality and materiality have been determined and the methodologies and benchmarks used for deemed and scaled savings;

(h)	the lifetimes of measures, and how they are calculated or what they are based on;

(i)	the approach taken to address climatic variations within the Member State; and

(j)	the monitoring and verification systems for measures under Articles 7a and 7b and how their independence from the obligated, participating or entrusted parties is ensured.

In addition, part 3.1 and 3.2 of Annex III to the Governance Regulation requires Member States to notify the following information:

9.4.   Taxation measures

Annex V(5)(k) EED requires Member States (in accordance with the Governance Regulation) to notify the Commission of their methodology for the operation of taxation measures. In particular, they must notify the following details:

‘(i)	the target sectors and segment of taxpayers;

(ii)	the implementing public authority;

(iii)

the expected savings to be achieved;

(iv)	the duration of the taxation measure; and

(v)	the calculation methodology, including the price elasticities used and how they have been established.’

In addition, part 3.3 of Annex III to the Governance Regulation requires Member States to notify the following information on tax measures:

‘(a)	brief description of measures;

(b)	duration of measures;

(c)	implementing public authority;

(d)	expected cumulative and annual amount of savings per measure;

(e)	target sectors and segment of taxpayers;

(f)	calculation methodology, including which price elasticities are used and how they have been established, in accordance with point (4) of Annex V to Directive 2012/27/EU.’

Member States should show how they have calculated the elasticities and which recent and representative official data sources they have used (104).

10.   POST-2030 ENERGY SAVINGS OBLIGATION PERIOD

The second subparagraph of Article 7(1) EED requires Member States to continue to achieve new annual savings in accordance with point (b) in the first subparagraph for 10-year periods after 2030, unless reviews by the Commission by 2027 and every 10 years thereafter conclude that this is not necessary to achieve the EU's long-term energy and climate targets for 2050.

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(1)  See, inter alia, Economidou et al., 2018. Assessment of the Second National Energy Efficiency Action Plans under the Energy Efficiency Directive. EUR 29272 EN, Publications Office of the European Union, Luxembourg, 2018, ISBN 978-92-79-87946-3, doi:10.2760/780472, JRC110304 (report available at https://ec.europa.eu/jrc/en/publication/eur-scientific-and-technical-research-reports/assessment-second-national-energy-efficiency-action-plans-under-energy-efficiency-directive) and Tsemekidi-Tzeiranaki et al., 2019. Analysis of the Annual Reports 2018 under the Energy Efficiency Directive. EUR 29667 EN, Publications Office of the European Union, Luxembourg, 2019, ISBN 978-92-79-00173-7, doi:10.2760/22313, JRC 115238 (report available at http://publications.jrc.ec.europa.eu/repository/bitstream/JRC115238/kjna29667enn.pdf).

(1)  Article 2(3) EED defines ‘final energy consumption’ as ‘all energy supplied to industry, transport, households, services and agriculture. It excludes deliveries to the energy transformation sector and the energy industries themselves’. ‘End-use’ is not defined in the EED and should therefore be interpreted in line with the rationale of the energy savings obligation. Point (b) in the first subparagraph of Article 7(1) is aimed at reducing final energy consumption by lowering the amount of energy for own end-use by a natural or legal person (unless otherwise provided). Specific conditions are laid down for energy savings from renewable energy generated on or in buildings (see recital 43 EED and section 7.5 of this document).

(2)  See section 3.

(3)  Averaged over 2016-2018 (see point (b) in the first subparagraph of Article 7(1)).

(4)  See also section 2.3.

(5)  By contrast, point (a) in the first subparagraph of Article 7(1) refers to energy sales to final customers as a basis for establishing the calculation baseline for 2014-2020 (see SWD (2013) 451 final, p. 3).

(6)  = 100 × 0,8 % × 55.

(7)  https://unstats.un.org/unsd/energy/ires/

(8)  https://ec.europa.eu/eurostat/documents/10186/6246844/Eurobase-changes-energy.pdf (see p. 25).

(9)  The revised Eurostat methodology is described at:

https://ec.europa.eu/eurostat/documents/10186/6246844/Eurobase-changes-energy.pdf

(10)  Regulation (EC) No 1099/2008 of the European Parliament and of the Council of 22 October 2008 on energy statistics (OJ L 304, 14.11.2008, p. 1).

(11)  See sections 3.2 and 3.4.

(12)   ‘Total energy consumption for all energy use’.

(13)   ‘Final energy consumption’, as defined in Regulation (EC) No 1099/2008.

(14)  See 2.2.1. The new Eurostat methodology is described at:

https://ec.europa.eu/eurostat/documents/10186/6246844/Eurobase-changes-energy.pdf

(15)   0,24 % for Cyprus and Malta.

(16)  See Appendix I and sections 3.2, 3.3 and 3.4.

(17)  See Appendix I.

(18)  See Annex III(2) to the Governance Regulation.

(19)  Within the limits set in the second subparagraph of Article 7(5).

(20)  See section 9.

(21)  Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community as amended by Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009 and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, p. 32).

(22)  Alternatively, to establish the quantities of energy use in the non-ETS industries, the reported final energy use figure for the corresponding industrial sector could be multiplied by the ETS/non-ETS ratio of greenhouse gas emissions, as reported in the greenhouse gas inventories.

(23)  See section 9.

(24)  See section 7.5 and Appendix X.

(25)  The EED does not provide a definition on ‘energy generated on or in buildings for own use’. This concept should however be understood as a final customer operating on or within its building as defined in Article 2(1) of the Directive 2010/31/EU on the energy performance of buildings, who generates renewable energy for its own consumption, and who may store the self-generated renewable energy within its premises located within confined boundaries. The concept of ‘energy generated on or in buildings for own use’ excludes self-generated energy sold or fed back to the grid. For a non-household self-consumer, the concept excludes, in addition, energy generation constituting a primary commercial or professional activity.

(26)  The measures must therefore have been notified by 30 April 2017, as Article 24(2) was deleted on 24 December 2018 in accordance with Articles 59 and 54(3)(b) of the Governance Regulation.

(27)  Judgment of the Court of 7 August 2018 in Case C-561/16 Saras Energía (ECLI:EU:C:2018:633, paragraph 35) with reference, by analogy, to the judgment of 26 September 2013 in Case C-195/12 — IBV & Cie (ECLI:EU:C:2013:598, paragraphs 62 and 70).

(28)  Article 2(14) defines ‘obligated party’ as an energy distributor or retail energy sales company that is bound by the national EEOSs. Member States could also consider the role of local energy communities or renewable energy communities when designing EEOSs.

(29)  See Annex I, part 3.2, point v to the Governance Regulation.

(30)  Judgment in Case C-561/16 Saras Energía (ECLI:EU:C:2018:633, paragraph 56).

(31)  Under Article 7a(4), the method chosen to express the amount of required energy savings should also be used to calculate the savings claimed by obligated parties.

(32)  See recital 17 EED and section 4.2.2.

(33)  Article 2(24) defines ‘energy service provider’ as a natural or legal person who delivers energy services or other energy efficiency improvement measures in a final customer's facility or premises.

(34)  See section 8 and examples in Appendix XII.

(35)  See Appendix XII.

(36)  SWD(2016) 402 final, pp. 46 and 47.

(37)  See Annex I, part 3.2, point v to the Governance Regulation.

(38)  See Appendix XII.

(39)  See Appendix III.

(40)  An ‘entrusted party’ is a legal entity with delegated power from a government or other public body to develop, manage or operate a financing scheme on its behalf.

(41)  Judgment in Case C-561/16 Saras Energía (ECLI:EU:C:2018:633, paragraph 37 on Articles 7 and 20 EED).

(42)  See also judgment of the Court in Case C-561/16 Saras Energía (ECLI:EU:C:2018:633, paragraphs 30-33).

(43)  Appendix III.

(44)  Appendix III.

(45)  Regulation (EU) 2017/1369 of the European Parliament and of the Council of 4 July 2017 setting a framework for energy labelling and repealing Directive 2010/30/EU (OJ L 198, 28.7.2017, p. 1).

(46)  Appendix III.

(47)  Appendix III.

(48)  Appendix XII.

(49)  Appendix X.

(50)  See Appendix IV.

(51)  See Appendix IV.

(52)  See Appendix IV.

(53)  Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity (OJ L 283, 31.10.2003, p. 51).

(54)  Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ L 347, 11.12.2006, p. 1).

(55)  See Appendix IV.

(56)  Appendix V.

(57)  Member States should assess in their NECPs the number of households in energy poverty, taking into account the necessary domestic energy services needed to guarantee basic standards of living in the relevant national context, existing social policy and other relevant policies, and Commission indicative guidance on relevant indicators, including geographical dispersion, that are based on a common approach for energy poverty. If a Member State finds that it has a significant number of households in energy poverty, it should include in its plan a national indicative objective to reduce energy poverty.

(58)  Directive 2010/31/EU of the European Parliament and of the Council of 19 May 2010 on the energy performance of buildings (OJ L 153, 18.6.2010, p. 13).

(59)  Recital 11 of Directive (EU) 2018/844 of the European Parliament and of the Council (OJ L 156, 19.6.2018, p. 75), which amends the EPBD and the EED, provides that ‘[t]he need to alleviate energy poverty should be taken into account, in accordance with criteria defined by the Member States. While outlining national actions that contribute to the alleviation of energy poverty in their renovation strategies, the Member States have the right to establish what they consider to be relevant actions’.

(60)  https://www.energypoverty.eu/policies-measures

(61)  See Appendices II and III.

(62)  Article 2(9) EPBD defines ‘building element’ as a technical buildings system or an element of the building envelope.

(63)  Directive 2014/94/EU of the European Parliament and of the Council of 22 October 2014 on the deployment of alternative fuels infrastructure (OJ L 307, 28.10.2014, p. 1).

(64)  See Economidou et al., 2018. Assessment of the Second National Energy Efficiency Action Plans under the Energy Efficiency Directive. EUR 29272 EN, Publications Office of the European Union, Luxembourg, 2018, ISBN 978-92-79-87946-3, doi:10.2760/780472, JRC110304 (report available at https://ec.europa.eu/jrc/en/publication/eur-scientific-and-technical-research-reports/assessment-second-national-energy-efficiency-action-plans-under-energy-efficiency-directive) and Tsemekidi-Tzeiranaki et al., 2019. Analysis of the Annual Reports 2019 under the Energy Efficiency Directive. EUR 29667 EN, Publications.

(65)  Appendix VII.

(66)  Regulation (EC) No 443/2009 of the European Parliament and of the Council of 23 April 2009 setting emission performance standards for new passenger cars as part of the Community's integrated approach to reduce CO2 emissions from light-duty vehicles (OJ L 140, 5.6.2009, p. 1).

(67)  Regulation (EU) No 510/2011 of the European Parliament and of the Council of 11 May 2011 setting emission performance standards for new light commercial vehicles as part of the Union's integrated approach to reduce CO2 emissions from light-duty vehicles (OJ L 145, 31.5.2011, p. 1).

(68)  Regulation (EU) 2019/631 of the European Parliament and of the Council of 17 April 2019 setting CO2 emission performance standards for new passenger cars and for new light commercial vehicles, and repealing Regulations (EC) No 443/2009 and (EU) No 510/2011 (OJ L 111, 25.4.2019, p. 13).

(69)   ‘Directive of the European Parliament and of the Council amending Directive 2009/33/EC on the promotion of clean and energy-efficient road transport vehicles’. Not yet be published in the Official Journal.

(70)  For further information, see JRC's Water — Energy Nexus in Europe, 2019, http://publications.jrc.ec.europa.eu/repository/handle/JRC115853

(71)  See recital 22.

(72)  See recital 22.

(73)  For further information, see the IEA's World Energy Outlook 2018; https://www.iea.org/weo/water/

(74)  See recital 22.

(75)  See definitions provided in section 4.

(76)  See Appendix IV.

(77)  SWD(2013) 451 final, recitals 47 and 49-52.

(78)  SWD(2013) 451 final, recital 53.

(79)  SWD(2013) 451 final, recital 54.

(80)  SWD(2013) 451 final, recital 55.

(81)  Lees, E., and Bayer, E. (February 2016), Toolkit for energy efficiency obligations (Regulatory Assistance Project); http://www.raponline.org/document/download/id/8029

(82)  Energy performance of buildings — Economic evaluation procedure for energy systems in buildings — Part 1: Calculation procedures; https://www.en-standard.eu/din-en-15459-1-energy-performance-of-buildings-economic-evaluation-procedure-for-energy-systems-in-buildings-part-1-calculation-procedures-module-m1-14/

(83)  See also Appendix VI and Appendix VIII.

(84)  For further explanations and examples, see Appendix VIII.

(85)  For further explanations and examples, see Appendix VIII.

(86)  See also Appendix VIII.

(87)  Article 7(1) EPBD provides that ‘Member States shall take the necessary measures to ensure that when buildings undergo major renovation, the energy performance of the building or the renovated part thereof is upgraded in order to meet minimum energy performance requirements set in accordance with Article 4 in so far as this is technically, functionally and economically feasible’.

Article 2(10) EPBD defines ‘major renovation’ as the renovation of a building where:

(a)	the total cost of the renovation relating to the building envelope or the technical building systems is higher than 25 % of the value of the building, excluding the value of the land upon which the building is situated; or

(b)	more than 25 % of the surface of the building envelope undergoes renovation.

Member States may choose to apply option (a) or option (b).

(88)  See recital 41 EED.

(89)  See recital 41 EED.

(90)  Directive 2009/125/EC of the European Parliament and of the Council of 21 October 2009 establishing a framework for the setting of ecodesign requirements for energy-related products (OJ L 285, 31.10.2009, p. 10).

(91)  For regulations listed by category of product, see:

https://ec.europa.eu/info/energy-climate-change-environment/standards-tools-and-labels/products-labelling-rules-and-requirements/energy-label-and-ecodesign/energy-efficient-products_en

(92)  For criteria to show materiality in NEEAPs and Article 7 notifications, see Appendix IX.

(93)  Regulation (EU) 2018/842 of the European Parliament and of the Council of 30 May 2018 on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement and amending Regulation (EU) No 525/2013 (OJ L 156, 19.6.2018, p. 26).

(94)  See Appendix XII.

(95)  A legal instrument issued by an authorising body guaranteeing that a specified amount of energy savings has been achieved. Each certificate is a unique and traceable commodity carrying a property right over a certain amount of additional energy savings and guaranteeing that the benefit of those savings has not been accounted for elsewhere.

(96)  For measures promoting the installation of small-scale renewable energy technologies on or in buildings, see Appendix X.

(97)  See Appendix X.

(98)  See Appendix VII.

(99)  Recital 15 EED.

(100)  See Appendix VII.

(101)  See Appendix XII.

(102)  Under the second subparagraph of Article 59 of the Governance Regulation, Article 24(1) is deleted as from 1 January 2021.

(103)  This was due by 31 December 2018 (Article 9(1) of the Governance Regulation).

(104)  For further proposals on elasticities to be used to capture the responsiveness of demand, see Appendix IV.