EUROPEAN COMMISSION Brussels, 14.7.2021 SWD(2021) 625 final COMMISSION STAFF WORKING DOCUMENT



EVALUATION

EVALUATION OF DIRECTIVE 2012/27/EU ON ENERGY EFFICIENCY Accompanying the Proposal for a Directive of the European Parliament and of the Council

on energy efficiency (recast) {COM(2021) 558 final} - {SEC(2021) 558 final} - {SWD(2021) 623 final} - {SWD(2021) 624 final} - {SWD(2021) 626 final} - {SWD(2021) 627 final}



Table of contents 1.Introduction 1.1. Purpose and scope of the evaluation 2.Background to the intervention 2.1. Description of the policy intervention and its objectives 2.2. Baseline 2.2.1. Problems at the time of the adoption of the EED 2.2.2. How would the situation evolve without the EED in place 3.Implementation of the EED / state of Play 3.1. Description of the current situation 3.2. Status of transposition and infringements 4.Method 4.1. Short description of methodology 4.2. Data collection and tools 4.3. Limitations and robustness of findings 5.Analysis and answers to the evaluation questions 5.1. Effectiveness 5.1.1. Evaluation Question 1: To what extent has the objective of the EED to promote energy efficiency in the EU in view of reaching the Union’s headline targets on energy efficiency for 2020 and 2030 been achieved? 5.1.1.1. Sub-question a: What have been impacts in different sectors achieved with the intervention?

5.1.1.2. Sub-question b: To what extent are the EU and the Member States on track to achieve their 2020 and 2030 targets? 5.1.1.3. Sub-question c: Did the EED have other positive or negative impacts beyond its main objective, such as reducing greenhouse gas (GHG) emissions and energy imports. 5.1.2. Evaluation question 2: To what extent can the observed effects be credited to the EED? In what areas was the intervention more / less successful and what were the drivers/ impeding factors behind successes / failures? 5.1.3. Evaluation question 3: What external factors have affected / continue to affect reaching the objectives of the EED? 5.2. Efficiency 5.2.1. Evaluation question 4: To what extent the costs involved in the implementation of the EED have been justified given the changes/effects that have been achieved (including wider benefits)? To what extent were the costs borne by different stakeholder groups proportionate to the benefits it has generated? 5.2.2. Evaluation question 5: To what extent were the scale of costs and administrative burden borne by different stakeholder groups proportionate to the benefits it has generated? 5.2.3. Evaluation question 6: What were the factors that influenced the efficiency of policy intervention and the implementation of the EED? 5.2.4. Evaluation question 7: Are there significant differences in costs (or benefits) amongst Member States, and if yes, what is causing them? How do these differences link to the intervention? 5.3. Relevance 5.1.8. Evaluation question 8: Did the Directive provide the right framework to reach the 20% energy efficiency target? To what extent is the EED framework still relevant in promoting energy efficiency in the EU? 5.1.9. Evaluation question 9: How well do the original objectives for promoting energy efficiency (including its role in achieving GHG emission reduction objectives) to ensure the achievement of the EU headline 2020 and 2030 targets still correspond to the needs and the latest technological or environmental developments in the EU, in particular in the context of the European Green Deal? 5.1.10. Evaluation question 10: How relevant is the EU intervention to EU citizens? 5.4. Coherence 5.1.11. Evaluation question 11: To what extent is the EED internally coherent? To what extent are the different articles and provisions of the EED working together coherently to achieve the overarching objective if the EED? 5.1.12. Evaluation question 12: To what extent is the EED coherent with other EU interventions on energy efficiency? 5.1.13. Evaluation question 13: To what extent is the EED coherent with other EU interventions in a wider energy and climate domain? 5.5. EU added value 5.1.14. Evaluation question 14: What is the additional value resulting from the EU intervention(s) having an EU level target and EU measures, compared to what would be achieved by Member States acting at national level without EU intervention? 5.1.15. Evaluation question 15: What would be the most likely consequences of stopping or withdrawing the EED?

5.1.16. Evaluation question 16: Are there any parts of the EED that are obsolete? 6.Conclusions Annex 1: Procedural information Annex 2: Stakeholder consultation Annex 3: Methods and analytical models Annex 4: Figures and Tables Glossary Term or acronym Meaning or definition AR Energy Efficiency Annual Reports under the EED CA EED Concerted Action of the Energy Efficiency Directive CBA Cost-benefit analysis CHAP Central registry for complaints and enquiries CHP Combined heat and power generation, or cogeneration Commission European Commission, unless specified otherwise CTP Climate Target Plan Directive Energy Efficiency Directive, unless specified otherwise EE Energy efficiency EED Energy Efficiency Directive (2012/27/EU) EPBD Energy Performance of Buildings Directive (2010/31/EU) EEOS Energy efficiency Obligation Schemes EnPC Energy performance contracting ESCO Energy services company ESR Effort Sharing Regulation ESIF European Structural and Investment Funds ETS Emissions Trading System EU PDA EU Project Development Assistance FEC Final energy consumption GHG Greenhouse gas GPP Green public procurement HVAC Heating, ventilation and air conditioning H2020 Horizon 2020 IEM Internal Energy Market legislation ICT Information and Communication Technologies IRR Internal Rate of Return ktoe kilotonnes of oil equivalent MS Member State(s) Mtoe Million tonnes of oil equivalent M&V Monitoring and verification NAV Net Present Value NECP National Energy and Climate Plan NEEAP National Energy Efficiency Action Plan NZEB Nearly Zero Energy Building OPC Open public consultation PEC Primary energy consumption RES Renewable Energy REDII Renewable Energy Directive (2018/2001/EU) SME Small- and medium-sized enterprise SWD Staff Working Document TCO Total Costs of Ownership 1.Introduction Efficient use of energy is key to achieve the European Green Deal objectives. It allows cost-effective delivery of the EU’s current and future climate and clean energy ambitions and contributes to other EU policy objectives. Energy Efficiency First is a guiding principle of EU energy policy, and is highlighted in the European Green Deal as a key means to decarbonise the energy system by 2050. The EU has set headline targets to increase energy efficiency by 20% for 2020 and by at least 32.5% for 2030. These targets are embedded in the Energy Efficiency Directive (EED) . The European Union has set the goal to decarbonise its economy by 2050. To this end, , the Commission has proposed in the Communication on the European Green Deal to increase the EU greenhouse gas emissions target to at least 50% and towards 55% in a responsible way by 2030. In this context, the Commission also announced that it would present an impact-assessed plan to increase the EU’s greenhouse gas emission reductions target for 2030 and committed to “review and propose to revise, where necessary, the relevant energy legislation by June 2021”, including Directive 2012/27/EU on energy efficiency (EED) . The Commission adopted the Climate Target Plan Communication on 17 September 2020, putting forward an emissions reduction target of at least 55% by 2030 as a balanced, realistic, and prudent pathway to climate neutrality by 2050. The Plan also highlights that, to achieve the 55% level of greenhouse gas emission reductions, there is a need to significantly step up energy efficiency efforts (to 36-37% for final and 39-41% for primary energy consumption) by 2030, from the current EU headline target of at least 32.5%. In this context, the Commission confirmed the need to revise the relevant climate and energy legislation, including the EED. In addition, on 17 September 2020, the Commission also published its assessment of the final National Energy and Climate Plans (NECPs) of the Member States. The assessment shows that Member States’ national contributions in these Plans do not add up to the existing 2030 headline EU energy efficiency target of 32.5% . The gap is equal to 2.8 percentage points for primary energy consumption and 3.1 percentage points for final energy consumption. In case the Member States’ contributions do not reach the required ambition level of 32.5%, the Commission may propose additional EU-wide measures in line with the Governance Regulation. Therefore, because of the Green Deal and the Climate Target Plan and the recognised role energy efficiency needs to have to achieve the 2050 decarbonisation objective, the process to review and revise the EED formally started in August 2020. This evaluation report concludes the review process of the EED. The report serves as input for the impact assessment of the EED revision. Chapter 1 introduces the EED and describes the purpose and the scope of the evaluation. Chapter 2 outlines the background of the policy intervention that the EED represents. It sets out the baseline of the EED and describes what would happen without the EED in place. Chapter 3 provides a short overview of the current situation, including the status of the transpositions by Member States and infringement procedures. Subsequently, Chapter 4 describes the method used for this evaluation and gives a brief overview of the stakeholder consultations. In Chapter 5, the actual evaluation takes place, based on the evaluation criteria of the better regulation guidelines. Chapter 6 summarises the concluding findings of this evaluation report. 1.1.Purpose and scope of the evaluation

The EED was adopted in 2012 to promote energy efficiency across the EU, and remove barriers and overcoming market failures that impede efficiency in energy supply and use in different sectors with a view to achieve the EU headline energy efficiency targets for 2020 and 2030. It was subject to a first, limited revision in 2018 as part of the Clean Energy for all Europeans package, which added the EU target for 2030, modified a few provisions and also included a requirement for a further review of the Directive every five years, and a possible upwards revision of that target. This evaluation covers the full scope of the EED, except for those elements already revised as part of the Clean Energy for all Europeans package. It assesses the implementation of the EED in all 28 Member States since its entry into force in 2012. This evaluation will consider whether the framework of the EED is fit to achieve its objectives of reaching the headline EU energy efficiency targets for 2020 and 2030 especially in the context of the higher climate target for 2030. In addition, the evaluation will examine whether the EED is fit to overcome remaining regulatory and non-regulatory barriers, and market failures, preventing energy efficiency to be fully part of the energy system. It will also assess whether there are shortcomings, gaps and weaknesses for the existing measures to deliver on their expected results. More specifically, as part of the general evaluation of the EED, the Commission has also assessed the following aspects (as required by Article 24(15)): (a) “Whether to adapt, after 2020, the requirements to renovate 3% of central government buildings to minimum standards and the alternative approach laid down in Article 5; (b) The need to adjust further the Union's energy efficiency policy in accordance with the objectives of the 2015 Paris Agreement on climate change following the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change and in the light of economic and innovation developments”. In addition, for example, this evaluation will assess the effectiveness of the implementation of the definition of small and medium-sized enterprises for the purposes of Article 8(4), and the provisions related to metering, billing and consumer information for natural gas, with the aim of aligning them, where appropriate, with the relevant provisions for electricity in Gas Directive 2009/73/EC. The evaluation of the EED will provide the basis for what needs to be streamlined and strengthened in order to a) address the remaining ambition gap to the existing 2030 target of 32,5% given that the national contributions in the final NECPs submitted by Member States do not add up to achieve, and b) deliver on the potential contribution of energy efficiency to a higher greenhouse emissions reduction target for 2030 [footnote to a communication]. Overall, the evaluation aims to assess the policy intervention in the Member States (EU-27) based on the evaluation criteria: effectiveness, efficiency, relevance, coherence and EU added value, in line with the Better Regulation guidelines. The findings and recommendations of the evaluation will feed into the impact assessment for the further amendments of the EED. 2.Background to the intervention 2.1.Description of the policy intervention and its objectives Energy efficiency was set as one of the priorities of the Europe Union's 2020 Strategy for smart, sustainable and inclusive growth , put forward by the Commission in 2010. It is also one of the key pillars of the 2030 EU Climate and Energy framework and the Energy Union. This framework aims at improving the security of energy supply, implementing the internal energy market, putting energy efficiency first, decarbonisation (including renewable energy development), research, development and facilitating technological innovation and improving competitiveness. Directive 2012/27/EU on Energy Efficiency (EED) builds on Directive 2006/32/EC on energy end-use efficiency and energy services. It establishes a common framework of measures for the promotion of energy efficiency within the EU, in view of achieving the Union’s headline targets on energy efficiency of 20% for 2020 and of at least 32.5% for 2030, and paves the way for further energy efficiency improvements beyond that date. The EED was published in the Official Journal on 14 November 2012 and entered into force on 4 December 2012. Member States had to transpose the EED by 5 June 2014. The EED is part of the broader EU energy efficiency policy framework, which comprises other key instruments including the Energy Performance of Buildings Directive (2010/31/EU, as amended by Directive 2018/844/EU) (EPBD), the Energy Labelling Framework Regulation ((EU) 2017/1369) and Ecodesign Directive (2009/125/EC). The EED is interlinked with other energy and climate policy areas, notably, the ETS and non-ETS, and security of supply and internal energy market. Overall, the set of measures are aimed to step up Member States’ efforts to use energy more efficiently at all stages of the energy chain, from the generation of energy and its distribution to its final use. The measures are summarised below (see Table 7 in Annex 4 for a more detailed overview): Article Objective Articles 1& 3 To set the EU headline energy efficiency targets for 2020 (of 20%) and for 2030 (of 32.5%) and to set reporting obligations for Member states Article 4 Member States had to establish long term renovation strategies for mobilising investment in the renovation of national building stock (until this article was moved to the EPBD in 2018) Article 5 To require Member States to renovate 3% of their central government buildings of over 250 m² Article 6 To oblige Member States to purchase energy efficient products, buildings and vehicles Article 7 To oblige Member States to achieve new energy savings each year Article 8 To ensure that large companies perform an energy audit every 4 years Articles 9 to 11 To provide requirements for metering and billing of energy use Article 12 To encourage Member States to promote and facilitate behavioural change towards energy efficiency Article 13 To make sure Member States implement penalties for breaching transposed energy efficiency policy Article 14 To oblige Member states to carry out comprehensive assessments of the potential for efficient heating and cooling Article 15 To require Member States to take energy efficiency into account in energy transformation, transmission and distribution Article 16 To require availability of qualification and accreditation schemes for providers of energy services, energy audits and installers Article 17 To require Member States to disseminate information on available energy efficiency mechanisms and financial and legal frameworks to market actors Article 18 To require Member States to promote the energy services market, including through the use energy performance contracting Article 19 To require Member States to remove regulatory and non-regulatory barriers to energy efficiency including split incentives Article 20 To ensure that Member States facilitate the establishment of financing facilities for energy efficiency Article 21 Refers to conversion factors set out in Annex IV of the Directive Article 24 Reporting obligations for the Member States and the Commission A partial review of the EED was carried out in 2018 as part of the Clean Energy for all Europeans package. In this context, the Commission proposed a binding EU energy efficiency target of 30% for 2030 and a number of focused amendments to selected elements of the EED (and of the EPBD) to align the energy efficiency framework to the 2030 perspective. The package also included a proposal for a Regulation on an integrated climate and energy Governance framework to facilitate the achievement of the 2030 climate and energy targets through the streamlining of the existing reporting and planning obligations. The planning and reporting obligations contained in the EED were transferred to the Governance Regulation, which replaced the three-yearly national energy efficiency action plans with the integrated national energy and climate plans for a 10-year period (the first plans should have been submitted by end 2019). The provisions on long-term renovation strategies were moved to Directive 2010/31/EU, where they fit more coherently. The provisions were also strengthened to ensure that the long-term renovation strategies deliver the necessary progress towards the transformation of existing buildings. This process resulted in amending Directive EU/2018/2002, adopted on 11 December 2018, which includes amendments to Articles 1 and 3 on the headline energy efficiency targets (setting the EU headline energy efficiency target for 2030), and to Article 7 on extending the energy savings obligation to 2021-2030 period. It also strengthens the requirements for billing and metering in Articles 9-11 by adding new, more precise and specific provisions applicable for thermal energy (heating and cooling).

Moreover, a number of new review clauses were introduced in Article 24 of the EED (e.g. to review the implementation of the definition of small and medium size enterprises for the purposes of Article 8(4), and introducing the general review clause of the EED with the first review required by 28 February 2024). All modified provisions had to be transposed by Member States by 25 June 2020, but for the provisions on metering and billing, for which the transposition date was 25 October 2020. Subsequently, the Commission published a Recommendation on 25 September 2019 to support Member States in transposing the amended provisions of Article 7, 7a, 7b, 20 (6) and Annex V of the Directive. At the same time, the Commission published a Recommendation on the implementation of the new metering and billing provisions of the EED, and on the content of the comprehensive assessment of the potential for efficient heating and cooling under Article 14 of the Directive. It should be noted that the EED framework provides a great deal of flexibility to Member States on how the required measures are implemented (given that a number of provisions contain conditionalities and derogations) and allows taking into account the national context. In addition, the EED was amended to highlight the need to alleviate energy poverty and the interlinkages with other sectors, e.g. the Water-Energy-Nexus. The intervention logic of the EED and its articles is provided in Annex 4. In addition to the planning and reporting provisions moved the Governance Regulation specific provisions of the EED were also removed or modified by other legislative instruments, such as Articles 9-11 on metering and billing for electricity and Article 15(8) on demand response services to the Electricity Directive, and Article 4 on the long-term renovation strategies to Energy Performance of Buildings Directive by the amending Directive EU 2018/844. (in the context of the “Clean Energy for All Europeans” Package). Against this background, the Commission has not evaluated yet the EED in its entirety since its entry into force in December 2012 ( Figure 1 ). Source: DG ENER

2.2.Baseline In 2007, the EU committed itself to a 20% energy efficiency target in 2020, which was embedded in the Europa 2020 Strategy for smart, sustainable and inclusive growth in 2010. At that time, the energy efficiency framework consisted of Directive 2006/32/EC on energy services (ESD) and Directive 2004/8/EC on promotion of cogeneration (CHP Directive) and Directive 2002/91/EC on the energy performance of buildings (preceding the Directive 2010/31/EU. The ESD targeted energy demand and contained an indicative end-use energy savings target of 9% that had to be achieved by each Member State by 2016. Together, the ESD and CHP Directives were amongst the first legislative instruments to tackle the barriers to energy efficiency investments and could be regarded as milestones in energy efficiency policy development. They have contributed to action taken at national level thanks to introduction of a number of concrete policies. However, because of the 'soft' and open provisions, both Directives failed to sufficiently overcome the barriers to energy efficiency existing at that time. 2.2.1.Problems at the time of the adoption of the EED The problems and drivers that the EED was expected to address were identified in the impact assessment of 2011 (accompanying the Commission proposal for the EED). The main problem was that the EU 20% energy efficiency objective for 2020 would not have be met with the policies and measures in place at the time, thus preventing the related environmental, social, economic and security of supply benefits to be realised due to many prevailing market and regulatory failures. Based on the evaluation of the ESD and CHP Directive, the Commission concluded that both directives, if unchanged, would not lead to the sufficient action needed to tackle the problems described in the accompanying impact assessment. The impact assessment of 2011 outlined the following problem drivers: 1.Insufficient political commitment, policy coordination and long-term political planning to reduce investment insecurity; 2.Insufficient incentives for consumers to realise energy efficiency improvements and to tackle high upfront costs and the split incentives problem;

3.Insufficiently developed markets for energy efficiency improvements; 4.Insufficient price incentives for the uptake of energy efficiency measures among energy suppliers; 5.High transaction costs because of lengthy administrative procedures e.g. for cogeneration) or a high number of separate units (e.g. energy efficiency improvements in households); 6.Higher transaction costs and investment risk for the deployment of the co-generation technology; 7.Low awareness of energy saving opportunities and existence of cultural barriers like mistrust of new technologies and lack of willingness to adopt energy savings measures and a historic low penetration of district heating because of the prevalence of individual heating solutions. 2.2.2.How would the situation evolve without the EED in place The impact assessment of 2011 considered the scenario of taking no further legislative action for the ESD and the CHP Directive. However, according to the mid-term evaluation of the ESD, even if Member States had continued their efforts on energy savings beyond the ESD's target year of 2016, leaving the situation unchanged would lead to primary energy savings of 50-95 Mtoe in 2020, leaving a significant gap towards the 20% saving target (savings of 368 Mtoe). The progress report of the CHP Directive had also shown the Directive’s limited efficiency and effectiveness. The share of electricity from high efficiency CHP had increased only from 10.5% in 2004 to 11.0% in 2008. This showed that the lack of concrete obligations in the Directive regarding the real uptake of the CHP and its soft wording had failed to create the necessary investment security, to decrease the burden of the numerous administrative procedures and to create a playing level field for this technology and its operators. The impact assessment of 2011 analysed a number of policy options to address the problem and its drivers encompassing the following target areas: ·National targets and objectives; ·Energy Saving Obligations; ·Further measures to realise potential at the end-use stage; ·Measures to realise potential at the stage of energy transformation and distribution; ·National reporting; ·Options concerning the purpose and scope of the legislative proposal and the choice of legal instrument. In all six areas, the impact assessment showed that the baseline scenario (‘Retain the current approach’) had the worst impact compared to the proposed policy options in terms of effectiveness, efficiency, coherence with the overarching objectives of EU policy and respect of subsidiarity/proportionality. The impact assessment provided a qualitative description of the expected developments and confirmed that the package of policy measures put forward with the legal proposal was capable of reaching the 20% objective and reaping additional benefits that would remain tangible beyond 2020. The additional costs of achieving the overall 20% target through the set of measures proposed was estimated as proportionately small to the expected benefits. With the introduction of the EED, the Commission aimed at creating the right market conditions and legal framework to enable the achievement of the new headline EU 20% energy efficiency target for 2020, covering all end-use (residential, commercial and industry) and energy generation sectors with the exception of transport. 3.Implementation of the EED / state of Play 3.1.Description of the current situation

The EED entered into force in 2012, but builds on the measures already introduced in the ESD and CHP Directives. The EED requires different reporting obligations with different implementation deadlines. These obligations are described in Table 2 below: Key obligations 2013 – 2020 for Member States Deadline General transposition of the EED 5 June 2014 Notification of 2020 national indicative targets under Article 3 (in line with Article 24(1) and Annex XIV) 30 April 2013 Notification of long-term renovation strategies under Article 4 as part of the NEEAP 30 April 2014 and every three years thereafter Notification of inventory of government buildings subject to renovation under Article 5 5 December 2013 Notification of national cumulative energy savings and policy measures under Article 7 5 December 2013 Notification of National Energy Efficiency Action Plans 1st plan by 30 April 2014 and the 2nd in 2017 Notification of Annual Progress Reports Each year by 30 April Notification of comprehensive assessments on energy efficiency potential in heating and cooling under Article 14 December 2015, December 2020 Obligations under the revised EED Deadline Transposition of new rules on energy efficiency obligation schemes (Amended Articles 7, 7(a) and 7(b) and Annex V) 25 June 2020 Transposition of new rules on metering and billing (Articles 9, 10, 11 and a new Annex VII(a)) 25 October 2020 Submission of National Climate and Energy Plans including detailed plans on implementation of Article 7 in line with Annex III December 2019 The general transposition deadline of the EED was 5 June 2014. In line with Article 3 of the EED, Member States had to notify their national indicative energy efficiency targets by December 2013 in view of achieving the EU level target for 2020 (1483 Mtoe of primary energy consumption and 1086 Mtoe of final energy consumption). In line with Article 4 of the EED, Member States had to notify their first long-term strategy for mobilising investment in the renovation of the national stock of residential and commercial buildings, both public and private by 30 April 2014. An updated strategy was due every three years thereafter, submitted to the Commission as part of the National Energy Efficiency Action Plans. In addition, separate notifications were required under Article 5 (inventory of central government buildings that was subject to renovation under the default approach) and under Article 7 (energy savings obligation). Member States were required to notify by December 2013 their plans calculated cumulative energy savings for the period 2014-2020 and the policy measures: energy efficiency obligation schemes or alternative policy measures to be implemented to achieve the required amount by end 2020. Reporting obligations for the 2030 framework The national contributions to achieve the Union’s energy efficiency targets for 2030 referred to in the amended EED had to be notified by the end 2019 as part of National Energy and Climate Plans (NECPs) of the Governance Regulation. Although with some delays, all Member States notified their contributions in the course of 2020. However, not all Member States properly met the requirements related to the notification of the contributions and, in quite a few cases, the information about the trajectory, methodology used or translation of the contributions into absolute values of PEC and FEC was missing. Similarly, the notification on the energy savings requirements, planned measures and detailed methodologies to implement Article 7 for the next period 2021-2030 had to be notified under the Governance Regulation as part of the NECPs (Annex III). 3.2.Status of transposition and infringements The Commission monitors how the Energy Efficiency Directive is transposed and implemented and works closely with the Member States to this end. After the transposition deadline of the Directive 2012/27/EU (EED) of 5 June 2014, the Commission services carried out transposition checks to assess whether the EED had been properly transposed into the national legal orders of all Member States. As a result of this exercise, the Commission launched infringements for the cases where Member States failed to communicate transposition measures covering all provisions of the Directive. All of these infringements have been closed. Furthermore, in order to clarify certain questions regarding the transposition and implementation of the EED, in 2017 the Commission services launched a structured dialogue with Member States, via EU Pilot information requests. Following an assessment of replies from EU pilots, the Commission launched infringement proceedings between July 2018 and January 2019 under Article 258 of the Treaty on the Functioning of the European Union, against all Member States for their failure to comply with obligations under the Energy Efficiency Directive. In February 2021 the state of play of these infringements was as follows: -Thirteen cases have been closed (Denmark, Estonia, Finland, France, Ireland, Italy, Netherlands, Latvia, Luxembourg, Malta, Slovakia, Spain and Sweden); -Fifteen ongoing cases, at different stages.

The infringement proceedings progressed at different speed, but Member States’ clarifications and commitments have resolved a majority of the concerns the Commission raised. The following issues have been raised in most infringement proceedings: ·Renovation of public buildings under Article 5; ·Calculation of energy savings claimed from the implementation of alternative policy measures under Article 7(9); ·Energy audits under Article 8(4); ·Metering and billing rules under Articles 9 to 11; ·Individual metering (or “sub-metering”) of heat in multi-apartment buildings required under Article 9(3); and ·Comprehensive assessments and cost-benefit analysis for energy efficiency in heating and cooling under Article 14; Other significant points raised were the minimum requirements for establishing functioning of energy services markets under Article 18 of the EED, also demand response rules required under Article 15(8), and split of incentives under Article 19(1). Finally, there was an infringement case against Spain, originated from a complaint, which concerned the implementation of sub-metering obligations under Article 9(3) EED. The case was brought to the Court of Justice (C-347/19) and the judgement was delivered in December 2020. Transposition of the provisions of the amended Directive (EU) 2018/2002 Following the amendment of the EED in 2018, Member States had to transpose new rules on energy savings obligation (i.e. the new Articles 7, 7(a) and 7(b) and Annex V by 25 June 2020. In addition, by 25 October 2020, Member States had to transpose new rules on metering and billing (i. e., new Articles 9, 9(a), 9(b) and 9(c), 10 and 10(a) and 11 and 11(a) and a new Annex VII(a)). In the light of Member States notifications with respect to the transposition of those amended provisions, the Commission sent 23 letters of formal notice to the Member States that had notified partial transposition, to the Member States that had not notified any transposition measures and to the United Kingdom. 4.Method 4.1.Short description of methodology The Commission used several information sources to evaluate the EED, notably the analysis of the implementation and transposition of the EED in all Member States, national energy efficiency action plans and annual energy efficiency reports submitted by Member States, and various studies and reports available on the EED. The work carried out in the EED Concerted Action also proved to be very valuable. The Commission commissioned an external study to support it with data collection and the evidence-based assessment. The study was carried out during the period of June 2020 to March 2021. A dedicated smaller study was also carried out to support the analysis of the open public consultation (launched on 17 November 2020 until 9 February 2021). The evaluation was supported by an inter-service group consisting of the following Commission Directorates General: SG, ECFIN, GROW, JUST, CLIMA, MOVE, REGIO, ENV, AGRI, RTD, TRADE, CNECT, ESTAT, COMP, and also JRC and EASME. The inter-service group met five times between June 2020 and March 2021, and it provided feedback on the most relevant deliverables of the evaluation and its process. The evaluation followed the Commission better regulation guidelines and examined the following five evaluation criteria in line with better regulation guidelines: effectiveness, efficiency, relevance, coherence and EU added value, as described below. ·Effectiveness

The evaluation looked at the overall effectiveness of the EED and to what extent the objectives of promoting energy efficiency were achieved in view of reaching the Union’s headline targets on energy efficiency for 2020 and 2030, by analysing the quantitative and qualitative impacts (per target group and sectors). In addition, the evaluation looked at which factors were behind the effects of the intervention including which areas of the intervention were more / less successful and what were the drivers / barriers behind successes / failures, and what external factors have affected/ continue to affect reaching the objectives of the EED. ·Efficiency Efficiency refers to what extent the costs involved in the implementation of the EED have been justified given the changes/effects that have been achieved (including wider benefits), and to what extent were the costs borne by different stakeholder groups proportionate to the benefits it has generated. ·Relevance In relation to the relevance, the evaluation looks at the extent to which the EED framework and its measures are still relevant for promoting energy efficiency to ensure the achievement of the EU headline 2020 and 2030 targets. It assesses whether the EED still corresponds to the needs and the latest technological or environmental developments in the EU, and to what extent the EED is fit to achieve the higher climate target (of at least 55% for 2030), in particular in the context of the objectives of the European Green Deal. ·Coherence The evaluation examines whether the EED is internally coherent and whether it complements or conflicts with other existing policies and strategies, as well as new ones, particularly in the context of policies adopted and planned under the European Green Deal. ·EU Added value The evaluation looks at the additional value that the EU level energy efficiency target and EU measures have, compared to what would be achieved by Member States acting at national or regional levels without EU intervention. A detailed overview of the evaluation questions per criterion is provided in Annex 3. 4.2.Data collection and tools More in details, the following data collection tools were used in evaluating the EED: ·Analysis of the National Energy Efficiency Action Plans of 2014 and 2017 submitted in line with Article 24(2) and Member State annual energy efficiency reports submitted from 2014 to 2020 submitted in line with Article 24(1); ·Analysis of national measures notified by Member States to transpose the EED; ·Analysis of the final National Energy and Climate Plans submitted under the Governance Regulation; ·Analysis of the Long-Term Renovation Strategies submitted under Article 4 of the EED (2014 and 2017) as part pf the National Energy Efficiency Action Plans. ·Targeted stakeholder consultation with broad range of stakeholders identified in the Consultation strategy, including national authorities, interest groups, civil society and academia. The targeted stakeholder consultation was carried out in the form of stakeholder workshops, evaluation questionnaires and interviews with the aim to gather inputs on assessing the different provisions of the EED. In total nine workshops were held during the period from September to November 2020; ·A dedicated Energy Efficiency Directive Expert Group was held on 10 November 2020 with the aim to present and discuss with the Member States and stakeholders the preliminary findings of the evaluation with an aim to fine-tune the analysis; ·An internet based public consultation was launched on 17 November 2020 and lasted for 12 weeks until 9 February 2021, targeting a broad stakeholder audience and the general public ; ·Literature review of relevant documents, reports and studies to support the evaluation.

More details on the stakeholder consultation activities can be found in Annex 2 and the technical assistance study. 4.3.Limitations and robustness of findings Member States’ annual reports The last Commission progress report was published in October 2020 and covers the 2018 data based on Member States’ annual reports submitted in 2020. Even though the full assessment on the achievement of the 2020 targets and thus the complete overview of implementation of the EED would be available only in the spring 2022, when Eurostat will be publishing the 2020 data, the latest Commission progress report gives indications on progress towards the achievement of the EU energy efficiency target and national indicative targets. It includes quantitative and qualitative information on the implementation of some of the key provisions of the EED that contain annual reporting obligations: Article 3 on national energy efficiency targets, Article 5 on exemplary role of public bodies’ buildings and Article 7 on energy savings obligation. Availability of data It should be stressed that quantification of the impacts attributed to the EED intervention taking into other energy efficiency interventions and contributing to the EU targets is challenging. There is limited data available on ex-post evaluation of national energy efficiency measures, including, data on costs and benefits for most of the measures. The most complete information on energy savings and costs is available for measures implemented under Article 7 for which the EED sets specific reporting and monitoring requirements. Therefore, major limitations were related to assessing the effectiveness of the EED on basis of decomposition analysis by attributing specific benefits and quantified impacts (energy savings, contribution to energy efficiency targets, etc.) to individual EED measures or articles. The gaps in quantification of impacts have been filled by input received from stakeholders (targeted consultations and open public consultation). 5.Analysis and answers to the evaluation questions 5.1.Effectiveness 5.1.1.Evaluation Question 1: To what extent has the objective of the EED to promote energy efficiency in the EU in view of reaching the Union’s headline targets on energy efficiency for 2020 and 2030 been achieved? As reflected in the intervention logic, the EED consists of a set of common measures that aim at promoting energy efficiency in the EU across the different sectors with a view to achieve the EU energy efficiency targets for 2020 and for 2030. The achievement of the EU energy efficiency targets depends not only on the implementation of the measures in the EED, but also on other EU legislative acts such as the Energy Performance of Buildings Directive, the Ecodesign Directive, the Energy Labelling and Tyre Labelling Regulations, and other measures taken at national level. Therefore, the EED is not the only instrument contributing to the EU energy efficiency targets, and the evaluation of its effectiveness in contributing to achieving the targets also needs to take into account external factors that are not always linked to the implementation of the EED. The majority of stakeholders that shared their views consider that the Directive has largely achieved its objectives, thanks to the wide sectoral coverage of the Directive, as if it were to be a framework Directive. They shared the view that the EED contributed to improved energy efficiency, reduction of GHG emissions, and numerous other benefits such as improved energy security, reduced energy bills for consumers and greater awareness of the benefits associated with energy efficiency (e.g. health improvements, energy poverty alleviation). 5.1.1.1.Sub-question a: What have been impacts in different sectors achieved with the intervention? The developments in sectors are quite different when looking at energy consumption trends. This is related to the fact that different factors drive energy consumption in different sectors. Besides, policy instruments also do not focus on all sectors in the same manner. It should be noted that there is no exact data available on what impact specific measures of the EED had on the different sectors, except for Article 5 and Article 7 for which the EED has specific reporting requirements. The final industry energy consumption in the EU-28 decreased in absolute terms from 332 Mtoe in 2005 to 285 Mtoe in 2018 (-14%). After 2015 an increase in consumption can be observed again, though. Compared to 2017, the EU’s final industry energy consumption increased by 0.8% in 2018. The final energy consumption in residential sector (calculated using the old energy balances methodology) sharply fell by 10.4% from 310 Mtoe in 2005 to 278 Mtoe in 2018 (but only by 4.6% when applying the weather correction). However, energy use rose by 0.1% between 2015 and 2018 (with a -1.6% year-on-year fall in 2018). In 2018, higher energy consumption was mainly observed in the transport (+1.3% year-over-year increase compared to 2017) and industry sectors (+0.6%). By contrast, energy consumption declined in the residential sector (-1.6%) and in the services sector (-1.4%). The services sector recorded a small increase in energy consumption (calculated using the old energy balances methodology) between 2005 and 2018 (+1.5%). However, a year-on-year drop in energy consumption of 1.4% was recorded in 2018. The EU’s final transport energy consumption increased by 3.6% from 368 Mtoe in 2005 to 381 Mtoe in 2018. The growing trend accelerated in recent years and compared to 2017 the energy consumption rose by 1%. As regards the impact of specific energy efficiency policies on energy sectors, the EED requirements targets both the supply and end use sectors. As mentioned above, most of the data is available for measures implemented under Article 5 (exemplary role of public bodies’ buildings) and Article 7 (energy savings obligation) received from Member States in their annual reports. Most of the energy savings have been achieved in the buildings sector thanks to the measures under Article 5 and Article 7 aiming at renovations or upgrading of heating systems (some 50% of energy savings are achieved in buildings sector).

However, other sectors also observe positive effects which could be attributed to some extent to the EED. For example, the requirement for large companies to carry out energy audits (in Article 8) have increased awareness amongst enterprises of energy savings potential, which in some cases followed by energy efficiency improvement measures. However, there is not much information on the extent Article 8 had contributed to energy efficiency impacts in industry (more analysis in chapter 5.1.2). 5.1.1.2.Sub-question b: To what extent are the EU and the Member States on track to achieve their 2020 and 2030 targets? According to the latest Commission progress report on the achievement of the EU-28 energy efficiency targets for 2020, the Eurostat figures for 2018 indicate that final energy consumption in the EU-28 fell by 5.9%, from 1194 Millions of tons of oil equivalent (Mtoe) in 2005 to 1124 Mtoe in 2018. However, this is still 3.5% above the 2020 final energy consumption target of 1086 Mtoe. In 2018, it increased by 0.1% compared to the previous year. Primary energy consumption in the EU-28 dropped by 9.8%, from 1721 Mtoe in 2005 to 1552 Mtoe in 2018, which is 4.6% above the 2020 target of 1483 Mtoe. Following three years of increase, a year-on-year drop in primary energy consumption of 0.6 % was recorded in 2018. For both indicators, the trend in 2018 was above a linear trajectory to the 2020 targets. It should be noted that the achievement of the EU level target is influenced by a set of different factors, which are described in more detail below (see chapter 5.1.2). The growth in economic activity continues to be one of the main factors contributing to the increased energy consumption. Policies and measures implemented by the Member States in 2018 were not sufficient to offset it. To this end, it seems increasingly unlikely that the 2020 targets could be reached without a strong impact of external factors, such as the COVID-19 crisis. The impact of COVID-19 on energy consumption in 2020 has been assessed as significant in the above mentioned progress report. Member States indicated in their annual energy efficiency reports that stable and growing final energy consumption in 2018 was driven by economic growth and an increase in: (i) production/ value added (industry); (ii) transport of passengers and goods (transport); (iii) the number of households and disposable income (residential); and (iv) value added and employment (services). Source: Eurostat data, DG ENER’s own calculations The Commission monitors progress towards the achievement of the national 2020 energy efficiency targets and the implementation of the EED in line with the reporting obligation under Article 24(3). The Commission assessment is based on energy efficiency annual reports submitted by Member States, in line with Article 24(1)). The achievement of the EU targets also depends on the commitment made by Member States in setting the national indicative targets (in line with Article 3 of the EED). The recent analysis shows a gap to the EU 2020 targets (see Table 8 in Annex 4). In response to the growing energy consumption trends, the Commission had set up the dedicated Task Force 2020 to mobilise efforts to reach the EU energy efficiency targets for 2020, which looked into the causes of an increased energy consumption and looked for potential solutions for remedy. The incomplete and sometimes delayed implementation of the energy efficiency legislation (including the EED) together with the observed difference in the estimated energy savings and the energy savings achieved were mentioned by Member States as one of the possible causes that have contributed to the increased energy consumption over the recent years, which have put the achievement of the EU energy efficiency target for 2020 at risk. In relation to the EU 2030 targets, the assessment of the national energy and climate plans (NECPs) identifies a collective ambition gap of national contributions of 2.8 percentage points for primary and 3.1 percentage points for final energy consumption. Due to the insufficient progress towards the 2020 targets until 2018, the distance to the 2030 targets is also bigger than expected and stands at 22% for primary energy consumption and 17% for final energy consumption ( Figure 3 ). The delivery gap to the 2020 targets and the ambition gap to the 2030 targets indicate that additional efforts are needed. The 2020 progress report also showed that progress towards achieving the indicative national energy efficiency targets (assuming a linear trajectory that is the same level of efforts each year) was insufficient in twelve countries (Belgium, Bulgaria, Denmark, Germany, Ireland, Spain, France, Cyprus, Austria, the Netherlands, Poland, and Sweden) for primary energy consumption, and in fifteen (Belgium, Bulgaria, Germany, Estonia, Ireland, France, Lithuania, Luxembourg, Hungary, Malta, Austria, Poland, Slovakia, Sweden and the United Kingdom) for final energy consumption. JRC analysis shows that several Member States have updated their national targets (notified in the annual reports) which gives the sum of national 2020 absolute consumption targets of 1536.8 Mtoe in terms of primary energy and 1090.4 Mtoe in terms of final energy (which is 0.4% above of the EU target compared to 1086 Mtoe). In addition, the sum of the indicative national targets for primary energy is 3.6% above the EU target (1483 Mtoe) and corresponds to 17.1% savings (instead of 20%) compared to the PRIMES baseline projections.

5.1.1.3.Sub-question c: Did the EED have other positive or negative impacts beyond its main objective, such as reducing greenhouse gas (GHG) emissions and energy imports. Energy efficiency delivers a number of benefits further to improvements in energy efficiency and energy savings. Notably energy efficiency and the EED have contributed to the reduction of GHG emissions, both in terms of direct emissions from fossil fuel combustion or consumption and indirect emissions reduction from electricity generation. Overall, energy efficiency plays an important role in tackling climate change, with the EED being one of the key instruments contributing to the EU GHG emissions reduction targets. It The CO₂ emissions reduction is depicted for all energy efficiency policies as the precise effect of the EED on GHG emissions cannot be accurately quantified. Table 10 in Annex 4 presents the total GHG emission reduction generated by energy efficiency policies including the EED which points to a positive effect of energy efficiency policies in terms of their contribution to GHG emissions reduction. As regards specific sectors, similar conclusions can be drawn as those presented in the section on energy consumption trends). More specifically, the analysis indicates that the estimated reductions in CO₂ emissions in the building sector can be attributed to a large extent to the implementation of measures under Article 7. On the other hand, the largest part of the estimated reductions of CO₂ emissions in the transport sector and industry could be attributed to other measures not reported under Article 7. The detailed results of the analysis of GHG emissions reduction by sector are presented in the support study (Appendix E). Based on Eurostat data, the decrease of primary energy production in the EU28 over the past decades was accompanied by an increase in the imports of primary energy and energy products. More than half (55.6 %) of the EU28’s gross available energy in 2018 came from imported sources. However as illustrated in the section below, without energy efficiency measures energy demand would be much higher and would also have to be met with additional energy imports. Consequently, a reduction of energy consumption, which was to a large extent a result of the EED measures, also contributed to a moderation of the energy products import needs. Energy efficiency thus remains a key contributor to energy security. A 2019 Eurobarometer survey shows that 9 out of 10 EU citizens agree that the EU’s energy policy priorities should aim to ensure secure, clean, and affordable energy for all Europeans. In addition, analysis shows the wider socio-economic benefits such as reduced energy bills, reduced energy poverty and improved health that are associated to the energy efficiency improvement measures. However, it is challenging to quantify those benefits in relation to the implementation of the EED. A more detailed analysis on benefits is provided in chapter 5.2.1 on efficiency. 5.1.2.Evaluation question 2: To what extent can the observed effects be credited to the EED? In what areas was the intervention more / less successful and what were the drivers/ impeding factors behind successes / failures? The analysis from the evaluation study shows that overall the EED has contributed to promoting energy efficiency in the EU and to the achievement of the EU 2020 energy efficiency targets. The majority of stakeholders agree that the EED contributed to the increased awareness of energy efficiency and its role to decarbonisation objectives, also the EED led to greater access to energy efficiency funding and uptake of energy services market. As regards the negative effects, a significant number of stakeholders held the view that the obligations under the EED complicated further the existing rules at national level or led to rather diverging implementation across Member States. To better understand the impacts associated to the implementation of the EED, the decomposition analysis was performed to obtain the difference between the counterfactual scenario and the observed energy consumption by type of measure contributing to energy efficiency. Data on different energy efficiency measures and estimated energy savings was used from the MURE database and other studies. A top-down modelling approach taking into account energy statistics and macroeconomic drivers (i.e. energy intensity of GDP) was applied to estimate the counterfactual scenario to assess the impact of energy efficiency policies for the period 2014-2018. The main conclusions are as follows: ‒The counterfactual scenario used for estimating total energy savings from policy measures over the period 2014-2018 indicates that energy efficiency policies (not limiting only to the EED) have had significant energy consumption reductions over those reference years. ‒It could be concluded that Article 7 was responsible for the majority of savings delivered under the EED (see Figure 4 ). In addition, measures implemented under Article 7 have mostly contributed to energy savings in the buildings sector (households and services) and to a lesser extent in transport and industry sectors (see Figure 28 in Annex 4). Significant contribution of savings in buildings comes from energy efficiency obligation schemes, fiscal and financial incentives and the standards and norms (e.g. building codes). Source: Technical assessment study on evaluating the EED, COWI (2020) This is also reflected in the Commission’s annual energy efficiency progress report, which assessed the implementation of some of the key EED provisions.

The EED requires that Member States introduce national measures to fulfil the different obligations covering both the supply and demand sectors. Those energy efficiency improvement measures implemented at national level have contributed to the achievement EU energy efficiency target for 2020. To answer this question, to what extent the observed effects can be attributed to the EED intervention, the evaluation takes into account the assessment of specific articles having major impact as they have different objectives and target different stakeholder groups. ·Article 5 on exemplary role of public bodies buildings According to the data available, only 11 Member States chose to apply the default approach under Article 5(1), while 17 Member States chose to fulfil the renovation obligation via the alternative approach (Article 5(6)), through a set of measures such as renovations, energy management, information campaigns and behavioural change, etc., see Table 3 . These alternative measures should attain an equal amount of energy savings as under Article 5(1). Amongst those Member States that chose the default approach, only three Member States: Bulgaria, Lithuania and Luxemburg achieved their annual targets for renovated floor area (out of those that had available reports in 2020). Four countries (Spain, Italy, Luxembourg and Lithuania) fulfilled their total targets for the period 2014-2019. Among the Member States that implemented the alternative approach, only three countries (Austria, Poland and Slovakia) achieved their annual energy saving targets in 2019. Croatia and France achieved their targets for 2018. At the same time, six countries (Austria, Finland, Ireland, Slovakia, Poland and United Kingdom) provided data showing that they fulfilled their total target for 2014-2019. France, Belgium, Croatia and the Netherlands fulfilled their total target for the period 2014-2018. DEFAULT APPROACH ALTERNATIVE APPROACH Member States applying default / alternative approach 11 Member States Bulgaria, Estonia, Greece, Spain, Hungary, Italy, Lithuania, Luxembourg, Latvia, Romania, Slovenia 17 Member States Austria, Belgium, Cyprus, Czechia, Germany, Denmark, Finland, France, Croatia, Ireland, Malta, Netherlands, Poland, Portugal, Sweden, Slovakia, UK Member States achieving their targets for period 2014-2019 3 Member States Spain, Italy, Luxembourg, Lithuania achieved targets for 2014-2019 6 Member States Austria, Finland, Ireland, Slovakia, Poland, UK achieved targets for 2014-2019 4 Member States France, Belgium, Netherlands, Croatia achieved targets for 2014-2018 Source: Technical assistance study on evaluating the EED (2020) As can be seen from the analysis, the EED led to increased energy efficiency of central government buildings although the impact differs per country. Even though a substantial part of the energy savings under alternative approach was achieved through renovations, overall most of the savings were reached through other measures such as energy management, information campaigns and behavioural change. There are two limitations related to the current reporting requirements. First, the reporting requirements pose challenges that impair the effective monitoring of progress towards targets. Specifically, Article 5 does not include the requirement to report on energy savings delivered under the alternative approach. This makes difficult assessment of progress and the comparison of achievements of Member States that have chosen the alternative approach. Second, Article 5 does not require Member States that apply the alternative approach to develop an inventory of buildings (as required under the default approach) which would be essential for designing further measures. Another risk to the effectiveness of Article 5 is related to the possibility to fulfil the obligation by taking out of use of buildings by more intensive use of other buildings (Article 5 (4)), which may evolve further if not properly addressed. Following new ways of working established due to Covid-19 pandemic, some public bodies were looking into possibilities to reduce their number of buildings linked to more teleworking. This could lead to not having to undergo renovation of inefficient buildings that remain in use. The majority of stakeholders consider that Article 5 has contributed to making central government buildings in Member States more energy efficient. However, many stakeholders mentioned insufficient enforcement of regulatory measures and insufficient national budget as limiting factors of effective and efficient renovations of central government buildings (see Figure 5 ). Source: Feedback from public consultation A large number of stakeholders believe that further efforts would be necessary to ensure the achievement of the targets and obligations under Article 5 in all Member States, for example through extending renovation obligation to other public administration levels. In addition, stakeholders consider that insufficient progress was achieved at regional and local level due to the limitations of the legal framework - there is no obligation to renovate other buildings than those owned and occupied by central government, also lack of incentives, resources and technical assistance. In addition, alternative approach proved hard to monitor and led in many cases to short term energy savings. To address the issue, some stakeholders pointed out to the need for stricter requirements to the alternative approach. ·Article 6 on public purchasing Analysis shows that central governments are applying energy efficiency requirements in public procurement, albeit to the greater extent for products and to a lesser extent for services and buildings.

The application of high energy efficiency criteria goes hand in hand with the use of award criteria other than the lowest purchase price such as further energy-efficiency criteria or Total Costs of Ownership (TCO) where the energy costs over lifetime and optionally also costs related to impact on external environment have been assessed. However, the Single Market Scorecard for Public Procurement on award criteria indicates that a large share of public procurement is carried out with the price as the only award criteria. It also showed that in 2019, more than 60% of the procurement procedures in 16 Member States were awarded solely on the basis of the lowest price criterion. The scoreboard data still give an indication of a large amount of public institutions not using TCO as award criteria with the annual energy costs taken into account, or considering higher levels of energy efficiency as award criteria above the minimum requirements referred to in accompanying Annex III to Article 6, which shows that the intervention was less successful in this area. Article 6 was subject to a first evaluation in 2016. The evaluation concluded that it was too early at that stage to judge the achievement of the objectives of Article 6 (including achievements by central governments) given that the transposition deadline for the article was 5 June 2014 and there was insufficient time and experience in the Member States on implementing the requirements of Article 6. The evaluation further found that there was no data allowing the quantification of progress in the rate of public procurement applying energy efficiency criteria, which is due to the lack of clear reporting requirements in the legal basis. To this date, it remains a key limitation. Feedback received from public authorities show that due to the absence of systematic monitoring and reporting requirements in Article 6, there is no sufficient information on the impacts. In addition, studies and feedback received from stakeholders show that there are still some barriers to taking into account energy efficiency requirements into public procurement practices (complexity of procedures, legal and institutional barriers, higher initial costs of energy efficiency works, equipment, buildings, services, lack of resources and budget, knowledge and tools, time constraints), and a high proportion of tender procedures in the EU are awarded on the basis of the lowest price. The conditionalities in Article 6 also limit the effectiveness of the uptake of energy efficiency requirements as Member States can bypass them on grounds of cost-effectiveness, economic or technical feasibility, which was widely recognised by stakeholders in the public consultation feedback. The stakeholders’ feedback also revealed that regional and local public bodies are generally aware of the benefits of applying energy requirements in public purchasing, but very often they lack sufficient resources, tools, financing and skilled staff to apply them. To address these barriers, specific legislation, guidance and support tools are needed. The stakeholder feedback points out that legislation is one of the key factors incentivising the application of energy efficiency criteria in public procurement, but also support measures contribute to the application of energy efficiency criteria in public procurement such as awareness raising, training, guidance, financial resources etc. Nevertheless, some Member States have introduced the specific rules or guidance to require that energy efficiency criteria have been taken into account. For example, in Portugal the National Strategy for Ecological Public Procurement 2020 (ENCPE 2020) as a main objective includes environmental criteria in public contracts, aligned them with economic and social aspects. Thus, the Portuguese authorities expect that these criteria will be considered in public purchases. In Estonia, energy efficiency criteria are applied for instance when procuring IT equipment, such as laptops, computers and printers, and also for new buildings. Guidelines for public procurement are also integrated as part of Green Public Procurement National Action Plan in Malta that launched it in September 2019 which included guidelines for the application of energy efficiency criteria for different product categories. ·Article 7 on energy savings obligation Article 7 is a key provision of the EED estimated to contribute to the EU 2020 energy efficiency target by about half of expected energy savings stemming from the EED. This is also confirmed by stakeholders that view Article 7 as a central element contributing to the achievement of the EED objectives. Energy efficiency improvements have been largely achieved thanks to the measures introduced by Member States to achieve the energy savings obligations in end-use under Article 7 for the period 2014-2020 (see Table 13 in Annex 4). According to the latest energy efficiency progress report, Member States achieved by the end of 2018 about 55% (126 Mtoe) of the total sum of the cumulative end-use energy savings obligations for 2014-2020 (230 Mtoe), which overall is a positive indicator at EU level. However, the progress at national level varies. A more detailed overview of energy savings achieved per Member State is provided in Table 13 in Annex 4. The Commission forecasted the likelihood of achieving the required cumulative energy savings per Member State by 31 December 2020, the basic assumption is that all implemented policy measures continue delivering new annual savings in 2019 and 2020 as they did in 2018. The cumulative energy savings are then compared to the required energy savings by 31 December 2020 per Member State. The analysis did not consider potential concerns about eligibility and additionality. Besides, the possible impacts of the COVID-19 crisis on the amount of new annual savings achieved in 2020 are difficult to estimate at this stage. According to the analysis, six Member States (Bulgaria, Croatia, Czechia, Luxemburg, Portugal, and Romania) will very likely not achieve the required amount of energy savings by 31 December 2020, if they do not take additional actions. Another eight (Estonia, Germany, Greece, Hungary, Italy, Slovenia, Spain, Sweden) are unlikely to achieve the required amount of energy savings without additional actions taken. And the remaining fourteen Member States will likely or very likely achieve the required amount of cumulative energy savings. The majority of the savings are achieved by the energy efficiency obligation scheme (EEOS) currently implemented in 15 Member States which provides about 35% energy savings according to 2018 data reported by Member States. Other types of measures are financing schemes that contribute around 13% of the energy savings. Taxes on energy and CO2 taxes account for 16% of total achieved energy savings (see Figure 6 ). Source: DG ENER’s own calculations based on the 2020 national annual reports. On the sectors targeted by the implemented policy measures, the largest share of energy savings reported by Member States results from cross-cutting measures, which cannot be attributed to a single sector. Most of the measures (by count of reported measures) target services and industry, and the public sector (except for housing owned by public bodies, which is included in the private households sector (see Figure 7 ). In total 36 new measures were reported in 2020 annual reports (for the year 2018) under Article 7.

Source: DG ENER’s own calculations based on the 2020 national annual reports ·Article 8 on energy audits and energy management systems Literature review and feedback received from stakeholders reveal that Member States have established mandatory schemes for energy audits for non-SMEs, which have carried out the energy audits in line with requirements in Annex VI of the EED. Around 750,000 enterprises in the EU fall within the scope of these schemes, and the potential energy savings from these schemes are estimated to be approximately 7% of the total energy consumption of all enterprises. As regards the impact of the provisions aiming at SMEs, the Member States have implemented various schemes that include regulatory instruments, information based instruments, financial instruments and voluntary agreements. Almost 80% are related to information dissemination or financial or economic incentives. The EED does not contain any specific reporting obligation for Member States on the implementation and impact of Article 8, which poses difficulties to measure the effectiveness of this measure. In particular, the extent to which energy audits recommendations are followed up, which is not required under Article 8, and the extent to which these yield energy savings are not systematically monitored and analysed in the Member States. Furthermore, analysis retrieved only gives limited information about energy audits carried out by SMEs and households. Even though this information is not directly reported under Article 8, some indications of the types of programmes implemented and the magnitude of their impact for specific stakeholder groups is reported under Article 7 of the EED (e.g. voluntary agreements and white certificate schemes). For example, Member States’ annual energy efficiency reports reveal that overall 20 Mtoe cumulative energy savings have been achieved in the period 2014-2018 through the different programmes and schemes targeting different stakeholder groups having energy audits or energy management systems as an integral part. Evidence provided by then five Member States (Germany, Latvia, Romania, Slovakia and the United Kingdom) indicates that over the period 2014-2018, total cumulative energy savings of 1,686 ktoe were achieved from the measures implemented as a result of mandatory energy audits in large enterprises . The most detailed source of information on how audits have been implemented and their impacts available from Germany . In terms of the impact of the provisions of Article 8 on SMEs not much evidence on the implementation or the impacts is available in the literature. According to the findings of the dedicated study on the implementation of Article 8(4) on energy audits , Member States apply different approaches to support the implementation of energy audits in SMEs. Some examples point to voluntary approaches in line with Article 8(5), e.g. Finland, the Netherlands and the UK. In Germany, Austria and Croatia, SMEs are given tax reductions in return of conducting energy audits. In Denmark and Sweden, the approach has been to provide the SMEs with relevant information. On the other hand, for example, in Latvia it is mandatory that the undertakings with electricity consumption exceeding 500 GWh per year (most of them are SMEs) should carry out an energy audit and implement certain measures indicated in the energy audit (on which they need to report annually). In the Netherlands, large companies should also carry out certain energy efficiency measures with a payback period up to five years. The effectiveness of the provisions on SMEs was also addressed as part of the targeted stakeholder consultation. The 20 Member States that responded to the questionnaire mentioned some 36 different schemes targeting SMEs. Of these 40% are related to information activities and 35% are financial or economic schemes. Some stakeholders stated that the article has contributed to a higher uptake of energy audits and energy management systems in SMEs. Regarding awareness raising on energy audits in households, Member States have implemented a number of different measures including information activities or financial or economic incentives, which are implemented for the purposes of other articles of EED, e.g. Article 7, 9, 10, 12 and 17 and for the purposes of provisions in the EPBD. In conclusion, despite the positive impact observed due to Article 8, the analysis reveals the following limitations to reaping energy savings potential: ‒Lack of monitoring and reporting requirements for energy audits and on the measures implemented as a result of the energy audit; ‒Difficulties related to application of the SMEs definition (Article 8(4)); ‒Lack of requirements/ incentives for implementing energy management systems; ‒No requirements for enterprises to implement the energy saving opportunities identified in an energy audit; ‒Lack of energy auditors and low technical competence in some Member States. Feedback received in stakeholder consultation indicate significant support for energy audit obligation to be based on energy consumption. A large number of stakeholders also point out that the obligation should be accompanied by requirements to carry out certain measures identified in the audit, and that energy audits should include recommendations on use of renewable energy and resource efficiency.

More specifically in relation to the assessment of Article 8(4) in line with Article 24(12), a detailed assessment of the implementation of the non-SME definition has been carried out. This highlights the main difficulties encountered by Member States in implementing the Article 8(4) provision. In practical terms the main challenges relate to the difficulty of establishing connections between different SMEs, in particular cross-border ones, that might bring them within the scope of Article 8(4). From an economic perspective, it appears that the use of the current definition brings a proportion of enterprises within its scope for whom the economic costs of carrying out an energy audit are not justified by the potential energy savings. The assessment explores alternative definitions based upon energy use or cost or a mixture of size and energy use. It concludes that most alternatives offer a lower administrative burden, however in some cases these result in a significant shift in the types of enterprises within the scope – primarily covering more transport companies. ·Articles 9-11 on metering and billing Requirements on metering and billing contributed to achieving energy savings, thanks to the increased awareness of energy consumption patterns at an end-user level. However, certain gaps that impeded the full tapping of the energy savings were identified in the dedicated evaluation in 2016 and were subjected to revision in 2018. Examples of gaps and areas of improvement included the definition of the end user to complement that of the final customer, the availability of transparent heat cost allocation rules, the frequency of billing information to consumers, etc. The impact of the new provisions cannot be assessed at this stage as the transposition deadline was only 25 October 2020. Castellazzi and Zangheri, Serrenho & Bertoldi studied the impact of the provisions of these Articles and concluded that metering of energy consumption can contribute to reducing a household’s energy consumption in a range of 5 to 10%. The Empirica guidelines for sub-metering refer to a meta-study that found a median of 3% reduction in heating consumption when using basic consumption information services. They also refer to a pilot where a median of almost 6% reduction was found when using advanced consumption information services. Thus, it confirms the findings of the EED evaluation in 2016 that metering and billing have contributed to the achievement of the overall energy efficiency targets. ·Article 12 on consumer information and empowerment In terms of promoting consumer information and empowering programmes, the stakeholder consultation showed that Article 12 had a moderate effect in terms of empowering consumers and tackling energy poverty. Although Member States take many measures at national level to raise awareness and provide information to energy consumers, citizens, and energy stakeholders, there is no concrete data to allow for the measurement of their effectiveness and their contribution towards the overall achievements of the objectives of the EED as a whole. In addition, exchange of good practices and coordination between Member States and stakeholders is incidental due to the non-binding form of the Article. ·Article 14 on energy efficiency in heating and cooling Interim findings indicate that Article 14 helped increase the awareness of energy efficiency potentials in the heating and cooling sector in the Member States leading to implementation of energy efficiency measures. This is mainly due to the requirement to carry out a comprehensive assessment of the potential for efficient heating and cooling, in line with Article 14(1). Assessments of the high-efficiency cogeneration and efficient district heating potentials were performed in most Member States, and significant economic potential of high efficiency cogeneration and efficient district heating and cooling were identified in most cases. Important potential to reduce losses in existing heat networks were also identified by many Member States. However, in general, no or only very few heating and cooling policies and measures implemented in the Member States are directly linked to the comprehensive assessments. Stakeholders’ feedback largely confirm this finding. Analysis shows that almost all Member States have introduced policies in the heating and cooling sector either aimed at improving energy efficiency or increasing use of renewable energy and therefore also primary energy efficiency. However, most of the measures targeting heating and cooling at an end-use level have been introduced for the purposes of energy savings obligation in line with Article 7 (e.g. installation of more efficient heating systems at building level) or provisions under the Renewable Energy Directive. On the contrary, a vast majority of Member States have not identified new measures to realise the identified potential for high efficiency cogeneration and efficient district heating and cooling, in line with Article 14(2) and (4). An overview of the measures reported in the final NECPs submitted in 2019-2020 is presented in Table 14 in Annex 4. The requirements in Article 14 have to some extent contributed to promoting high efficiency cogeneration and efficient district heating and cooling, mainly as a result of the identification of potential in the comprehensive assessments, the cost-benefit analysis requirement in Article 14(5) and mandating public support exclusively to high efficiency cogeneration in line with Article 14(11). However, economic potential for cogeneration identified by Member States in 2011 has in most cases not been achieved. The situation differs among Member States. While in some, the construction of new cogeneration facilities is promoted and the share is growing, some Member States expect reduced capacity in cogeneration due to more difficult competitive situation in their national markets. In particular, the cost-benefit analysis requirement in line with Article 14(5) is lacking impact on increasing efficient supply of heating and cooling. There are several shortcomings influencing the overall effectives of this requirement. These analyses in practice focus mostly on power-only installations and are not applied to heat-only installations, thus preventing improvements e.g. in process heat generation. In addition, the analysis for potential utilization of waste heat is limited only to industrial installation, thus leaving a range of potential sources of waste heat from other business activities in the service sector. Moreover, the effectiveness of the link between the results of the analysis and authorization criteria in line with Article 14(7) is questionable, taking into account the overall awareness of this requirement is considered as low. In addition, the wide use of the existing exemptions to the requirement in line with Article 14(6) without justification reduces the overall effectiveness of the requirement. Finally, the requirement does not address the whole range of potential efficient heating technologies and solutions and therefore reduces the effectiveness in increasing primary energy efficiency of heat supply. As regards efficient district heating and cooling, despite being defined in the EED, it is addressed in Article 14 only to a limited extent, in particular by the requirements in Article 14(1) and (4). However in light of the abovementioned low impact of these provisions and taking into account the fact that NECPs do not foresee a significant expansion of (efficient) district heating and cooling in the period of 2021 to 2030 either, the effectiveness of Article 14 in increasing of the uptake of efficient district heating and cooling remains somewhat limited. Indirectly, Article 14 has contributed to the use of EU funds to upgrade district heating systems. For measures to promote high efficiency co-generation and reconstruction of district heating systems planned under the ERDF and CF funds for the period 2014-2019 were 5028 billion euro, total amount of funds decided during the same period were 2,153 billion euro. Despite its established scope of heating and cooling, the overwhelming majority of provisions in Article 14 address solely heating supply without addressing cooling. Although heating currently represents a much larger share of energy consumption than cooling, energy consumption associated with cooling is steadily increasing. Despite its increasing importance, only a minority of Member States address cooling wzith specific policy measures. A comprehensive framework for addressing cooling is missing in Article 14 and the whole Directive, e.g. measures promoting energy system integration or utilization of waste heat from cooling systems and processes in buildings and industries. Utilisation of waste heat is to some extent in the current scope of Article 14, most notably in terms of increasing the awareness of the existing potential in waste heat utilization by the way of carrying out the comprehensive assessments and the cost-benefit analysis in case of industrial installations (Article 14(5)). However, the overall effectiveness of the current provisions is insufficient, due to its limited scope. The existing requirements in Article 14 are limited to waste heat produced in industrial installations, thus leaving out some sources of waste heat, such as data centres or other services such as shopping centres or buildings in general. In general, the support for waste heat reuse is not very common among Member States, however the assessment of the NECPs shows that some Member States have implemented or are planning to implement measures in order to support waste heat utilisation. In some Member States, district heating services are subject to a price regulation. Possibilities to promote energy efficiency through price regulation have not been utilized in EED. Some of these regulation frameworks address also the efficiency aspects through obligations to undertake energy efficiency measures, and some of them incentivize operators to improve energy efficiency of the district heating service. The stakeholder consultation, including the stakeholder workshop on heating and cooling revealed that many Member States believe that Article 14 has contributed only to small efficiency improvements and that relevant areas are left out of Article 14 such as data centres, higher system integration (use of waste heat, electrical and thermal efficiencies), building-level measures (heating systems and heat pumps) and local planning and development. Furthermore, the comprehensive analysis have been lacking on the implementation side i.e. the utilization of the identified potential has not been supported by implementation of policies and measures. Article 15 on energy transformation, transmission and distribution Some provisions with a view to improve efficiency of energy transformation, transmission and distribution (Article 15) have been effectively implemented in the Member States, for example, treating energy losses as a separate item in the national efficiency regulations and incentivising demand-side resources in Member States. However, the use of common methodologies and reporting is still not in place and their impact therefore cannot be assessed. In fact, there is no uniform definition of energy losses across the EU which results into a sub-optimal data quality.

Even though the available information shows a gradual increase in energy efficiency (equivalent to a reduction in energy losses – see Table 4 ), the feedback obtained from stakeholders show limited evidence to fully evaluate the effectiveness of Article 15. Energy source 2012 2013 2014 2015 2016 2017 2018 Gas 0.96% 0.83% 0.84% 0.85% 0.72% 0.72% 0.75% Electricity 7.53% 7.60% 7.43% 7.51% 7.39% 7.28% 7.44% Source: Eurostat A study in 2015 shows various technical solutions for improving grid efficiency: in electricity networks for example as confirmed by other studies, the most relevant potential lays in transformers; Commission Regulation 2019/1783 establishes higher efficiency standards (Tier 2) for all transformers installed since July 2021 thus steering the network development towards better efficiency. Although there is no common definition of “non-technical losses”, in some countries they are significant; and the gradual deployment of smart meters will help substantially reduce losses by making their detection easier and faster. Article 19 of the new Electricity Directive 2019/944 gives a strong impulse to this evolution; the current state of play is the object of a specific report. Other more technical instruments, like replacing the conductors or raising the voltage should be addressed on a case by case basis, as their effectiveness depends on the specific punctual condition and are therefore unfit for an EU action. In gas networks the circumstances are more complex, as energy losses take different forms, which can be divided into two groups: the first, and most likely the largest, is represented by the energy contained in the methane released as such into the atmosphere, the second is gas own consumption i.e. used as an energy source within the networks to move or heat the gas itself. The first issue is already actively addressed by the “Methane Strategy”, as the methane leaked in the atmosphere (not only in gas networks) is a powerful greenhouse gas in its own merit as well as for safety reasons. The second, which only occurs in the transmission system and represents a smaller share, can be addressed by replacing the existing compressors with more efficient ones, incurring high investment costs. The literature review indicates that most European regulations targeting gas and electricity tariffs do not treat energy losses as a separate item (instead, energy losses are included in the costs subject to the general regulatory benchmarks). Hence, the evidence indicates that most of the Member States incentivize the energy transmission operators to reduce energy losses if those reductions are economically efficient. The analysis shows that implementing a common methodology to measure energy losses across Member States poses a number of challenges. One of the reasons is that implementing a common methodology can be too prescriptive as the regulatory systems and starting points of each Member States are different, also confirmed by the stakeholders that participated in the workshop, which was held to discuss the findings of the study. In addition, there is a trade-off between flexibility and efficiency that should be considered in a local context, e.g., of how increased flexibility can incur costs to the end-consumers and negatively affect energy poverty. A majority of stakeholders thus showed reluctance to introducing additional common efficiency requirements supported only by the minority of the respondents. Article 15 also contained requirements for promoting demand side resources before they were repealed by the new Electricity Directive in 2019 (to be transposed by Member States by 1 January 2021). In meeting the requirements for balancing and ancillary services, TSOs and DSOs must treat demand response providers, including aggregators, in a non-discriminatory way with Member States engaging in defining technical parameters to promote access and participation of demand response in balancing, reserve and other system services markets. National Regulatory Authorities should also guarantee that clear technical rules and operational requirements (tendering, contractual arrangements, etc.) are disclosed, based on which demand response can take part in the balancing market and in other system services. According to the JRC study of 2016 and information collected from the Member States, the EED constitutes a significant step towards the development of demand response in Europe. Even though a majority of Member States faced challenges to introduce the necessary parameters for ensuring demand response in their countries, this trend has been changing positively with more Member States taking necessary steps to overcome the barriers. While back in 2013 demand response was almost non-existent in Europe, today consumers have the opportunity to participate in demand response services in many Member States in accordance to the EED and now in line with the provisions of the new Electricity Directive. For example, in the Netherlands a scheme has been developed to ensure that providers of demand side response services can compete in the market for the provision of system services if, by switching installations on and off, can contribute to the balancing of the system. Similar schemes have been adopted in other European countries . More recently, the Electricity Directive (Article 17) sets forth a more detailed framework for transmission and distribution operators. Moreover, analysis shows that the Article 15(1) EED requires that national energy regulatory authorities pay due regard to energy efficiency in carrying out the regulatory tasks , and provide suitable incentives to network operators, due to the interpretation given in several Member States the role played to date has been modest. Despite evidence on energy efficiency potential in energy grids and on technical instruments, the pursuit for an EU level action has been inconclusive so far, due to the following factors: ‒The natural evolution of the grids will lead towards energy efficiency, especially the electricity ones; ‒The results of the CBA often advise against a massive elective intervention; ‒Concern that energy efficiency investments may ultimately result in higher prices for the final consumers; ‒Gas network operators are reluctant to invest because of the uncertainty about the long term role of this energy source; ‒Reluctance to have a “common methodology” given the diversity of grids.

·Article 16 on availability of qualification, accreditation and certification schemes Findings suggest that the majority of Member States have established qualification, accreditation and certification schemes covering energy services, energy audits, energy managers and installers. Overall, it seems that the Directive has contributed to setting up the schemes, although in some Member States the schemes existed before. There is limited information available, though, on whether the qualification and certification schemes are effective in ensuring the right level of technical competence in Member States for all energy efficiency specialists (required by Article 16). Article 16 does not contain any specific requirement for Member States to report in the level of qualifications nor on the availability of schemes. However, Member States were required to assess whether the level of technical competence was sufficient before end 2014. The information received from Member States in the 2014 Annual Reports showed that 10 Member States have reported to have sufficient schemes available (Belgium, Bulgaria, Cyprus, Denmark, Croatia, Lithuania, Malta, the Netherlands, Poland and the United Kingdom). Feedback received from stakeholders show that the EED largely contributed to setting up the schemes, and this was mostly due to the other EED provisions such as the requirements to carry out energy audits in non-SMEs in line with Article 8 and ensure the need for certified energy services providers in line with Article 18 of the EED. The majority of stakeholders hold view that qualification and certification schemes are effective to some extent, and the effectiveness of the schemes varies across the Member States (see Figure 8 below). Source: feedback from the open public consultation In addition, the level of technical competence varies across the category of specialists (see Figure 9 ) and the technical competence seems to be satisfactory for energy auditors given the high demand for these specialists linked also to the obligation for non-SMEs to carry out energy audits every four years. Source: Technical assistance study on evaluating the EED (2020) Given that the greater focus is placed on boosting skills and technical competence of the renovation sector in the context of the Renovation Wave, there is a scope for streamlining the provisions in Article 16 to bring them in line with the new policy context. ·Article 18 on energy services and energy performance contracting The EED largely contributed to functioning of energy services markets and to promoting the use of energy performance contracting in renovation practices in the EU both in public and private sectors, thanks to the requirements for Member States to provide information to SMEs and consumers about the available contracts and financing instruments and the available energy services providers that are certified (in line with Article 16). Before the entry into force the concept of energy performance contracting was a novelty for most of the Member States. Provisions in Article 18 triggered the basis for establishing the necessary market conditions and regulatory framework that were vital to establish trust to this business model. However, the EED provisions were implemented at a varying level (see Table 15 in Annex 4) and it was not the only instrument to promote the energy services markets. Supportive financing framework and measures introduced at EU level and national level have also largely contributed such as measures promoted under the Smart Finance for Smart Buildings initiative, ELENA project development assistance, European Structural and Investment Funds, Horizon 2020 and EIB guarantee funds. Overall, requirements of Article 18 have been implemented to some extent by most of the Member States. However, success in addressing regulatory and market barriers since the entry into force of the EED was somewhat modest as there are still important barriers that impede the functioning of energy services markets and the uptake of energy performance contracting (see Table 16 in Annex 4), namely: ‒Inexperience of actors: lack of technical knowledge, lack of experience in procurement etc.;

‒Low trust to energy service providers and energy performance contracting from the (potential) clients: absence of credible reference cases, lack of standardisation of measurement and verification of savings; ‒Ambiguities in the legislative framework: ambiguities in the legislative framework supporting the development of the ESCO market; ‒Low level of awareness: lack of information among consumers on the potential of energy savings. Uptake of energy performance contracting in public sector proved to be to some extent effective thanks to the specific obligations requiring Member States to provide model contracts and information on best practices on available contracts and tools such as the cost-benefit analysis. However, the implementation of these obligations depended very much on the political commitment and measures taken at national level (see Table 17 in Annex 4). More specifically barriers encountered by the public sector are mostly related to trust and ambiguities of the legislation framework, also lack of expertise to prepare the projects, especially as regards to complex tendering procedures), but also competing contracts – cheap loans and grants are preventing the public authorities to take risks of entering contract with the energy services provider. As demonstrated in the recent JRC analysis, the updated Eurostat Guide in September 2017 on the treatment of EnPC in government accounts (and the EIB Practitioners’ Guide on the updated Eurostat guidance in May 2018) have facilitated the appetite for concluding more energy performance contracts in the public sectors even though some Member States reported that they still face difficulties to apply the rules at national level (due to complexity of rules, ambiguities of national legislation and lack of experts). Over 75% of respondents to the JRC survey 2018 underlined that the Energy Efficiency Directive has been instrumental in promoting the energy services market in the Member States, and has contributed to achieving energy savings in Europe. Stakeholders feedback confirm that Article 18 contributed to the functioning of energy services markets even though the provisions ought to be strengthened to ensure better enforcement and tackling of remaining barriers. Amongst the most important factors that contributed to the development of the energy services market in Member States, stakeholders point out to awareness raising measures and access to financing, followed by certification and qualification of energy services providers. There is a need to consider setting requirements of minimum qualifications of service providers, or measurement and verification procedures to ensure better enforcement of Article 18 in the future