Common Position (EC) No 52/2003 of 8 September 2003 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to adopting a directive of the European Parliament and of the Council on the cogeneration based on a useful heat demand in the internal energy market and amending Directive 92/42/EEC
Date: 2003-09-08
Institutions: Council of the European Union
Subjects: domestic market, electrical energy, energy policy, energy production, heating, security of supply

28.10.2003

EN

Official Journal of the European Union

C 258 E/1

I

(Information)

COUNCIL

COMMON POSITION (EC) No 52/2003

adopted by the Council on 8 September 2003

with a view to adopting Directive 2003/. . ./EC of the European Parliament and of the Council on
the promotion of cogeneration based on a useful heat demand in the internal energy market and
amending Directive 92/42/EEC

(2003/C 258 E/01)

THE EUROPEAN PARLIAMENT AND THE COUNCIL
OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 175(1) thereof,

Having regard to the proposal from the Commission (1),

Having regard to the opinion of the European Economic and
Social Committee (2),

Having regard to the opinion of
Regions (3),

the Committee of

the

Acting in accordance with the procedure laid down in Article
251 of the Treaty (4),

Whereas:

(1) The potential for use of cogeneration as a measure to save
energy is underused in the Community at present.
Promotion of high-efficiency cogeneration based on a
useful heat demand is a Community priority given the
potential benefits of cogeneration with regard to saving
primary energy, avoiding network losses and reducing
emissions, in particular of greenhouse gases. In addition,
efficient use of energy by cogeneration can also contribute
positively to the security of energy supply and to the
the European Union and its
competitive situation of
Member States. It is therefore necessary to take measures
to ensure that the potential is better exploited within the
framework of the internal energy market.

(2) Directive 2003/54/EC of the European Parliament and of
the Council of 26 June 2003 (5) establishes common rules
for the generation, transmission, distribution and supply of
electricity within the internal market in electricity.

(1) OJ C 291 E, 26.11.2002, p. 182.
(2) OJ C 95, 23.4.2003, p. 12.
(3) OJ C 244, 10.10.2003, p. 1.
(4) Opinion of the European Parliament of 13 May 2003 (not yet
published in the Official
Journal), Council Common Position of
8 September 2003 (not yet published in the Official Journal) and
Decision of the European Parliament of . . . (not yet published in the
Official Journal).

(5) OJ L 176, 15.7.2003, p. 37.

security of

(3) The Green Paper entitled ‘Towards a European strategy for
the security of energy supply’ points out that the European
Union is extremely dependent on its external energy
supplies currently accounting for 50 % of requirements
and projected to rise to 70 % by 2030 if current trends
persist. Import dependency and rising import ratios may
interruption to or difficulties in
heighten the risk of
supply should not be
supply. However,
conceived as merely a question of
reducing import
dependency and boosting domestic production. Security
of supply calls for a wide range of policy initiatives
aimed at,
inter alia, diversification of sources and tech-
nologies and improved international relations. The Green
Paper emphasised furthermore that security of energy
supply is essential for a future sustainable development.
The Green Paper concludes that
the adoption of new
measures to reduce energy demand is essential both in
terms of reducing the import dependence and in order
to limit greenhouse gas emissions. In its Resolution of
15 November 2001 on the Green Paper, the European
to encourage a shift
Parliament called for
incentives
towards efficient energy production plants,
including
combined heat and power.

(4) The Commission's Communication ‘A Sustainable Europe
for a better world: A European Union strategy for
the Gothenburg
sustainable development’, presented at
identified
European Council on 15 and 16 June 2001,
climate change as one of
to
sustainable development and emphasised the need for
increased use of clean energy and clear action to reduce
energy demand.

the principal barriers

to the United Nations

(5) The increased use of cogeneration geared towards making
primary energy savings could constitute an important part
of the package of measures needed to comply with the
Framework
Kyoto Protocol
Convention on Climate Change, and of any policy
package to meet further commitments. The Commission
in its Communication on the implementation of the first
the European Climate Change Programme
phase of
identified promotion of cogeneration as one of
the
measures needed to reduce the greenhouse gas emissions
from the energy sector and announced its intention to
present a proposal for a Directive on the promotion of
cogeneration in 2002.

C 258 E/2

EN

Official Journal of the European Union

28.10.2003

(6) The importance of cogeneration was also recognised by
the Council Resolution of 18 December 1997 (1) and by
the European Parliament Resolution of 15 May 1998 (2)
on a Community strategy to promote combined heat and
power.

(13) To ensure that support for cogeneration in the context of
this Directive is based on the useful heat demand and
primary energy savings, it is necessary to set up criteria
to determine and assess the energy efficiency of the cogen-
eration production identified under the basic definition.

(7) The Council in its Conclusions of 30 May 2000 and of
5 December 2000 endorsed the Commission's Action Plan
on energy efficiency and identified promotion of cogen-
the short-term priority areas. The
eration as one of
European Parliament in its Resolution of 14 March 2001
on the Action Plan on energy efficiency (3) called on the
Commission to submit proposals establishing common
rules
the promotion of cogeneration, where this
makes environmental sense.

for

(8) Council Directive 96/61/EC of 24 September 1996
concerning integrated pollution prevention and control (4),
Directive 2001/80/EC of the European Parliament and of
the Council of 23 October 2001 on the limitation of
emissions of certain pollutants into the air from large
combustion plants (5) and Directive 2000/76/EC of the
European Parliament and of the Council of 4 December
2000 on the incineration of waste (6), highlight the need
to evaluate the potential for cogeneration in new instal-
lations.

(9) Directive 2002/91/EC of the European Parliament and of
the Council of 16 December 2002 on the energy
performance of buildings (7), requires the Member States
to ensure that for new buildings with a total useful floor
area of over 1 000 m2, the technical, environmental and
economic feasibility of alternative systems, such as cogen-
eration of heat and power, is considered and taken into
account before construction starts.

(10) High efficiency cogeneration is, in this Directive, defined
by the energy savings obtained by combined production
instead of separate production of heat and electricity.
Energy savings of more than 10 % qualify for the term
‘high-efficiency cogeneration’. To maximise the energy
the
savings and to avoid energy savings being lost,
greatest attention must be paid to the
functioning
conditions of cogeneration units.

(11) In the context of the evaluation of primary energy savings,
the situation of
electricity

to take into account
in which the most of

it
Member
consumption is covered by imports.

is important
States

(12) It is important for transparency to adopt a harmonised
basic definition of cogeneration. Where cogeneration
installations are equipped to generate separate electricity
such production should not be
or heat production,
specified as cogeneration for
issuing a guarantee of
origin and for statistical purposes.

(1) OJ C 4, 8.1.1998, p. 1.
(2) OJ C 167, 1.6.1998, p. 308.
(3) OJ C 343, 5.12.2001, p. 190.
(4) OJ L 257, 10.10.1996, p. 26.
(5) OJ L 309, 27.11.2001, p. 1.
(6) OJ L 332, 28.12.2000, p. 91.
(7) OJ L 1, 4.1.2003, p. 65.

(14) In the long term, the general objective of this Directive
should be to establish a harmonised calculation of elec-
taking into account metho-
tricity from cogeneration,
dologies
currently under development by
European standardisation organisations.

such as

(15) The definitions of cogeneration and of high-efficiency
cogeneration used in this Directive do not prejudge the
use of different definitions in national
for
purposes other than those set out in this Directive. It is
appropriate to borrow in addition the relevant definitions
contained in Directive 2003/54/EC and in Directive
2001/77/EC of
the
Council of 27 September 2001 on the promotion of elec-
tricity produced from renewable energy sources in the
internal electricity market (8).

the European Parliament and of

legislation,

(16) Measuring the useful heat output at

the point of
production of the cogeneration plant underlines the need
to ensure that advantages of the cogenerated useful heat
are not lost in high heat losses from distribution networks.

(17) The power to heat ratio is a technical characteristic that
needs to be defined in order to calculate the amount of
electricity from cogeneration.

to generate only electrical

(18) For the purpose of this Directive, the definition of ‘cogen-
eration units’ may also include equipment where it
is
energy or only
possible
thermal energy, such as auxiliary firing and after-burning
units. The output from such equipment should not be
considered as cogeneration for issuing a guarantee of
origin and for statistical purposes.

(19) The definition of ‘small-scale cogeneration’ comprises, inter
alia, micro-cogeneration and distributed cogeneration units
such as cogeneration units supplying isolated areas or
limited residential, commercial or industrial demands.

(20) To increase

the

transparency for

consumer's choice
between electricity from cogeneration and electricity
produced on the basis of other
is
necessary to ensure that, on the basis of harmonised effi-
the origin of high efficiency
ciency reference values,
the
Schemes
cogeneration can be
guarantee of origin do not by themselves imply a right
to benefit from national support mechanisms.

guaranteed.

techniques,

for

it

(8) OJ L 283, 27.10.2001, p. 33.

28.10.2003

EN

Official Journal of the European Union

C 258 E/3

(21) It is important that all forms of electricity produced from
high-efficiency cogeneration can be covered by guarantees
of origin.
to distinguish guarantees of
origin clearly from exchangeable certificates.

is important

It

(22) To ensure increased market penetration of cogeneration in
the medium term, it is appropriate to require all Member
States to adopt and publish a report analysing the national
potential for high-efficiency cogeneration and to include a
separate analysis of barriers to cogeneration in the report,
and of measures taken to ensure the reliability of the
guarantee system.

(27) In general, micro-cogeneration units up to 400 kW,
falling within the definitions of Council Directive
92/42/EEC of 21 May 1992 on efficiency requirements
for new hot-water boilers fired with liquid or gaseous
fuels (2), are unlikely to meet
the minimum efficiency
requirements therein and should therefore be excluded
from that Directive.

(28) The specific structure of the cogeneration sector, which
includes many
and medium-sized producers,
should be taken into account, especially when reviewing
the administrative procedures for obtaining permission to
construct cogeneration capacity.

small

if

it can be shown that

(23) Public support should be consistent with the provisions of
the Community guidelines on State aid for environmental
protection (1), including as regards the non-cumulation of
aid. These guidelines currently allow certain types of
the support
public support
the
measures are beneficial
environment
is
particularly high, because the measures will allow energy
consumption to be reduced or because the production
process will be less damaging to the environment. Such
support will in some cases be necessary to further exploit
to take
in particular
for cogeneration,
the potential
account of the need to internalise external costs.

in terms of protection of
efficiency
the

conversion

because

(29) Within the purpose of

this Directive,

a
to create
it is important
framework for promoting cogeneration,
to emphasise the need for a stabile economical and admin-
istrative environment for investments in new cogeneration
installations. Member States should be encouraged to
address this need by designing support schemes with a
duration period of at least four years and by avoiding
frequent
etc.
in administrative procedures
should furthermore be encouraged to
Member States
ensure
the
schemes
that
phase-out principle.

changes

support

respect

public

(24) Public

support

for promoting cogeneration
should focus mainly on support for cogeneration based
on economically justifiable demand for heat and cooling.

schemes

(25) Member States operate different mechanisms of support
for cogeneration at the national level, including investment
aid, tax exemptions or reductions, green certificates and
direct price support schemes. One important means to
this Directive is to guarantee the
achieve the aim of
proper
a
of
functioning
harmonised Community framework is put into operation,
in order to maintain investor confidence. The Commission
intends to monitor the situation and report on experiences
gained with the application of national support schemes.

these mechanisms,

until

(26) For the transmission and distribution of electricity from
high-efficiency cogeneration, the provisions of Article 7(1),
(2) and (5) of Directive 2001/77/EC as well as relevant
provisions of Directive 2003/54/EC should apply. Until
the cogeneration producer is an eligible customer under
national legislation within the meaning of Article 21(1) of
Directive 2003/54/EC, tariffs related to the purchase of
additional electricity sometimes needed by cogeneration
producers should be set according to objective, transparent
and non-discriminatory criteria. Especially for small-scale
cogeneration units access to the grid system of electricity
produced from high efficiency cogeneration may be
facilitated subject to notification to the Commission.

(1) OJ C 37, 3.2.2001, p. 3.

(30) The overall efficiency and sustainability of cogeneration is
dependent on many factors, such as technology used, fuel
types, load curves, the size of the unit, and also on the
properties of the heat. For practical reasons and based on
the fact, that the use of the heat output for different
purposes
the
heat, and that these and other differences influence effi-
cogeneration could be
the cogeneration,
ciencies of
divided into classes
‘industrial cogeneration’,
such as:
‘heating cogeneration’ and ‘agricultural cogeneration’.

temperature levels of

requires different

a

framework

in Article 5 of

(31) In accordance with the principles of subsidiarity and
the Treaty,
proportionality as set out
general principles providing
the
for
promotion of cogeneration in the internal energy market
the detailed
should be set at Community level, but
implementation should be left
thus
allowing each Member State to choose the regime,
which corresponds best to its particular situation. This
to the minimum required in
Directive confines itself
order
to achieve those objectives and does not go
beyond what is necessary for that purpose.

to Member States,

(32) The measures necessary for the implementation of this
Directive should be adopted in accordance with Council
Decision 1999/468/EC of 28 June 1999 laying down the
procedures
implementing powers
the exercise of
conferred on the Commission (3),

for

(2) OJ L 167, 22.6.1992, p. 17. Directive as last amended by Directive

93/68/EEC (OJ L 220, 30.8.1993, p. 1).

(3) OJ L 184, 17.7.1999, p. 23.

C 258 E/4

EN

Official Journal of the European Union

28.10.2003

HAVE ADOPTED THIS DIRECTIVE:

cogeneration process and gross electricity and mechanical
energy production;

Article 1

Purpose

The purpose of this Directive is to increase energy efficiency
and improve security of supply by creating a framework for
promotion and development of high efficiency cogeneration of
heat and power based on useful heat demand and primary
taking into
energy savings in the internal energy market,
account
especially
circumstances
concerning climatic and economic conditions.

national

specific

the

Article 2

Scope

This Directive shall apply to cogeneration as defined in Article
3 and cogeneration technologies listed in Annex I.

Article 3

Definitions

(h)

‘efficiency’ shall mean efficiency calculated on the basis of
‘net calorific values’ of fuels (also referred to as ‘lower
calorific values’);

(i)

(j)

(k)

‘high-efficiency cogeneration’
meeting the criteria of Annex III(a);

shall mean cogeneration

‘efficiency reference value for separate production’ shall
mean efficiency of the alternative separate productions of
is
heat and electricity that
intended to substitute;

the cogeneration process

‘power to heat ratio’ shall mean the ratio between elec-
tricity from cogeneration and useful heat when operating
at full capacity in cogeneration mode using operational
data of the specific unit;

(l)

‘cogeneration unit’ shall mean a unit that can operate in
cogeneration mode;

For the purpose of this Directive, the following definitions shall
apply:

(m) ‘small-scale cogeneration’ shall mean cogeneration units

with an installed capacity below 1 MWe;

(a)

(b)

(c)

(d)

(e)

(f)

‘cogeneration’ shall mean the simultaneous generation in
one process of
thermal energy and electrical and/or
mechanical energy;

(n)

‘cogeneration production’ shall mean the sum of electricity
and mechanical energy and useful heat from cogeneration.

‘useful heat’ shall mean heat produced in a cogeneration
process to satisfy an economically justifiable demand for
heat or cooling;

‘economically justifiable demand’ shall mean the demand
that does not exceed the needs for heat or cooling and
which would otherwise be satisfied at market conditions
by energy generation processes other than cogeneration;

from cogeneration’

‘electricity
shall mean electricity
generated in a process linked to the production of useful
heat and calculated in accordance with the methodology
laid down in Annex II;

‘back-up electricity’ shall mean the electricity supplied
through the electricity grid whenever the cogeneration
process is disrupted,
including maintenance periods, or
out of order;

‘top-up electricity’
shall mean the electricity supplied
through the electricity grid in cases where the electricity
demand is greater than the electrical output of the cogen-
eration process;

In addition, the relevant definitions in Directive 2003/54/EC,
and in Directive 2001/77/EC shall apply.

Article 4

Efficiency criteria of cogeneration

1.
For the purpose of determining the efficiency of cogen-
eration in accordance with Annex III, the Commission shall, in
accordance with the procedure referred to in Article 14(2), not
later
than . . . (*), establish harmonised efficiency reference
values for separate production of electricity and heat. These
shall consist of a
harmonised efficiency reference values
matrix of values differentiated by relevant factors,
including
fuel mix and climate conditions, and
year of construction,
must be based on a well-documented analysis taking,
inter
alia,
into account data from operational use under realistic
conditions, cross-border exchange of electricity, as well as
applied cogeneration technologies in accordance with the prin-
ciples in Annex III.

The Commission shall, in accordance with the procedure
2.
referred to in Article 14(2), review the harmonised efficiency
reference values for separate production of electricity and heat
referred to in paragraph 1, for the first time on . . . (**), and
every four years thereafter, to take account of technological
in the distribution of energy
developments and changes
sources.

(g)

‘overall efficiency’ shall mean the annual sum of electricity
and mechanical energy production and useful heat output
input used for heat produced in a
divided by the fuel

(*) Two years after entry into force of this Directive.
(**) Seven years after entry into force of this Directive.

28.10.2003

EN

Official Journal of the European Union

C 258 E/5

3. Member States implementing this Directive before the
establishment by the Commission of harmonised efficiency
reference values for separate production of electricity and
should, until
heat
the date
referred to in paragraph 1,
their national efficiency
referred to in paragraph 1, adopt
reference values for separate production of heat and electricity
to be used for the calculation of primary energy savings from
cogeneration in accordance with the methodology set out in
Annex III.

Article 5

Guarantee of origin of electricity from high-efficiency
cogeneration

On the basis of

1.
the harmonised efficiency reference
values referred to in Article 4(1), Member States shall, not
later than six months after adoption of these values, ensure
the origin of electricity produced from high-efficiency
that
cogeneration can be guaranteed according to objective, trans-
parent and non-discriminatory criteria laid down by each
Member State. They shall ensure that this guarantee of origin
of the electricity enables producers to demonstrate that the
electricity they sell
is produced from high-efficiency cogen-
eration and is issued, to this effect, in response to a request
from the producer.

2. Member States may designate one or more competent
bodies,
independent of generation and distribution activities,
to supervise the issue of the guarantee of origin referred to
in paragraph 1.

3. Member States or the competent bodies shall put in place
appropriate mechanisms to ensure that the guarantee of origin
are both accurate and reliable and they shall outline in the
report referred to in Article 10(1)
the measures taken to
ensure the reliability of the guarantee system.

4.
Schemes for the guarantee of origin do not by themselves
imply a right to benefit from national support mechanisms.

5.

A guarantee of origin shall:

— specify the lower calorific value of the fuel source from
which the electricity was produced, specify the use of the
heat generated together with the electricity and finally
specify the dates and places of production,

— specify the quantity of electricity from high-efficiency
the

cogeneration in accordance with Annex II
guarantee represents,

that

— specify the primary energy savings calculated in accordance
with Annex III based on harmonised efficiency reference
values established by the Commission as referred to in
Article 4(1).

Member States may include additional
guarantee of origin.

information on the

as proof of

6.
Such guarantees of origin, issued according to paragraph
1, should be mutually recognised by the Member States,
exclusively
to in
the
paragraph 5. Any refusal to recognise a guarantee of origin
as
relating to the
prevention of fraud, must be based on objective, transparent
and non-discriminatory criteria.

in particular

such proof,

elements

referred

reasons

for

In the event of refusal to recognise a guarantee of origin, the
Commission may compel the refusing party to recognise it,
particularly with
and
non-discriminatory criteria on which such recognition is based.

to objective,

transparent

regard

Article 6

National potentials for high-efficiency cogeneration

1. Member States shall establish an analysis of the national
potential for the application of high-efficiency cogeneration.

2.

The analysis shall:

— be based on well-documented scientific data and comply

with the criteria listed in Annex IV,

— identify all potential

for useful heating and cooling
demands, suitable for application of high-efficiency cogen-
eration, as well as the availability of fuels and other energy
resources to be utilised in cogeneration,

In particular,

— include a separate analysis of barriers, which may prevent
the realisation of the national potential for high-efficiency
cogeneration.
this analysis shall consider
barriers relating to the prices and costs of and access to
fuels, barriers in relation to grid system issues, barriers in
relation to administrative procedures, and barriers relating
to the lack of internalisation of the external costs in energy
prices.

3. Member States shall for the first time not later than . . . (*)
and thereafter every four years, following a request by the
Commission at least six months before the due date, evaluate
progress towards increasing the share of high-efficiency cogen-
eration.

Article 7

Support schemes

1. Member States shall ensure that support for cogeneration,
existing and future units, is based on the useful heat demand
and primary energy savings,
in the light of opportunities
available for reducing energy demand through other econ-
omically feasible or environmental advantageous measures
like other energy efficiency measures.

(*) Three years after the entry into force of this Directive.

C 258 E/6

EN

Official Journal of the European Union

28.10.2003

2. Without prejudice to Articles 87 and 88 of the Treaty,
the Commission shall evaluate the application of support
mechanisms used in Member States according to which a
producer of cogeneration receives, on the basis of regulations
issued by public authorities, direct or indirect support, which
could have the effect of restricting trade.

(a) encouraging the design of cogeneration units to match
economically justifiable demands for useful heat output
and avoiding production of more heat than useful heat;

(b) reducing the regulatory and non-regulatory barriers to an

increase in cogeneration;

The Commission shall consider whether those mechanisms
contribute to the pursuit of the objectives set out in Articles
6 and 174(1) of the Treaty.

(c) streamlining and expediting procedures at the appropriate

administrative level; and

The Commission shall in the report referred to in Article
3.
11 present a well-documented analysis on experience gained
with the application and coexistence of the different support
mechanisms referred to in paragraph 2 of this Article. The
report shall assess the success, including cost-effectiveness, of
the support systems in promoting the use of high-efficiency
cogeneration in conformity with the national potentials
referred to in Article 6. The report shall further review to
what extent
the support schemes have contributed to the
creation of stable conditions for investments in cogeneration.

(d) ensuring that

transparent and
the rules are objective,
non-discriminatory, and take fully into account the particu-
larities of the various cogeneration technologies.

2. Member States shall, where this is appropriate in the
legislation, provide an indication of the
context of national
stage reached specifically in:

(a) coordination between the different administrative bodies as
regards deadlines, reception and treatment of applications
for authorisations;

Article 8

Electricity grid system and tariff issues

(b) the drawing up of possible guidelines for the activities
referred to in paragraph 1, and the feasibility of a fast-track
planning procedure for cogeneration producers; and

For

1.
the purpose of ensuring the transmission and
distribution of electricity produced from high-efficiency cogen-
eration the provisions of Article 7(1), (2) and (5) of Directive
2001/77/EC as well as the relevant provisions of Directive
2003/54/EC shall apply.

2.
Until the cogeneration producer is an eligible customer
under national legislation within the meaning of Article 21(1)
of Directive 2003/54/EC, Member States should take the
necessary measures to ensure that the tariffs for the purchase
of electricity to back-up or top-up electricity generation are set
on the basis of published tariffs and terms and conditions.

Subject to notification to the Commission, Member States
3.
may particularly facilitate access to the grid system of elec-
tricity produced from high-efficiency cogeneration from small
scale cogeneration units.

Article 9

Administrative procedures

1. Member States or the competent bodies appointed by the
Member States shall evaluate the existing legislative and regu-
latory framework with regard to authorisation procedures or
the other procedures laid down in Article 6 of Directive
2003/54/EC, which are applicable to high-efficiency cogen-
eration units.

(c)

the designation of authorities
to act as mediators in
disputes between authorities responsible for issuing author-
isations and applicants for authorisations.

Article 10

Member States' reporting

1. Member States shall, not
later than . . . (*), publish a
report with the results of the analysis and evaluations carried
out in accordance with Article 5(3), Article 6(1) and Article
9(1) and (2).

2. Member States shall not later than . . . (**) and thereafter
every four years, following a request by the Commission at
least six months before the due date, publish a report with
the result of the evaluation referred to in Article 6(3).

3. Member States shall submit to the Commission, for the
first time before the end of December 2004 covering data for
the year 2003, and thereafter on an annual basis, statistics on
national electricity and heat production from cogeneration, in
accordance with the methodology shown in Annex II.

They shall also submit annual
statistics on cogeneration
capacities and fuels used for cogeneration. Member States
may
savings
in accordance with
achieved by application of cogeneration,
the methodology shown in Annex III.

statistics on primary

also submit

energy

Such evaluation shall be made with a view to:

(*) Two years after the entry into force of this Directive.
(**) Three years after the entry into force of this Directive.

28.10.2003

EN

Official Journal of the European Union

C 258 E/7

Article 11

Commission reporting

On the basis of the reports submitted pursuant to Article 10,
the Commission shall review the application of this Directive
and submit to the European Parliament and to the Council not
later than . . . (*) and thereafter every four years, a progress
report on the implementation of this Directive. In particular,
the report shall:

(a) consider progress towards realising national potentials for

high-efficiency cogeneration referred to in Article 6;

(b) assess the extent to which rules and procedures defining
the framework conditions for cogeneration in the internal
energy market are set on the basis of objective, transparent
and non-discriminatory criteria taking due account of the
benefits of cogeneration;

(c) examine the experiences gained with the application and
coexistence of different support mechanisms for cogen-
eration;

Until the end of 2010, Member States may, using an
3.
alternative methodology, define a cogeneration as high-effi-
ciency cogeneration without verifying that the cogeneration
production fulfils the criteria in Annex III(a),
if it is proved
level that the cogeneration production identified
on national
by such an alternative calculation methodology on average
fulfils the criteria in Annex III(a). If a guarantee of origin is
issued for such production then the efficiency of the cogen-
eration production specified on the guarantee shall not exceed
the threshold values of the criteria in Annex III(a) unless calcu-
lations in accordance with Annex III prove otherwise. However,
specification of the quantity of electricity from cogeneration
produced in such a production,
for issuing a guarantee of
origin and for statistical purposes, shall be determined in
accordance with Annex II.

Article 13

Review

1.
The threshold values used for calculation of electricity
from cogeneration referred to in Annex II(a) shall be adapted
to technical progress in accordance with the procedure referred
to in Article 14(2).

(d) review efficiency reference values for separate production

on the basis of the current technologies.

The threshold values used for calculation of efficiency of
2.
cogeneration production and primary energy savings referred
to in Annex III(a) shall be adapted to technical progress in
accordance with the procedure referred to in Article 14(2).

If appropriate, the Commission shall submit, with the report,
further proposals to the European Parliament and the Council.

Article 12

Alternative calculations

Until the end of 2010 and subject to prior approval by
1.
the Commission, Member States may use other methods than
the one provided for in Annex II(b) to subtract possible elec-
tricity production not produced in a cogeneration process from
the reported figures. However, for the purposes referred to in
Article 5(1) and in Article 10(3), the quantity of electricity
from cogeneration shall be determined in accordance with
Annex II.

2. Member States may calculate primary energy savings
from a production of heat and electricity and mechanical
energy according to Annex III(c), without using Annex II to
exclude the non-cogenerated heat and electricity parts of the
same process. Such a production can be regarded as high-effi-
ciency cogeneration provided it fulfils the efficiency criteria in
Annex III(a) and,
for cogeneration units with an electrical
capacity larger than 25 MW, the overall efficiency is above
70 %. However, specification of
the quantity of electricity
for
from cogeneration produced in such a production,
issuing a guarantee of origin and for statistical purposes,
shall be determined in accordance with Annex II.

Article 14

Committee procedure

1.

The Commission shall be assisted by a Committee.

2. Where reference is made to this paragraph, Articles 5 and
7 of Decision 1999/468/EC shall apply, having regard to the
provisions of Article 8 thereof.

The period laid down in Article 5(6) of Decision 1999/468/EC
shall be set at three months.

3.

The Committee shall adopt its rules of procedure.

Article 15

Transposition

Member States shall bring into force the laws, regulations and
administrative provisions necessary to comply with this
Directive not later than . . . (**). They shall forthwith inform
the Commission thereof.

(*) Four years after the entry into force of this Directive.

(**) Two years after the entry into force of this Directive.

C 258 E/8

EN

Official Journal of the European Union

28.10.2003

When Member States adopt these measures, they shall contain
a reference to this Directive or shall be accompanied by such a
reference on the occasion of their official publication. The
Member States shall
lay down the methods of making such
reference.

Article 16

Amendment to Directive 92/42/EEC

The following indent shall be added to Article 3(1) of Directive
92/42/EEC:

Article 17

Entry into force

This Directive shall enter into force on the day of its publi-
cation in the Official Journal of the European Union.

Article 18

Addressees

This Directive is addressed to the Member States.

‘— cogeneration units as defined in Directive 2003/. . ./EC of
the European Parliament and of the Council of . . . on the
promotion of cogeneration based on useful heat demand
in the internal energy market (*).

Done at . . .,

(*) OJ L . . .’.

For the European Parliament

For the Council

The President

The President

28.10.2003

EN

Official Journal of the European Union

C 258 E/9

COGENERATION TECHNOLOGIES COVERED BY THIS DIRECTIVE

ANNEX I

(a) Combined cycle gas turbine with heat recovery

(b) Steam backpressure turbine

(c) Steam condensing extraction turbine

(d) Gas turbine with heat recovery

(e)

Internal combustion engine

(f) Microturbines

(g) Stirling engines

(h) Fuel cells

(i) Steam engines

(j) Organic Rankine cycles

(k) Any other type of technology or combination thereof falling under the definition laid down in Article 3(a).

C 258 E/10

EN

Official Journal of the European Union

28.10.2003

ANNEX II

CALCULATION OF ELECTRICITY FROM COGENERATION

Values used for calculation of electricity from cogeneration shall be determined on the basis of the expected or actual
operation of the unit under normal conditions of use.

(a) Electricity production from cogeneration shall be considered equal to total annual electricity production of the unit

measured at the outlet of the main generators:

(i) in cogeneration units of type (b), (d), (e), (f), (g) and (h) referred to in Annex I, with an annual overall efficiency

set by Member States at a level of at least 75 %; and

(ii) in cogeneration units of type (a) and (c) referred to in Annex I with an annual overall efficiency set by Member

States at a level of at least 80 %.

(b) In cogeneration units with an annual overall efficiency below the value referred to in paragraph (a)(i) (cogeneration
units of type (b), (d), (e), (f), (g), and (h) referred to in Annex I) or with an annual overall efficiency below the value
referred to in paragraph (a)(ii)
(cogeneration units of type (a) and (c) referred to in Annex I) cogeneration is
calculated according to the following formula:

E CHP = H CHP · C

where

E CHP

is the amount of electricity from cogeneration

C

is the power to heat ratio

H CHP

is the amount of useful heat from cogeneration (calculated for this purpose as total heat production minus
any heat produced in separate boilers or by live steam extraction from the steam generator before the
turbine).

The calculation of electricity from cogeneration must be based on the actual power to heat ratio. If the actual power
to heat ratio of a cogeneration unit is not known, the following default values may be used for units of type (a), (b),
(c), (d), and (e) referred to in Annex I provided that the calculated cogeneration electricity is less or equal to total
electricity production of the unit:

Type of the unit

Default power to heat ratio, C

Combined cycle gas turbine with heat recovery

Steam backpressure turbine

Steam condensing extraction turbine

Gas turbine with heat recovery

Internal combustion engine

0,95

0,45

0,45

0,55

0,75

If Member States introduce default values for power to heat ratios for units of type (f), (g), (h), (i), (j) and (k) referred
to in Annex I, such default values shall be published and shall be notified to the Commission.

(c)

If a share of the energy content of the fuel input to the cogeneration process is recovered in chemicals and recycled
this share can be subtracted from the fuel input before calculating the overall efficiency used in paragraphs (a) and
(b).

(d) Member States may determine the power to heat ratio as the ratio between electricity and useful heat when

operating in cogeneration mode at a lower capacity using operational data of the specific unit.

(e) Member States may use other reporting periods than one year for the purpose of the calculations according to

paragraphs (a) and (b).

28.10.2003

EN

Official Journal of the European Union

C 258 E/11

ANNEX III

METHODOLOGY FOR DETERMINING THE EFFICIENCY OF THE COGENERATION PROCESS

Values used for calculation of efficiency of cogeneration and primary energy savings shall be determined on the basis of
the expected or actual operation of the unit under normal conditions of use.

(a) High-efficiency cogeneration

For the purpose of this Directive high-efficiency cogeneration shall fulfil the following criteria:

— cogeneration production from cogeneration units shall provide primary energy savings calculated according to

point (b) of at least 10 % compared with the references for separate production of heat and electricity,

— production from small-scale cogeneration units providing primary energy savings may qualify as high-efficiency

cogeneration.

(b) Calculation of primary energy savings

The amount of primary energy savings provided by cogeneration production defined in accordance with Annex II
shall be calculated on the basis of the following formula:

PES ¼

8
>>>:
1 (cid:1)

1

CHP H(cid:1)
Ref H(cid:1) þ

CHP E(cid:1)
Ref E(cid:1)

9
>>>;

(cid:2) 100 %

Where:

PES

is primary energy savings

CHP Hη

is the heat efficiency of the cogeneration production defined as annual useful heat output divided by the
fuel input used to produce the sum of useful heat output and electricity from cogeneration.

Ref Hη

is the efficiency reference value for separate heat production.

CHP Eη

is the electrical efficiency of the cogeneration production defined as annual electricity from cogeneration
divided by the fuel input used to produce the sum of useful heat output and electricity from cogen-
eration. Where a cogeneration unit generates mechanical energy, the annual electricity from cogen-
eration may be increased by an additional element representing the amount of electricity which is
equivalent to that of mechanical energy. This additional element will not create a right to issue
guarantees of origin in accordance with Article 5.

Ref Eη

is the efficiency reference value for separate electricity production.

(c) Calculations of energy savings using alternative calculation according to Article 12(2)

If primary energy savings for a process are calculated in accordance with Article 12(2) the primary energy savings
shall be calculated using the formula in paragraph b) of this Annex replacing:

‘CHP Hη’ with ‘Hη’ and

‘CHP Eη’ with ‘Eη’

where:

Hη

Eη

shall mean the heat efficiency of the process, defined as the annual heat output divided by the fuel input
used to produce the sum of heat output and electricity output.

shall mean the electricity efficiency of the process, defined as the annual electricity output divided by
the fuel input used to produce the sum of heat output and electricity output. Where a cogeneration unit
generates mechanical energy, the annual electricity from cogeneration may be increased by an additional
element representing the amount of electricity which is equivalent to that of mechanical energy. This
additional element will not create a right to issue guarantees of origin in accordance with Article 5.

(d) Member States may use other reporting periods than one year for the purpose of the calculations according to

paragraph (b) and (c) of this Annex.

C 258 E/12

EN

Official Journal of the European Union

28.10.2003

(e) Efficiency reference values for separate production of heat and electricity

The principles for defining the efficiency reference values for separate production of heat and electricity referred to
in Article 4(1) and in the formula set out in paragraph (b) of this Annex shall establish the operating efficiency of
the separate heat and electricity production that cogeneration is intended to substitute.

The efficiency reference values shall be calculated according to the following principles:

1. for cogeneration units as defined in Article 3, the comparison with separate electricity production shall be based

on the principle that the same fuel categories are compared;

2. each cogeneration unit shall be compared with the best available and economically justifiable technology for
separate production of heat and electricity on the market in the year of construction of the cogeneration unit;

3. the efficiency reference values for cogeneration units older than 10 years of age shall be fixed on the reference

values of units of 10 years of age;

4. the efficiency reference values for separate electricity production and heat production shall reflect the climatic

differences between Member States.

28.10.2003

EN

Official Journal of the European Union

C 258 E/13

CRITERIA FOR ANALYSIS OF NATIONAL POTENTIALS FOR HIGH-EFFICIENCY COGENERATION

ANNEX IV

(a) The analysis of national potentials referred to in Article 6 shall consider:

— the type of fuels that are likely to be used to realise the cogeneration potentials, including specific considerations
on the potential for increasing the use of renewable energy sources in the national heat markets via cogen-
eration,

— the type of cogeneration technologies as listed in Annex I that are likely to be used to realise the national

potential,

— the type of separate production of heat and electricity or, where feasible, mechanical energy that high-efficiency

cogeneration is likely to substitute,

— a division of the potential into modernisation of existing capacity and construction of new capacity.

(b) The analysis shall

include appropriate mechanisms to assess the cost effectiveness,

in terms of primary energy
savings, of increasing the share of high-efficiency cogeneration in the national energy mix. The analysis of cost
effectiveness shall also take into account national commitments accepted in the context of the climate change
commitments accepted by the Community pursuant to the Kyoto Protocol to the United Nations Framework
Convention on Climate Change.

(c) The analysis of the national cogeneration potential shall specify the potentials in relation to the timeframes 2010,

2015 and 2020 and include, where feasible, appropriate cost estimates for each of the timeframes.

C 258 E/14

EN

Official Journal of the European Union

28.10.2003

STATEMENT OF THE COUNCIL'S REASONS

I. INTRODUCTION

1. On 24 July 2002, the Commission presented a proposal (1) based on Article 175(1) of the Treaty.

2. The Economic and Social Committee delivered its opinion (2) on 26 February 2003. The Committee

of the Regions delivered its opinion on 9 April 2003 (3).

3. The European Parliament adopted its opinion (4) at first reading on 13 May 2003, approving 74
In the light of this opinion the Commission presented a modified proposal on

amendments.
2003 (5).

4. On 8 September 2003, the Council adopted its common position in accordance with Article 251 of

the Treaty.

II. OBJECTIVE OF THE PROPOSAL

5. The objective of this proposal

is to create a framework, which can support and facilitate the
installation and proper functioning of electrical cogeneration plants where useful heat demand
exists or is foreseen. The specific aim is further:

— in the short term: to consolidate existing, and, where feasible, promote new high-efficiency
cogeneration installations in the internal energy market, notably through guarantees of origin,
access to support schemes and access to the grid,

— in the medium to long term: to create the necessary framework (notably through the estab-
that will ensure that high efficiency cogeneration
lishment of efficiency reference values)
constitutes a key element
in the efforts towards increasing energy efficiency and energy
savings. By creating a supportive framework, cogeneration can contribute to the establishment
of more diversified and energy efficient supply systems in the Community.

III. ANALYSIS OF THE COMMON POSITION

6. The main changes introduced by the Council are as follows:

— clarification of the objective of the Directive (Article 1 and throughout the Directive): the aim of
increasing energy efficiency and improving security of supply should be reached through the
promotion of ‘high-efficiency’ cogeneration,

— definitions (Article 3): the common position maintains those definitions necessary for the under-
standing of the provisions of this proposal, and it clarifies and simplifies them in coherence with
the enacting provisions,

— efficiency criteria (Article 4): while the Commission proposal

invited Member States to adopt
efficiency reference values for separate production of heat and electricity,
the common
position makes clear that it is up to the Commission, based on the methodology for determining
efficiency of cogeneration and primary energy savings set out in Annex III, to establish (in
accordance with the Comitology procedure referred to in Article 14) harmonised efficiency
reference values for separate production of electricity and heat,

(1) OJ C 291 E, 26.11.2002, p. 182.
(2) OJ C 95, 23.4.2003, p. 12.
(3) OJ C 244, 10.10.2003, p. 1.
(4) OJ C . . .
(5) Due to be received.

28.10.2003

EN

Official Journal of the European Union

C 258 E/15

— guarantee of origin (Article 5): on the basis of these harmonised efficiency reference values, Member
States ensure the possibility of issuing a guarantee of origin thus enabling producers to demon-
strate that the electricity is produced from ‘high-efficiency’ cogeneration. This guarantee should
be mutually recognised by Member States, exclusively as proof, and does not lead in itself to
commercial exchanges. Schemes for the guarantee of origin do not by themselves imply a right
to benefit from national support mechanisms established in different Member States,

— grid system and tariff issues (Article 8): in order to clarify the relation between this Directive and
Directives 2001/77/EC and 2003/54/EC, the common position provides that for transmission
and distribution of electricity from ‘high-efficiency’ cogeneration the provisions of Article 7(1),
(2) and (5) of the Directive on the promotion of electricity from renewable energy sources
(2001/77/EC) as well as the relevant provisions of Directive 2003/54/EC shall apply, while
Member States may facilitate in particular access to the grid of electricity for ‘high-efficiency’
small-scale cogeneration units,

— reporting from Member States and Commission (Article 10 and Article 11): consistency of these

provisions has been improved and they have been made less burdensome,

— alternative calculations (Article 12): in order to create the necessary flexibility, Member States may,
under certain strict conditions, use other methods or definitions than those provided for in
Annex II, or define ‘high-efficiency’ cogeneration on an alternative basis than the one set out
in Annex III. However,
it is made clear that a guarantee of origin can only be issued in
accordance with Annexes II and III,

— review of threshold values (Article 13): the values established for the definition of electricity from
cogeneration in Annex II, as well as those used for the calculation of efficiency of cogeneration
and primary energy savings (Annex III) are subject to review through a comitology procedure,

— committee procedure (Article 14): with a view to further adaptation of reference and threshold
the common position provided for a comitology

technical progress,

inter alia,

values to,
procedure,

— Annex II (Definition of electricity from cogeneration): more flexibility has been given to Member
States for alternative determinations of the ‘power to heat ratio’, for the subtraction of the energy
share recovered in chemicals and of the reporting periods provided for in this Annex,

— Annex III (Methodology for determining the efficiency of cogeneration production): in line with
the approach establishing that cogeneration units have to be compared with reference values
reflecting the best available and economically justifiable technology on the market in the year of
their construction (units older than 10 years being compared with values of 10-year old units)
the criterion for ‘high-efficiency’ cogeneration production is to provide primary energy savings of
at least 10 %. This Annex also sets out the formula to be used by Member States which follow
alternative calculation methods.

IV. AMENDMENTS ACCEPTED

7. Of the 74 Parliament amendments, the Council accepted the following 25, some of them in

substance, partially or in principle.

Recitals

Amendment 3: recalls that the European Parliament called for incentives to encourage a shift
towards efficient energy production plants, including combined heat and power (recital 3).

C 258 E/16

EN

Official Journal of the European Union

28.10.2003

Amendment 10: recalls that for the improvement of the energy performance of new buildings with a
surface of more than 1 000 m2, the consideration of alternative systems, such as CHP, should be
taken into account before the construction starts (recital 9).

Amendment 12: specifies that criteria are set up to determine and assess the energy efficiency of
cogeneration (recital 13).

Amendment 15 (partially): deletes the reference to a 50 MW threshold value for the possible benefit
of public support measures (recital 24).

Amendment 69 (partially): clarifies that the long-term objective of the Directive,
i.e. the estab-
lishment of a harmonised calculation of electricity from cogeneration, should be pursued taking
into account methodologies such as those under development by European standardisation organi-
sations. This is also coherent with amendments 13 and 78 (recital 14).

Amendment 18: the deletion of reference to three different categories of cogeneration defined in
terms of temperature levels is coherent with amendment 22 (recital 30).

Articles

Amendment 20 (partially): specifies that the purpose of the Directive is to increase energy efficiency
and improve security of supply by creating a framework for promotion and development of high-
efficiency cogeneration of heat and power based on useful heat demand and primary energy savings
(Article 1).

Amendments 22, 26 and 27: the deletion of the definitions of industrial heating and agricultural
cogeneration, as well as of the definitions of district heating and cooling clarifies the definition of the
cogeneration process (Article 3).

Amendment 24: clarifies that the definition of ‘useful heat’ shall mean heat produced in a cogen-
eration process to satisfy an economically justifiable demand for heat or cooling.

Amendments 41 and 42 (partially): specify that the Commission shall establish harmonised reference
values for separate production of electricity and heat, in accordance with the comitology procedure
provided for in the Directive (Articles 4(1), 11 and 13).

Amendment 58: deletion of Member States' obligation to set efficiency reference values and prin-
ciples for defining national efficiency reference values for separate production of heat and electricity
(Article 10).

Amendment 62: deletes the reference to possible further harmonisation of the criteria for deter-
mining the efficiency of cogeneration (Article 11).

Amendment 63: establishes a comitology procedure for review and adaptation purposes (Article 14).

Amendment 68: specifies details in the calculation methodology of the overall efficiency (Annex
II(c)); this amendment is also in line with amendment 69 (see recital 14).

Amendment 45: specifies the content of the analysis of national potentials for high-efficiency
cogeneration (Annex IV(a)).

Amendment 73: is consistent with Amendment 22 (Annex IV(a)).

Amendment 46: provides for an assessment of the cost-effectiveness, in terms of primary energy
savings, of increasing the share of high-efficiency cogeneration in the national energy mix (Annex
IV(b)).

Amendment 48: specifies that the analysis of national cogeneration potentials shall be made in
relation to different timeframes and include, where feasible, appropriate cost estimates for each of
the timeframes (Annex IV(c)).

28.10.2003

EN

Official Journal of the European Union

C 258 E/17

V. AMENDMENTS NOT INTEGRATED

8. The Council considered that amendments 1, 2, 5 to 9, 11, 14, 16 to 17, 19, 21, 23, 83, 25, 28, 29,
31, 32, 33, 34 to 38, 40, 43, 44, 47, 49, 50, 51, 52, 54 to 57, 60, 61, 64 to 67, 70, 84, 85, 71,
72, 74 were either not consistent with the Directive (e.g. 1, 11, 14, 21, 25, 28, 29, 31, 32, 33, 34,
55, 56, 67, 70, 71), too restrictive (e.g. 17, 36, 37, 47, 57, 60), try to impose national targets (e.g. 5,
6, 7, 8, 9, 19, 43, 84, 49), not consistent with the scope of the Directive (e.g. 2, 15, 16, 50, 54, 64,
65, 66, 72, 74), or already covered by existing provisions (e.g. 23, 83, 35, 38, 40, 44, 51, 52, 58,
61), and decided therefore not to integrate them in its common position. The Commission has
rejected amendments 1, 2, 5, 7, 8, 9, 11, 14, 16, 20, 21, 29, 31, 38, 41, 43, 49, 51, 52, 56, 70, 72,
74, 84 and 85.