Common Position (EC) No 34/2005 of 23 September 2005 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 the adoption of a Directive of the European Parliament and of the Council on energy end-use efficiency and energy services and repealing Council Directive 93/76/EEC
Date: 2005-09-23
Institutions: Council of the European Union
Subjects: EU policy, energy consumption, energy efficiency, energy policy, energy saving

8.11.2005

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COMMON POSITION (EC) No 34/2005

adopted by the Council on 23 September 2005

with a view to the adoption of a Directive 2005/…/EC of the European Parliament and of the
Council of … on energy end-use efficiency and energy services and repealing Council Directive
93/76/EEC

(2005/C 275 E/02)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EURO-
PEAN UNION,

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

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Economic and
Social Committee (1),

(4)

Having regard to the opinion of
Regions (2),

the Committee of

the

Acting in accordance with the procedure laid down in Article
251 of the Treaty (3),

Whereas:

(1)

(2)

In the European Community there is a need for
improved energy end-use efficiency, managed demand
for energy and promotion of the production of renew-
able energy, as there is relatively limited scope for any
other influence on energy supply and distribution condi-
tions in the short to medium term, either through the
building of new capacity or through the improvement of
transmission and distribution. This Directive thus contri-
butes to improved security of supply.

Improved energy end-use efficiency will also contribute
to the reduction of primary energy consumption and to
the mitigation of CO2 and other greenhouse gas emis-
sions. These emissions continue to increase, making it
more and more difficult to meet the Kyoto commit-
ments. Human activities attributed to the energy sector
cause as much as 78 % of the Community greenhouse
gas emissions. The Sixth Community Environment
Action Programme,
down by Decision No
1600/2002/EC of the European Parliament and of the
Council (4), envisages that further reductions are required
to achieve the United Nations Framework Convention
on Climate Change long-term objective of stabilising
greenhouse gas concentrations in the atmosphere at a
level that would prevent dangerous anthropogenic inter-
ference with the climate system.

laid

(3)

Improved energy end-use efficiency will make it possible
to exploit potential cost-effective energy savings in an
economically efficient way. Energy efficiency improve-

(1) OJ C 120, 20.5.2005, p. 115.
(2) OJ C 318, 22.12.2004, p. 19.
(3) Opinion of

the European Parliament of 7 June 2005 (not yet
published in the Official Journal), Council common position of 23
September 2005 and position of the European Parliament of …
(not yet published in the Official Journal).

(4) OJ L 242, 10.9.2002, p. 1.

ment measures could realise these energy savings and
thus help the European Community reduce its depen-
dence on energy imports. Furthermore, a move towards
more energy-efficient technologies can boost the Euro-
pean Community's innovativeness and competitiveness
as underlined in the Lisbon strategy.

The Communication from the Commission on the
implementation of
the European
Climate Change Programme listed a directive on energy
demand management as one of
the priority climate
change measures to be taken at Community level.

the first phase of

This Directive is consistent with Directive 2003/54/EC
of the European Parliament and of the Council of 26
June 2003 concerning common rules for the internal
market in electricity and repealing Directive 96/92/EC (5)
and with Directive 2003/55/EC of the European Parlia-
ment and of the Council of 26 June 2003 concerning
common rules for the internal market in natural gas and
repealing Directive 98/30/EC (6), which provide for the
possibility of using energy efficiency and demand-side
management as alternatives to new supply and for envir-
onmental protection, allowing Member State authorities,
inter alia, to tender for new capacity or to opt for energy
efficiency and demand-side measures, including systems
for white certificates.

This Directive is without prejudice to Article 3 of Direc-
tive 2003/54/EC, which requires that Member States
ensure that all household customers and, where Member
States deem it appropriate,
small enterprises, enjoy
universal service, that is the right to be supplied with
electricity of a specified quality within their territory at
reasonable, easily and clearly comparable and trans-
parent prices.

The liberalisation of the retail markets for final custo-
mers for electricity, natural gas, coal and lignite, heating,
and in some cases even district heating and cooling, has
almost exclusively led to improved efficiency and lower
transformation and
costs on the energy generation,
distribution side. This liberalisation has not led to signifi-
cant competition in products and services which could
have resulted in improved energy efficiency on the
demand side.

(5)

(6)

(7)

(5) OJ L 176, 15.7.2003, p. 37. Directive as amended by Council Direc-

tive 2004/85/EC (OJ L 236, 7.7.2004, p. 10).

(6) OJ L 176, 15.7.2003, p. 57.

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In its Resolution of 7 December 1998 on energy effi-
ciency in the European Community (1),
the Council
endorsed a target for the Community as a whole to
improve energy intensity of final consumption by an
additional one percentage point per annum up to the
year 2010.

product manufacturing, illumination and motive power.
Profit maximisation for energy distributors, distribution
system operators and retail energy sales companies thus
becomes more closely related to selling energy services
to as many customers as possible than to selling as
much energy as possible to each customer.

(8)

(9)

(10)

Member States should therefore adopt national indicative
targets to promote energy end-use efficiency and to
ensure the continued growth and viability of the market
for energy services, and thus contribute to the imple-
the Lisbon strategy. The adoption of
mentation of
national
indicative targets to promote energy end-use
efficiency provides effective synergy with other Com-
munity legislation that will, when applied, contribute to
the achievement of these national targets.

This Directive requires action to be undertaken by the
Member States, with the fulfilment of
its objectives
depending on the effects that such action has on the
final consumers of energy. The end result of Member
States' action is dependent on many external
factors
which influence the behaviour of consumers as regards
their energy use and their willingness to implement
energy saving methods and use energy saving devices.
Therefore, even though Member States commit them-
selves to making efforts to achieve the target figure of
6 %, the national energy savings target is indicative in
nature and entails no legally enforceable obligation for
Member States to achieve it.

(11) When striving for energy efficiency on the basis of tech-
changes,
impact should be

behavioural
nological,
substantial negative environmental
avoided, and social priorities should be respected.

economic

and/or

(12)

(13)

(14)

(15)

Improved energy end-use efficiency can be achieved by
increasing the availability of and demand for energy
services or by other energy efficiency improvement
measures.

In order to realise the energy savings potential in certain
market segments where energy audits are generally not
sold commercially, such as households, Member States
should ensure the availability of energy audits.

The Council conclusions of 5 December 2000 list the
promotion of energy services through the development
of a Community strategy as a priority area for action to
improve energy efficiency.

Energy distributors, distribution system operators and
retail energy sales companies can improve energy effi-
ciency in the European Community if the energy services
they market include efficient end-use, such as indoor
refrigeration,
thermal comfort, domestic hot water,

(1) OJ C 394, 17.12.1998, p. 1.

(16)

Taking full account of
the national organisation of
market actors in the energy sector and in order to
favour the implementation of energy services and of the
measures to improve energy efficiency provided for in
this Directive, Member States should have the option of
making it compulsory for energy distributors, distribu-
tion system operators or retail energy sales companies
or, where appropriate, for two or all of these market
actors, to provide such services and to participate in
such measures.

(17) An innovative practice that should be stimulated is the
use of third party financing arrangements. In these, the
beneficiary avoids investment costs by using part of the
financial value of energy savings that result from third
party's investment to repay the third party's investment
and interest costs.

(18) With a view to making tariffs and other regulations for
net-bound energy more conducive to efficient energy
end-use, unjustifiable volume-driving incentives should
be removed.

(19) A good example regarding investments, maintenance
and other expenditure for energy-using equipment,
energy services and other energy efficiency measures
should be set by the public sector in each Member State.
Therefore, the public sector should be encouraged to
integrate energy efficiency improvement considerations
into their investments, depreciation allowances and oper-
ating budgets. In view of the fact that administrative
structures vary widely between Member States,
the
different types of measures which the public sector may
take should be taken at
the appropriate national,
regional and/or local level.

(20)

The energy services, energy efficiency improvement
programmes and other energy efficiency improvement
measures put into effect to reach the energy savings
target may be supported and/or implemented through
voluntary agreements between stakeholders and public
sector bodies appointed by the Member States.

(21)

In defining energy efficiency improvement measures,
account should be taken of efficiency gains obtained
through the widespread use of cost-effective technolo-
gical innovations, for instance electronic metering.

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(22)

In order to enable final consumers to make better-
informed decisions as regards their individual energy
consumption, they should be provided with a reasonable
amount of information thereon and with other relevant
information, such as information on available energy
efficiency improvement measures, comparative final
consumer profiles or objective technical specifications
for energy-using equipment, which may include 'Factor
Four' or similar equipment.

(23) With the adoption of

this Directive, all substantive
provisions of Council Directive 93/76/EEC of 13
September 1993 to limit carbon dioxide emissions by
improving energy efficiency (SAVE) (1) are covered by
other Community legislation and therefore Directive
93/76/EEC should be repealed.

(24)

Since the objectives of this Directive, namely to promote
energy end-use efficiency and to develop a market for
energy services, cannot be sufficiently achieved by the
Member States and can be better achieved at Community
level, the Community may adopt measures, in accord-
ance with the principle of subsidiarity as set out in
Article 5 of the Treaty. In accordance with the principle
of proportionality, as set out in that Article, this Direc-
tive does not go beyond what is necessary in order to
achieve those objectives.

(b) creating the conditions for the development of a market for
energy services and for the delivery of other energy effi-
ciency improvement measures to final consumers.

Article 2

Scope

This Directive shall apply to:

(a) providers of energy efficiency improvement measures,
including energy distributors, distribution system operators
and retail energy sales companies. However, Member States
may exclude small distributors, small distribution system
operators and small retail energy sales companies from the
application of Articles 6 and 13;

(b) final customers. However, this Directive shall not apply to
those undertakings involved in categories of activities listed
in Annex I to Directive 2003/87/EC of the European Parlia-
ment and of the Council of 13 October 2003 establishing a
scheme for greenhouse gas emission allowance trading
within the Community and amending Council Directive
96/61/EC (3) and to those parts of transport undertakings
based primarily on the use of aviation and maritime bunker
fuels;

(25)

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 for the exercise of implementing powers
conferred on the Commission (2),

(c) the armed forces, only to the extent that its application
does not cause any conflict with the nature and primary
aim of the activities of the armed forces and with the
exception of material used exclusively
for military
purposes.

HAVE ADOPTED THIS DIRECTIVE:

CHAPTER I

SUBJECT MATTER AND SCOPE

Article 1

Purpose

The purpose of this Directive is to enhance the cost-effective
improvement of energy end-use efficiency in the Member
States by:

(a) providing the necessary indicative targets as well as
mechanisms, incentives and institutional, financial and legal
frameworks to remove existing market barriers and imper-
fections that impede the efficient end use of energy;

(1) OJ L 237, 22.9.1993, p. 28.
(2) OJ L 184, 17.7.1999, p. 23.

Article 3

Definitions

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

(a) ‘energy’: all

forms of commercially available energy,
(including liquefied
including electricity, natural gas
natural gas and liquefied petroleum gas), any fuel
for
heating and cooling (including district heating and
cooling), coal and lignite, peat, transport fuels (excluding
aviation and maritime bunker
fuels) and biomass as
defined in Directive 2001/77/EC of the European Parlia-
ment and of the Council of 27 September 2001 on the
promotion of
from renewable
electricity produced
energy sources in the internal electricity market (4);

(b) ‘energy efficiency’: a ratio between an output of perfor-
mance, service, goods or energy, and an input of energy;

(c) ‘energy efficiency improvement’: an increase in energy
end-use efficiency as a result of technological, behavioural
and/or economic changes;

(3) OJ L 275, 25.10.2003, p. 32. Directive as amended by Directive

2004/101/EC (OJ L 338, 13.11.2004, p. 18).

(4) OJ L 283, 27.10.2001, p. 33. Directive as amended by the 2003

Act of Accession.

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(d) ‘energy savings’: an amount of saved energy determined by
measuring and/or estimating consumption before and after
implementation of one or more energy efficiency improve-
ment measures, whilst ensuring normalisation for external
conditions that affect energy consumption;

(e) ‘energy service’:

the physical benefit, utility or good
derived from a combination of energy and energy efficient
technology, which may include the operations, mainte-
nance and control necessary to deliver the service, which
is delivered on the basis of a contract and normally leads
to verifiable and measurable or estimable energy efficiency
improvement;

(f) ‘energy efficiency mechanisms’: general

instruments used
by governments or government bodies to create a suppor-
tive framework or incentives for market actors to provide
and purchase energy services and other energy efficiency
improvement measures;

(g) ‘energy efficiency improvement programmes’: activities
that focus on groups of final customers and that normally
lead to verifiable and measurable or estimable energy effi-
ciency improvement;

(h) ‘energy efficiency improvement measures’: all actions that
normally lead to verifiable and measurable or estimable
energy efficiency improvement;

(i) ‘energy service company’ (ESCO): a natural or legal person
that delivers energy services and/or other energy efficiency
improvement measures in a user's facility or premises, and
accepts some degree of financial risk in so doing. The
payment for the services delivered is based (either wholly
or
in part) on the achievement of energy efficiency
improvements and on the meeting of the other agreed
performance criteria;

(j) ‘energy performance contracting’

(EPC): a contractual
arrangement between the beneficiary and the provider
(normally an ESCO) of an energy efficiency improvement
measure, where investments in that measure are paid for
in relation to a contractually agreed level of energy effi-
ciency improvement;

(k) ‘third-party financing’: a contractual arrangement involving
a third party — in addition to the energy supplier and the
beneficiary of the energy efficiency improvement measure
— that provides the capital for that measure and charges
the beneficiary a fee equivalent to a part of the energy
savings achieved as a result of
the energy efficiency
improvement measure. This third party may or may not
be an ESCO;

(m) ‘financial

instruments for energy savings’: all

financial
instruments such as funds, subsidies, tax rebates,
loans,
third-party financing, energy performance contracting,
guarantee of energy savings contracts, energy outsourcing
and other related contracts that are made available to the
market place by public or private bodies in order to cover
partly or totally the initial project cost for implementing
energy efficiency improvement measures;

(n) ‘final customer’: a natural or legal person that purchases

energy for his own end use;

(o) ‘energy distributor’: a natural or legal person responsible
for transporting energy with a view to its delivery to final
customers and to distribution stations that sell energy to
final customers. This definition excludes electricity and
natural gas distribution system operators, covered in point
(p);

(p) ‘distribution system operator’: a natural or legal person
responsible for operating, ensuring the maintenance of
if necessary, developing the distribution system of
and,
electricity or natural gas in a given area and, where applic-
its interconnections with other systems, and for
able,
ensuring the long term ability of
the system to meet
reasonable demands for the distribution of electricity or
natural gas;

(q) ‘retail energy sales company’: a natural or legal person that

sells energy to final customers;

(r) ‘small distributor, small distribution system operator and
small retail energy sales company’: a natural or legal
person that distributes or sells energy to final customers,
and that distributes or sells less than the equivalent of 100
GWh energy per year or employs fewer than 10 persons
or whose annual turnover and/or annual balance sheet
total does not exceed EUR 2 million. The distribution or
sales of transport fuels shall be considered separately from
that of other forms of energy when applying these thresh-
olds;

(s) ‘white certificates’: certificates issued by independent certi-
fying bodies confirming the energy savings claims of
market actors as a consequence of energy efficiency
improvement measures.

CHAPTER II

ENERGY SAVINGS TARGETS

Article 4

General target

(l) ‘energy audit’: a systematic procedure to obtain adequate
knowledge of the existing energy consumption profile of a
building or group of buildings, of an industrial operation
and/or installation or of a private or public service, identify
and quantify cost-effective energy savings opportunities,
and report the findings;

1. Member States shall adopt and aim to achieve an overall
national indicative energy savings target of 6 % for the sixth
year of application of this Directive, to be reached by way of
energy services and other energy efficiency improvement
measures. Member States shall take cost-effective, practicable
and reasonable measures designed to contribute towards
achieving this target.

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This national indicative energy savings target shall be set and
calculated in accordance with the provisions and methodology
set out in Annex I. For purposes of comparison of energy
savings and for conversion to a comparable unit, the conver-
sion factors set out in Annex II shall apply unless the use of
other conversion factors can be justified. Examples of eligible
energy efficiency improvement measures are given in Annex
III. A general framework for the measurement and verification
of energy savings is given in Annex IV.

2.
For the purpose of the first report to be submitted in
accordance with Article 14, Member States shall establish an
intermediate national indicative energy savings target for the
third year of application of this Directive. This intermediate
target shall be realistic and consistent with the overall national
indicative energy savings target referred to in paragraph 1.

3. Member States shall assign to one or more new or
existing authorities or agencies the overall control and respon-
sibility for overseeing the framework set up in relation to the
target mentioned in paragraph 1. These bodies shall thereafter
verify the energy savings as a result of energy services and
other
including
existing national energy efficiency measures, and report the
results.

energy efficiency improvement measures,

4.
After having reviewed and reported on the first three
years of application of this Directive, the Commission shall
examine whether it is appropriate to come forward with a
proposal for a directive to further develop the market approach
in energy efficiency improvement by means of white certifi-
cates.

Article 5

Energy end-use efficiency in the public sector

CHAPTER III

PROMOTION OF ENERGY END-USE EFFICIENCY AND ENERGY
SERVICES

Article 6

Energy distributors, distribution system operators and
retail energy sales companies

1. Member States shall ensure that energy distributors, distri-
bution system operators and/or retail energy sales companies:

(a) provide on request, but not more than once a year, aggre-
gated statistical information on their final customers to the
authorities or agencies referred to in Article 4(3) or to
another designated body, provided that the latter in turn
transmits the received information to the former. This
information shall be sufficient
to properly design and
implement energy efficiency improvement programmes,
and to promote and monitor energy services and other
energy efficiency improvement measures. It may include
historical information and shall include current information
on end-user consumption, including, where applicable, load
profiles, customer segmentation and geographical location
of customers, while preserving the integrity and confidenti-
ality of information that is either of private character or
commercially sensitive, in conformity with applicable Com-
munity legislation;

(b) refrain from any activities that might impede the demand
for and delivery of energy services and other energy effi-
ciency improvement measures, or hinder the development
of markets for energy services and other energy efficiency
improvement measures. The Member State concerned shall
take the necessary measures to bring such activities to an
end where they occur.

1. Member States shall ensure that the public sector fulfils
an exemplary role in the context of this Directive.

2. Member States shall:

To that end, they shall ensure that one or more energy effi-
ciency improvement measures are taken by the public sector,
focussing on cost-effective measures which generate the largest
energy savings in the shortest span of time. Such measures
shall be taken at the appropriate national, regional and/or local
level, and may consist of legislative initiatives and/or voluntary
agreements or other
schemes with an equivalent effect.
Without prejudice to the national and Community public
procurement legislation, such measures may be chosen from
the indicative list set out in Annex V. In the reports referred to
in Article 14, Member States shall monitor the performance of
the public sector in relation to the national indicative energy
savings target.

(a) choose one or more of the following requirements that
have to be complied with by energy distributors, distribu-
tion system operators and/or retail energy sales companies,
directly and/or indirectly through other providers of energy
services or energy efficiency improvement measures:

(i) ensure the offer to their

final customers and the

promotion of competitively priced energy services; or

(ii) ensure the availability to their final customers and the
promotion of
competitively priced energy audits
conducted in an independent manner and/or energy
efficiency improvement measures, in accordance with
Article 9(2) and Article 12; or

2. Member States shall assign to a new or existing organisa-
tion or organisations the administrative, management and
implementing responsibility for the integration of energy effi-
ciency improvement requirements as set out in paragraph 1.
These may be the same authorities or agencies referred to in
Article 4(3).

(iii) contribute to the funds and funding mechanisms
referred to in Article 11. The level of such contribu-
tions shall as a minimum correspond to the estimated
costs of offering any of the activities referred to in this
paragraph and shall be agreed with the authorities or
agencies referred to in Article 4(3); and/or

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(b) ensure that voluntary agreements and/or other market-
oriented schemes, such as white certificates, with an equiva-
lent effect to one or more of the requirements referred to
in point (a) exist or are set up. These voluntary agreements
shall be supervised and followed up by the Member State
concerned in order to ensure that they have in practice an
equivalent effect
the requirements
to one or more of
referred to in point (a).

3. Member States shall ensure that there are sufficient incen-
tives, equal competition and level playing fields for market
actors other than energy distributors, distribution system opera-
tors and/or retail energy sales companies, such as ESCOs,
energy equipment installers, energy advisors and energy consul-
tants,
the energy
services, energy audits and energy efficiency improvement
measures described in paragraph 2(a)(ii).

to independently offer and implement

4.
Under paragraphs 2 and 3, Member States may place
responsibilities on distribution system operators only if this is
consistent with the requirements relating to the unbundling of
accounts laid down in Article 19(3) of Directive 2003/54/EC
and in Article 17(3) of Directive 2003/55/EC.

5.
The implementation of this Article shall be without preju-
dice to derogations or exemptions granted under Directives
2003/54/EC and 2003/55/EC.

Article 7

Availability of information

energy services or other
measures.

energy efficiency improvement

2. Member States shall make available model contracts for
those financial instruments to existing and potential purchasers
of energy services and other energy efficiency improvement
measures in the public and private sectors. These may be issued
by the authority or agency referred to in Article 4(3).

Article 10

Energy efficient

tariffs and other regulations for net-

bound energy

1. Member States shall ensure the removal of those incen-
tives in transmission and distribution tariffs that unnecessarily
increase the volume of distributed or transmitted energy. In
in accordance with Article 3(2) of Directive
this respect,
2003/54/EC and with Article 3(2) of Directive 2003/55/EC,
Member States may impose public service obligations relating
to energy efficiency on undertakings operating, respectively, in
the electricity and gas sectors.

2. Member States may permit components of schemes and
tariff structures with a social aim, provided that any disruptive
effects on the transmission and distribution system are kept to
the minimum necessary and are not disproportionate to the
social aim.

Member States shall ensure that information on energy effi-
ciency mechanisms and financial and legal frameworks adopted
with the aim of reaching the national indicative energy savings
target is transparent and widely disseminated to the relevant
market actors.

Article 11

Funds and funding mechanisms

Article 8

Availability of qualification, accreditation and certification
schemes

With a view to achieving a high level of technical competence,
objectivity and reliability, Member States shall ensure, where
they deem it necessary, the availability of appropriate qualifica-
tion, accreditation and/or certification schemes for providers of
energy services, energy audits and energy efficiency improve-
ment measures as referred to in Article 6(2)(a)(ii).

Article 9

Financial instruments for energy savings

1. Member States shall repeal or amend national legislation
and regulations, other than those of a clearly fiscal nature, that
unnecessarily or disproportionately impede or restrict the use
of financial instruments for energy savings in the market for

1. Without prejudice to Articles 87 and 88 of the Treaty,
Member States may establish a fund or funds to subsidise the
delivery of energy efficiency improvement programmes and
other energy efficiency improvement measures and to promote
the development of a market for energy efficiency improve-
ment measures. These measures shall include the promotion of
energy auditing, financial instruments for energy savings and,
where appropriate, improved metering and informative billing.
The funds shall also target end-use sectors with higher transac-
tion costs and higher risks.

2.
loans,
If established, the funds may provide for grants,
financial guarantees and/or other types of financing that guar-
antee results.

The funds shall be open to all providers of energy effi-
3.
independent
ciency improvement measures, such as ESCOs,
energy advisors, energy distributors, distribution system opera-
tors, retail energy sales companies and installers. Member States
may decide to open the funds to all final customers. Tendering
or equivalent methods which ensure complete transparency
shall be carried out in full compliance with applicable public
procurement regulations. Member States shall ensure that such
funds complement, and do not compete with, commercially-
financed energy efficiency improvement measures.

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Article 12

Energy audits

1. Member States shall ensure the availability of efficient,
high quality energy audit schemes which are designed to iden-
tify potential energy efficiency improvement measures and
which are carried out in an independent manner, to all final
consumers, including smaller domestic, commercial and small
and medium-sized industrial customers.

2. Market segments that have higher transaction costs and
non-complex facilities may be reached by other measures such
as questionnaires and computer programmes made available on
the Internet and/or sent to customers by mail. Member States
shall ensure the availability of energy audits
for market
segments where they are not sold commercially, taking into
account Article 11(1).

the European Parliament and of

Certification in accordance with Article 7 of Direc-
3.
tive 2002/91/EC of
the
Council of 16 December 2002 on the energy performance of
buildings (1) shall be regarded as equivalent to an energy audit
meeting the requirements set out in paragraphs 1 and 2 of this
Article and as equivalent to an energy efficiency improvement
measure as referred to in Annex V to this Directive. Further-
more, audits resulting from schemes based on voluntary agree-
ments between organisations of stakeholders and a body
appointed, supervised and followed up by the Member State
concerned shall likewise be considered as having fulfilled the
requirements set out in paragraphs 1 and 2.

3. Member States shall ensure that, where appropriate, the
following information is made available to final customers in
clear and understandable terms by energy distributors, distribu-
tion system operators or retail energy sales companies in or
with their bills, contracts, transactions, and/or receipts at distri-
bution stations:

(a) current actual prices and actual consumption of energy;

(b) comparisons of

energy
consumption with consumption for the same period in the
previous year, preferably in graphical form;

customer's

current

final

the

(c) wherever possible and useful, comparisons with an average
normalised or benchmarked user of energy of the same
user category;

(d) contact information for consumers' organisations, energy
agencies or similar bodies,
including website addresses,
from which information may be obtained on available
energy efficiency improvement measures, comparative end-
user profiles and/or objective technical specifications for
energy-using equipment.

CHAPTER IV

FINAL PROVISIONS

Article 14

Reports

Article 13

Metering and informative billing of energy consumption

1. Member States shall ensure that, in so far as it is techni-
cally possible, financially reasonable and proportionate in rela-
tion to the potential energy savings, final customers for electri-
city, natural gas, district heating and/or cooling and domestic
hot water are provided with competitively priced individual
meters that accurately reflect the final customer's actual energy
consumption and that provide information on actual time of
use.

2. Member States shall ensure that, where appropriate,
billing performed by energy distributors, distribution system
operators and retail energy sales companies is based on actual
energy consumption, and is presented in clear and understand-
able terms. Appropriate information shall be made available
with the bill to provide final customers with a comprehensive
account of current energy costs. Where appropriate, depending
on the amount of energy consumption of
the customer
concerned, billing shall be performed frequently enough to
enable customers to regulate their own energy consumption.

(1) OJ L 1, 4.1.2003, p. 65.

1. Member States that already use, for whatever purpose,
calculation methods for measuring energy savings similar to
the types described in Annex IV at the time of the entry into
force of this Directive, may submit information at the appro-
priate level of detail to the Commission. Such submissions shall
take place as soon as possible, preferably not later than … (*).
This information shall enable the Commission to take due
account of existing practices.

2.
Not later than … (**), Member States shall submit to the
Commission an interim report on the overall administration
and implementation of this Directive. The report shall include
information on the measures taken or planned. A final report
showing progress in the period of six years after … (***) shall
be submitted to the Commission not later than … (****). The
interim report shall be based on available data, supplemented
with estimates, and shall
the estimated
include,
progress to date with respect to the intermediate national indi-
cative energy savings target set out in Article 4(2) and to the
aim set out in Article 5(1). The final report shall include defini-
tive results with regard to the fulfilment of the overall national
indicative energy savings target set out in Article 4(1) and to
the aim set out in Article 5(1).

inter alia,

(*) Six months after the date of entry into force of this Directive.
(**) Five years after the date of entry into force of this Directive.
(***) Two years after the date of entry into force of this Directive.
(****) 10 years after the date of entry into force of this Directive.

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On the basis of the Member States'

interim and final
3.
reports,
to which
the Commission shall assess the extent
Member States have made progress towards achieving their
national indicative energy savings target. The Commission shall
publish a report with its conclusions on the first
interim
reports not later than … (*). Not later than one year after
receipt of the final reports from Member States, the Commis-
sion shall publish its conclusions in a final report. These
reports shall be accompanied, as appropriate and where neces-
sary, by proposals to the European Parliament and to the
Council for additional measures including a possible extension
of the period of validity of the targets set out in this Directive.

Article 15

Review and adaptation of the framework

The values and calculation methods

1.
referred to in
Annexes II, III and IV shall be adapted to technical progress in
accordance with the procedure referred to in Article 16(2).

Until … (**), the Commission,

in accordance with the
2.
procedure referred to in Article 16(2), shall further refine and
complement as required points 2 to 6 of Annex IV, whilst
respecting the general framework set out in Annex IV.

After … (***), the Commission, in accordance with the
3.
procedure referred to in Article 16(2), may decide to raise the
percentage of harmonised bottom-up calculations used in the
harmonised calculation model referred to in point 1 of Annex
IV without prejudice to Member State schemes that already
take the
have a higher percentage. The Commission shall
following factors into account and justify its decision accord-
ingly:

(a) experience with the harmonised calculation model during

its first years of application;

(b) expected potential increase in accuracy as a result of repla-
cing a part of the top-down calculations with bottom-up
calculations;

(c) estimated potential

added cost

and/or

administrative

burden.

If the Commission thus decides to increase the percentage
of harmonised bottom-up calculations, the new harmonised
calculation model shall first be used as from … (****)

Article 16

Committee

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 17

Repeal

Directive 93/76/EEC shall be repealed.

Article 18

Transposition

1. Member States shall bring into force the laws, regulations
and administrative provisions necessary to comply with this
Directive before … (*****). They shall
forthwith inform the
Commission thereof.

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

2. Member States shall communicate to the Commission the
text of the main provisions of national law which they adopt in
the field covered by this Directive.

Article 19

Entry into force

This Directive shall enter into force on the 20th day following
its publication in the Official Journal of the European Union.

Article 20

Addressees

This Directive is addressed to the Member States.

Done at Brussels,

For the European Parliament

The President

…

For the Council

The President

…

(*) Six years after the date of entry into force of this Directive.
(**) 18 months after the date of entry into force of this Directive.
(***) Three years after the date of entry into force of this Directive.
(****) Four years after the date of entry into force of this Directive.

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

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METHODOLOGY FOR CALCULATING THE NATIONAL INDICATIVE ENERGY SAVINGS TARGET

ANNEX I

The methodology used for calculating the national indicative energy savings target set out in Article 4 shall be the
following:

1. Member States shall use the annual final inland energy consumption of all energy users within the scope of this
Directive for the most recent six-year period previous to the implementation of this Directive for which official data
are available, to calculate an annual average amount of consumption. This final energy consumption shall be the
amount of energy distributed or sold to final customers during the six-year period, not adjusted for degree days,
structural changes or production changes.

On the basis of this annual average amount of consumption, the national indicative energy savings target shall be
calculated once and the resulting absolute amount of energy to be saved applied for the total duration of this Direc-
tive.

The national indicative energy savings target shall:

(a) consist of 6 % of the annual average amount of consumption referred to above;

(b) be measured after the sixth year of application of this Directive;

(c) be the result of cumulative annual energy savings achieved throughout the six-year application period of this

Directive;

(d) be reached by way of energy services and other energy efficiency improvement measures.

This methodology for measuring energy savings ensures that the total energy savings prescribed by this Directive
is a fixed amount, and is thus independent of future GDP growth and of any future increase in energy consump-
tion.

2. The national indicative energy savings target shall be expressed in absolute terms in GWh, or equivalent, calculated

according to Annex II.

3. Energy savings in a particular year following the entry into force of this Directive that result from energy efficiency
improvement measures initiated in a previous year not earlier than 1995 and that have a lasting effect may be taken
into account in the calculation of the annual energy savings. In certain cases, where circumstances can justify it,
measures initiated before 1995 but not earlier than 1991 may be taken into account. In all cases, the resulting
energy savings must still be verifiable and measurable or estimable, in accordance with the general framework in
Annex IV.

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ANNEX II

ENERGY CONTENT OF SELECTED FUELS FOR END USE — CONVERSION TABLE (1)

Energy commodity

kJ (NCV)

kgoe (NCV)

kWh (NCV)

1 kg coke

1 kg hard coal

28 500

0,676

7,917

17 200 — 30 700

0,411 — 0,733

4,778 — 8,528

1 kg brown coal briquettes

20 000

0,478

5,556

1 kg black lignite

1 kg brown coal

1 kg oil shale

1 kg peat

10 500 — 21 000

0,251 — 0,502

2,917 — 5,833

5 600 — 10 500

0,134 — 0,251

1,556 — 2,917

8 000 — 9 000

0,191 — 0,215

2,222 — 2,500

7 800 — 13 800

0,186 — 0,330

2,167 — 3,833

1 kg peat briquettes

16 000 — 16 800

0,382 — 0,401

4,444 — 4,667

1 kg residual fuel oil (heavy oil)

1 kg light fuel oil

1 kg motor spirit (petrol)

1 kg paraffin

1 kg LPG

1 kg natural gas (2)

1 kg LNG

1 kg wood (25 % humidity) (3)

1 kg pellets/wood bricks

1 kg waste

1 MJ derived heat

1 kWh electrical energy

40 000

42 300

44 000

40 000

46 000

4 7200

45190

13800

16800

0,955

1,010

1,051

0,955

1,099

1,126

1,079

0,330

0,401

11,111

11,750

12,222

11,111

12,778

13,10

12,553

3,833

4,667

7400 — 10700

0,177 — 0,256

2,056 — 2,972

1000

3600

0,024

0,086

0,278

1 (4)

(1) Member States may apply different conversion factors if these can be justified.
(2) 93 % methane.
(3) Member States may apply other values depending on the type of wood most used in the Member State.
(4) For savings in kWh electricity Member States may apply a default coefficient of 2,5 reflecting the estimated 40 % average EU genera-

tion efficiency during the target period. Member States may apply a different coefficient provided they can justify it.

Source : Eurostat.

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INDICATIVE LIST OF EXAMPLES OF ELIGIBLE ENERGY EFFICIENCY IMPROVEMENT MEASURES

ANNEX III

This Annex provides examples of where energy efficiency improvement programmes and other energy efficiency
improvement measures may be developed and implemented in the context of Article 4.

To be taken into account, these energy efficiency improvement measures must result in energy savings that can be
clearly measured and verified or estimated according to the guidelines in Annex IV, and their impacts on energy savings
must not already be counted in other specific measures. The following lists are not exhaustive but are intended to
provide guidance.

Examples of eligible energy efficiency improvement measures:

Residential and tertiary sectors

(a) heating and cooling (e.g. heat pumps, new efficient boilers, installation/efficient update of district heating/cooling

systems);

(b) insulation and ventilation (e.g. wall cavity and roof insulation, double/triple glazing of windows);

(c) hot water (e.g. installation of new devices, direct and efficient use in space heating, washing machines);

(d) lighting (e.g. new efficient bulbs and ballasts, digital control systems, use of motion detectors for lighting systems in

commercial buildings);

(e) cooking and refrigeration (e.g. new efficient devices, heat recovery systems);

(f) other equipment and appliances (e.g. combined heat and power appliances, new efficient devices, time control for
optimised energy use, stand-by loss reduction, installation of capacitors to reduce reactive power, transformers with
low losses);

(g) domestic generation of renewable energy sources, whereby the amount of purchased energy is reduced (e.g. solar

thermal applications, domestic hot water, solar-assisted space heating and cooling);

Industry sector

(h) product manufacturing processes (e.g. more efficient use of compressed air, condensate and switches and valves, use

of automatic and integrated systems, efficient stand-by modes);

(i) motors and drives (e.g.

increase in the use of electronic controls, variable speed drives,

integrated application

programming, frequency conversion, electrical motor with high efficiency);

(j) fans, variable speed drives and ventilation (e.g. new devices/systems, use of natural ventilation);

(k) demand response management (e.g. load management, peak shaving control systems);

(l) high-efficiency cogeneration (e.g. combined heat and power appliances);

Transport sector

(m) mode of travel used (e.g. promotion of energy-efficient vehicles, energy-efficient use of vehicles including tyre pres-
sure adjustment schemes, energy efficiency devices and add-on devices for vehicles, fuel additives which improve
energy efficiency, high-lubricity oils and low-resistance tyres);

(n) modal shifts of travel (e.g. car free home/office transportation arrangements, car sharing, modal shifts from more

energy-consuming modes of transport to less energy-consuming ones, per passenger-km or tonne-km);

Cross-sectoral measures

(o) standards and norms that aim primarily at improving the energy efficiency of products and services, including build-

ings;

(p) energy labelling schemes;

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(q) metering, intelligent metering systems such as individual metering instruments managed by remote and informative

billing;

(r) training and education that lead to application of energy-efficient technology and/or techniques;

Horizontal measures

(s) regulations, taxes, etc. that have the effect of reducing energy end-use consumption;

(t) focused information campaigns that promote energy efficiency improvement and energy efficiency improvement

measures.

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GENERAL FRAMEWORK FOR MEASUREMENT AND VERIFICATION OF ENERGY SAVINGS

ANNEX IV

1.

Energy savings measurements and calculations and their normalisation

1.1. Measuring energy savings

G e n e r a l

In measuring the realised energy savings as set out in Article 4 with a view to capturing the overall improvement
in energy efficiency and to ascertaining the impact of individual measures, a harmonised calculation model which
uses a combination of top-down and bottom-up calculation methods shall be used to measure the annual improve-
ments in energy efficiency for the reports in Article 14.

In developing the harmonised calculation model in accordance with Article 15(2), the Committee shall aim to use,
to the extent possible, data which are already routinely provided by Eurostat and/or the national statistical agencies.

T op -dow n c a lc u la ti on s

A top-down calculation method means that the amount of energy savings is calculated using the national or larger-
scale aggregated sectoral levels of energy savings as the starting point. Adjustments of the annual data are then
made for extraneous factors such as degree days, structural changes, product mix, etc. to derive a measure that
gives a fair indication of total energy efficiency improvement, as described in point 1.2. This method does not
provide exact measurements at a detailed level nor does it show cause and effect relationships between measures
and their resulting energy savings. However, it is usually simpler and less costly and is often referred to as ‘energy
efficiency indicators’ because it gives an indication of developments.

In developing the top-down calculation method used in this harmonised calculation model, the Committee shall
base its work, to the extent possible, on existing methodologies such as the ODEX model (1).

B ottom- up c a lc ula tions

Part of the annual final inland energy consumption for sectors falling within the scope of this Directive shall be
covered by using a harmonised bottom-up model. In developing this harmonised bottom-up model in accordance
with Article 15(2), the Committee shall aim to use standardised methods which entail a minimum of administrative
burden and cost, notably by using the measurement methods referred to in points 2.1 and 2.2 and by focusing on
those sectors where the harmonised bottom-up model can be most cost-efficiently applied.

Member States that so wish may use further bottom-up measurements in addition to the part prescribed by the
harmonised bottom-up model subject to the agreement of the Commission, in accordance with the procedure
referred to in Article 16(2), on the basis of a description of the methodology presented by the Member State
concerned.

A bottom-up calculation method means that energy savings obtained through the implementation of a specific
energy efficiency improvement measure are measured in kilowatt-hours (kWh), in Joules (J) or in kilogram oil
equivalent (kgoe) and added together with energy savings results from other specific energy efficiency improvement
measures. The authorities or agencies referred to in Article 4(3) will ensure that double counting of energy savings,
which results from a combination of energy efficiency improvement measures (including mechanisms), is avoided.
For the bottom-up calculation method, data and methods referred to in points 2.1 and 2.2 may be used.

If bottom-up calculations are not available for certain sectors, top-down indicators or mixtures of top-down and
bottom-up calculations may be used in the reports to the Commission, subject to the agreement of the Commis-
sion, in accordance with the procedure referred to in Article 16(2). In particular, when assessing requests to this
effect within the context of the interim report described in Article 14(2), the Commission shall demonstrate the
appropriate flexibility. Some top-down calculations will be necessary to measure the impact of measures imple-
mented after 1995 (and in certain cases 1991) that continue to have impact.

(1) ODYSSEE-MURE Project, SAVE Programme. Commission 2005.

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1.2. How energy savings measurements should be normalised

Energy savings shall be determined by measuring and/or estimating consumption, before and after the implementa-
tion of the measure, while ensuring adjustment and normalisation for external conditions commonly affecting
energy use. Conditions commonly affecting energy use may also differ over time. Such conditions may be the likely
impact of one or several plausible factors such as:

(a) weather conditions, such as degree days;

(b) occupancy levels;

(c) opening hours for non-domestic buildings;

(d) installed equipment intensity (plant throughput); product mix;

(e) plant throughput, level of production, volume or added value, including changes in GDP level;

(f) using schedule for installation and vehicles;

(g) relationship with other units.

2. Data and methods that may be used (measurability)

Several methods for collecting data to measure and/or estimate energy savings exist. At the time of the evaluation
of an energy service or energy efficiency improvement measure, it will often be impossible to rely only on measure-
ments. A distinction is therefore made between methods measuring energy savings and methods estimating energy
savings, where the latter is the more common practice.

2.1. Data and methods based on measurements

B i lls fr om distr i bu tion comp ani e s or re tai le rs

Metered energy bills may form the basis for measurement for a representative period before the introduction of the
energy efficiency improvement measure. These may then be compared to metered bills for the period after the
introduction and use of the measure, also for a representative period of time. The findings should be compared to a
control group (non-participation group) if possible or, alternatively, normalised as described in point 1.2.

E ne r g y sa le s da ta

The consumption of different types of energy (e.g. electricity, gas, heating oil) may be measured by comparing the
sales data from the retailer or distributor obtained before the introduction of the energy efficiency improvement
measures with the sales data from the time after the measure. A control group may be used or the data normalised.

E qu i pme nt a nd app li a nc e sale s data

Performance of equipment and appliances may be calculated on the basis of information obtained directly from the
manufacturer. Data on equipment and appliance sales can generally be obtained from the retailers. Special surveys
and measurements may also be carried out. The accessible data can be checked against sales figures to determine
the size of energy savings. When using this method, adjustment should be made for changes in the use of the
equipment or appliance.

E nd-u se loa d da ta

Energy use of a building or facility can be fully monitored to record energy demand before and after the introduc-
tion of an energy efficiency improvement measure. Important relevant factors (e.g. production process, special
equipment, heating installations) may be metered more closely.

2.2. Data and methods based on estimates

S i mp le en g i ne e ri ng e sti ma te d da ta : n on-i nspe cti on

Simple engineering estimated data calculation without on-site inspection is the most common method for obtaining
data for measuring deemed energy savings. Data may be estimated using engineering principles, without using on-
site data, but with assumptions based on equipment specifications, performance characteristics, operation profiles
of measures installed and statistics, etc.

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E nh a nc e d e ng i ne er i ng esti ma te d da ta : i nsp ec ti on

Energy data may be calculated on the basis of information obtained by an external expert during an audit of, or
other type of visit to, one or several targeted sites. On this basis, more sophisticated algorithms/simulation models
could be developed and be applied to a larger population of sites (e.g. buildings, facilities, vehicles). This type of
measurement can often be used to complement and calibrate simple engineering estimated data.

3. How to deal with uncertainty

All the methods listed in point 2 may entail some degree of uncertainty. Uncertainty may derive from (1):

(a) instrumentation errors: these typically occur because of errors in specifications given by the product manufac-

turer;

(b) modelling errors: these typically refer to errors in the model used to estimate parameters for the data collected;

(c) sampling errors: this typically refers to errors resulting from the fact that a sample of units was observed rather

than the entire set of units under study.

Uncertainty may also derive from planned and unplanned assumptions; these are typically associated with estimates,
stipulations and/or the use of engineering data. The occurrence of errors is also related to the chosen system of
data collection that is outlined in points 2.1 and 2.2. A further specification of uncertainty is advised.

Member States may choose to use the method of quantified uncertainty when reporting on the targets set out in
this Directive. Quantified uncertainty shall then be expressed in a statistically meaningful way, declaring both accu-
racy and confidence level. For example, ‘the quantifiable error is found with 90 % confidence to be ± 20 %’.

If the method of quantified uncertainty is used, Member States are also to take into account that the acceptable
level of uncertainty required in energy savings calculations is a function of the level of savings and the cost-effec-
tiveness of decreasing uncertainty.

4. Harmonised lifetimes of energy efficiency improvement measures in bottom-up calculations

Some energy efficiency improvement measures last for decades while other measures last for a shorter period of
time. The list below gives some examples of the average lifetime of energy efficiency improvement measures:

loft insulation of private dwellings

cavity wall insulation of private dwellings

glazing E to C rated (in m2)

boilers B to A rated

heating controls — upgrade with boiler replacement

CFLs — retail

Source: Energy Efficiency Commitment 2005-2008, UK.

30 years

40 years

20 years

15 years

15 years

16 years

To ensure that all Member States apply the same lifetimes for similar measures, these lifetimes will be harmonised
on a European level. The Commission, assisted by the Committee created in Article 16, shall therefore replace the
above list with an agreed preliminary list with the average lifetime of different energy efficiency improvement
measures not later than … (*).

(1) A model for establishing a level of quantifiable uncertainty based on these three errors is given in Appendix B in the International

Performance Measurement and Verification Protocol (IPMVP).
(*) Six months after the date of entry into force of this Directive.

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5. How to deal with multiplier effects of energy savings and how to avoid double counting in mixed top-

down and bottom-up calculation methods

The implementation of one energy efficiency improvement measure, e.g. hot water tank and pipe insulation in a
building, or another measure with equivalent effect, may have future multiplier effects in the market, meaning that
the market will implement a measure automatically without any further involvement from the authorities or agen-
cies referred to in Article 4(3) or any private based energy services provider. A measure with multiplier potential
would in most cases be more cost-effective than measures that need to be repeated on a regular basis. Member
States shall estimate the energy savings potential of such measures including their multiplier effects and verify the
total effects in an ex post evaluation using indicators when appropriate.

Corrections shall be made for double counting of energy savings. The use of matrices that enable the summation of
impacts of measures is encouraged.

Potential energy savings resulting after the target period shall not be taken into account when Member States
report on the overall target set out in Article 4. Measures that promote long-term market effects should in any case
be encouraged and measures that have already resulted in multiplier energy savings effects should be taken into
account when reporting on the targets set out in Article 4, provided they can be measured and verified using the
guidance given in this Annex.

6. How to verify energy savings

If deemed cost-effective and necessary, the energy savings obtained through a specific energy service or other
energy efficiency improvement measure shall be verified by a third party. This may be done by independent consul-
tants, ESCOs or other market actors. The appropriate Member State authorities or agencies referred to in Article
4(3) may provide further instructions on this matter.

Sources: A European Ex-post Evaluation Guidebook for DSM and EE Service Programmes; IEA, INDEEP database; IPMVP,

Volume 1 (Version March 2002).

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ANNEX V

INDICATIVE LIST OF EXAMPLES OF ENERGY EFFICIENCY IMPROVEMENT MEASURES FOR THE PUBLIC
SECTOR

Without prejudice to the national and Community public procurement legislation, Member States may ensure that the
public sector applies requirements from the following indicative list in the context of the exemplary role of the public
sector as referred to in Article 5:

(a) requirements for the use of financial instruments for energy savings, including energy performance contracting, that
stipulate the delivery of measurable and predetermined energy savings (including whenever public administrations
have outsourced responsibilities);

(b) requirements to purchase equipment and vehicles based on lists of energy-efficient product specifications of different
categories of equipment and vehicles to be drawn up by the authorities or agencies referred to in Article 4(3), using,
where applicable, minimised life cycle cost analysis or comparable methods to ensure cost-effectiveness;

(c) requirements to purchase equipment that has efficient energy consumption in all modes, including in stand-by
mode, using, where applicable, minimised life cycle cost analysis or comparable methods to ensure cost-effective-
ness;

(d) requirements to replace or retrofit existing equipment and vehicles with the equipment listed in points (b) and (c);

(e) requirements to use energy audits and implement the resulting cost-effective recommendations.

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STATEMENT OF THE COUNCIL'S REASONS

I. INTRODUCTION

On 10 December 2003 the Commission presented a proposal for a Directive of the European Parlia-
ment and of the Council on energy end-use efficiency and energy services (1) based on Article 175(1)
of the EC Treaty.

The European Economic and Social Committee delivered its opinion on 28 October 2004 (2). The
Committee of the Regions delivered its opinion on 17 June 2004 (3).

The European Parliament adopted its opinion at first reading on 7 June 2005 (4), approving 97 amend-
ments.

On 23 September 2005 the Council adopted its common position in accordance with Article 251 of
the EC Treaty.

II. OBJECTIVE OF THE PROPOSAL

The proposal aims to stimulate energy efficiency by introducing mandatory savings targets for Member
States, and by taking measures which will create a market for energy services. The proposal focuses on
the demand side (i.e. the end-user and the retail suppliers), and can therefore be seen as a complement
to prior Community legislation in the field of energy which addressed the supply side. It aims to contri-
bute to the achievement of the EU's CO2 emissions reduction target, to further strengthen the leading
role of the Community on the world market for energy-efficient products and services — hence contri-
buting to the Lisbon process — and it will have positive effects on security of supply.

III. ANALYSIS OF THE COMMON POSITION

1. General remarks

The Council shares the priority given by the Commission to energy efficiency and therefore broadly
supports the general aim of the Commission's proposal. Most of the changes made by Council in its
common position seek to adapt the draft Directive to different national situations and existing prac-
tices, to lower the cost and administrative burden of its application and generally to make it easier
to implement.

(a) Concerning the 97 amendments adopted by the European Parliament, the Council has accepted

the following 37 amendments:

— fully (sometimes with redrafting): 1, 11, 12, 13 (in recital 4), 21, 23 (5), 33 (Article 4(3)), 47,

48, 50 (Article 6(3)), 56-58, 76 (Article 16), 82, 86, 90, 98 (Annex IV, point 1.2);

— partly: 3, 7, 14 (Article 2(2)), 63, 69 (Article 13(3)(d) and recital 13(b)), 74, 79, 80, 87 (also

in Annex III, point (q)) and 99;

— in principle: 16 (Article 3(c)), 17 (Article 3(d)), 22, 49 (Article 6(a)), 64, 70, 88 (Annex III,

point (r)), 83 and 92 (Annex III, points (m) and (n)).

(1) Doc. 16261/03 ENER 362 CODEC 1858 (not yet published in Official Journal).
(2) OJ C 120, 20.5.2005, p. 115.
(3) OJ C 318, 22.12.2004, p. 19.
(4) Doc. 9836/05 CODEC 472 ENER 93 (not yet published in the Official Journal).
(5) Only concerns the German language version.

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Council rejected the following 60 amendments: 2, 4, 5 and 10 (which are linked) 6, 8, 9, 15,
18, 101, 20, 24-32, 34, 104, 107, 108, 38-41, 43-46, 51-55, 59-62, 65-68, 71, 72, 75, 77,
78, 81, 84, 85, 89, 91, 93-96, 109, of which amendments 4, 18, 20, 24-25, 53, 55, 59, 61-62,
67-68, 77, 81, 89, 91, 101 and 104 were not acceptable to the Commission.

Several of the key amendments which Council did not accept (most importantly, amendments
29 and 39) go far beyond the provisions of the original proposal of the Commission. The same
provisions were changed by Council in its common position: the reasons underlying the rejec-
tion of these key amendments are thus given under point (2) below.

(b) Concerning the Commission proposal, the Council has introduced a number of changes which

are reflected below.

2. Specific remarks

(a) The main changes introduced by Council concern the targets in Articles 4 and 5:

— Article 4: the common position contains an indicative target of 6 % for the sixth year of
application of the Directive (Article 4(1) and recital 8a)
instead of mandatory targets;
Member States are obliged to take measures which will contribute towards achieving the
indicative target (Article 4(1)) and shall fix themselves an intermediate indicative target for
the third year of application (Article 4(2)).

— Article 5: the common position no longer contains a separate, higher target for the public
sector (Article 5(1)); nonetheless, the public sector must fulfil an exemplary role, take one or
more energy efficiency improvement measures (legislative initiatives and/or voluntary agree-
ments (1) or other schemes with an equivalent effect), and Member States shall monitor its
performance in relation to the national indicative savings target.

The Council chose to make the target indicative (rather than mandatory as proposed by the
Commission) and to have no specific target for the public sector, on the following grounds:

— Member States felt it would be inappropriate to be taken to the Court of Justice merely on
grounds of non-achievement of the prescribed level of savings: for example, if a Member
State achieved ‘only’ 5 % savings after six years, instead of the prescribed 6 %. The future
achievement of the targets is directly linked to the ‘energy-consuming behaviour’ of indivi-
dual citizens and undertakings — behaviour which Member States aim to influence through
the different measures proposed in the draft Directive. However, the end net result of these
measures is not completely predictable and thus not entirely within the sphere of control of
Member States.

— The starting position for the implementation of this Directive varies significantly between
Member States, some Member States having already undertaken considerable efforts in the
past — at a cost — and often in the public sector. As a result, the scope for improvement
differs from one Member State to the other.

— Only cost-effective measures should be taken by Member States (this in line with assertions
made by the Commission in its explanatory memorandum, and therefore Council added a
provision to that effect to Article 4(1)). In this context, Member States want to take the
measures in the area where the cost-effectiveness is greatest — irrespective of whether this
is in the public or private sector.

(1) The use of voluntary agreements is referred to in recital 13 of the Commission's proposal.

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In addition, a Comitology procedure is now included (Article 16, in line with amendments 76 and
99):
its main tasks will be to further develop the calculation methodology set out in the
Annexes (including an assessment of the appropriate balance to be struck between ‘top-down’
and ‘bottom-up’ measurements) and to adapt it to technical developments. Furthermore, provi-
sions have been introduced that will allow the use of voluntary agreements as instruments contri-
buting to the achievement of the indicative targets.

(b) Other changes

— Council has introduced several new recitals (8a, 8b, 9a, 11a, 11b, 11c, 13b), and expanded

the existing recitals 8 and 12.

— Article 1, second indent: the wording has been changed somewhat in order to convey that
this Directive aims to create the conditions for the development of a market for energy
services, rather than develop such a market.

— Article 2: this Article was amended so as to exclude from the scope also parts of transport
undertakings based primarily on the use of aviation and maritime bunker fuels (a similar
exclusion was also foreseen in the Commission's proposal by means of the definition of
‘Energy’), and certain parts of the armed forces.

— As regards the definitions in Article 3, Council has sought to make these as concise, consis-
tent and operational as possible, whilst aligning them with existing definitions in other
Community legislation, where appropriate.

— In Article 5, an element of flexibility has been introduced by placing emphasis on the most
cost-effective measures and by introducing a reference to the appropriate level of govern-
ment at which a particular measure is to be introduced. Furthermore, the list of public
purchasing guidelines in Article 5(4) (which already did not have an obligatory character in
the Commission's proposal: ‘Member States can…’) has been moved to Annex V: this was
done in order not to exclude other potential cost-effective measures which the public sector
could take. Article 5(5) was deleted since it is unnecessary in view of the Commission's right
of initiative.

— Article 6 was restructured: points (b) and (c) were taken up in paragraph 1, whilst point (a)
has been reformulated in paragraph 2. This paragraph 2 offers Member States a choice
between different obligations to be imposed on the companies covered by this Article.

— Article 7: this Article was extremely far-reaching and potentially very costly to implement in
its original form, since it made Member States responsible for ensuring that all energy effi-
ciency measures would be offered to all customers. In the common position, the Article
aims to ensure optimal transparency and dissemination to the market players with regard to
information pertaining to energy efficiency mechanisms and financial and legal frameworks.

— Article 8: this Article, in its original form, made Member States responsible for ensuring that
qualification, accreditation and/or certification schemes were available for all market players
delivering energy services. This Article was adapted so that Member States have to ensure
the availability of such schemes where necessary — effectively allowing Member States to take
into account other relevant factors (for example, the level of maturity of the market in ques-
tion, number of market players and demand) before developing these (costly) schemes.

— In Article 10, a provision has been added which allows, in certain circumstances, schemes

and tariff structures with a social aim.

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— Two paragraphs have been added to Article 12:

— paragraph 2 ensures that other, less costly audit measures may be used in certain cases,

— paragraph 3 specifies that premises certified under the ‘Buildings Directive’ have fulfilled
the audit requirements; furthermore, it allows audits resulting from schemes based on
voluntary agreements.

— Article 13 has been adapted to make it more flexible and less costly, and to avoid a dispro-

portionate administrative burden.

— The reporting requirements of Article 14 have been streamlined and amended: paragraph 1
enables the Commission to take account of existing calculation methods, paragraph 2 now
foresees that Member States have to submit one interim report and one final report.

— A new Article 15 has been added, which specifies the tasks, as well as the schedule there-
fore, of the Commission in the context of the Comitology procedure.
It also foresees
(together with the relevant provisions of Annexes I and IV) that the Commission develops a
calculation methodology which includes a percentage of bottom-up calculations, to be used
by Member States as from the date of application of the Directive (Article 15(2)). Once the
Commission has completed this task, it should continue its work in order to assess whether
the percentage of bottom-up calculations can be further increased, weighing the factors
which are of relevance (Article 15(3)); if the Commission thus decides that the percentage of
bottom-up calculations can indeed be increased, Member States must use this new metho-
dology two years after the date of application.

— In Article 18, a period of transposition of two years replaces the unrealistic deadline of 1
June 2006 proposed by the Commission. Such period on the one hand allows the comple-
tion of the normal legislative procedures at national level, and on the other hand enables:

— Member States to send information on existing calculation methods to the Commission,
so that the Commission can take these into account (preferably within six months,
Article 14(1)),

— the Commission to develop the calculation methodology (within 18 months, Article

15(2)),

— Member States to calculate the national indicative savings target and prepare for the

application in practice of the calculation methodology.

— Annex I now reflects the amended methodology for the calculation of the national savings
target. In point 3, Council changed the date proposed by the Commission as cut-off date
after which, as a general rule, measures may be taken into account in the calculation of
annual savings, from 1991 to 1995. However, it kept the date of 1991 for use in certain
cases: this provision is needed for those Member States that have initiated certain policy
instruments in the period 1991-1994 that are still used today. Furthermore, it ensures that
Member States which have already undertaken considerable efforts in the field of improving
energy efficiency in the past are not treated unfairly compared to Member States which have
not yet taken action on a similar scale.

— The common position makes clear in Annex III that the list contains examples of eligible
measures, rather that being limitative in nature. In addition, changes were made to several
of the examples listed.

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— In Annex IV, Council added details describing the top-down and bottom-up calculation
methods (point 1.1), a list of harmonised lifetimes of energy efficiency improvement
measures in bottom-up calculations (point 4) and provisions pertaining to multiplier effects
and double counting (point 5).

IV. CONCLUSION

Both institutions have expressed their support for the general aim of the Commission's proposal; both
agree that the Union should start to exploit the possibilities offered by the potential energy savings and
should further develop the market for energy-efficient services and products sooner rather than later.
In this context, the Council holds the opinion that its common position does justice to these essential
aims of the Commission's proposal.