COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a Directive of the European Parliament and of the Council amending Directive 2012/27/EU on Energy Efficiency
Date: 2016-11-30
Institutions: Directorate-General for Energy, European Commission
Subjects: EU Member State, climate change policy, consumer information, energy consumption, energy efficiency, energy saving, energy use

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   EUROPEAN COMMISSION  Brussels, 30.11.2016  SWD(2016) 406 final   COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the document Proposal for a Directive of the European Parliament and of the Council  amending Directive 2012/27/EU on Energy Efficiency {COM(2016) 761 final} {SWD(2016) 405 final}  
 
 
Executive Summary Sheet 

Impact assessment for a proposal for a Directive of the European Parliament and the Council amending Directive 
2012/27/EU on Energy Efficiency  

A. Need for action 

Why? What is the problem being addressed?  
The EU legal framework for energy efficiency  needs to be adapted to a 2030 perspective  because  of 
political  orientations  (European  Council  in  October  2014  and  the  European  Parliament  in  December 
2015) and to deliver the energy efficiency savings necessary for the EU's 2020 and 2030 targets. 

The main problems  addressed in this impact assessment are the absence of a defined level  of energy 
efficiency  ambition  for  2030  in  the  Energy  Efficiency  Directive  2012/27/EU  ('the  EED'),  its  nature 
(binding  or  indicative)  and  the  fact  that  under  the  existing  framework  of  Article  7  (energy  savings 
obligations)  and  Articles  9-11  (metering  and  billing)  a  substantial  amount  of  economically  viable 
energy savings will not be taken up. This is damaging for all EU citizens who will see fewer benefits 
related to security of supply, the environment, lower energy costs for households and firms, more jobs, 
increased growth and innovation and health improvements. The absence of a long term objective also 
reduces investors' confidence to invest in energy efficiency projects. 

The main drivers identified are the short-term perspective (expiry of Article 7 after 2020) and the need 
to reflect technical progress in metering and billing to the benefit of energy consumers.  

What is this initiative expected to achieve?  

This initiative will define the optimal level of energy efficiency in 2030, based on a multi-dimensional 
analysis showing impacts on energy bills, reliance on external suppliers of oil and gas, employment and 
GDP growth, the environment, health, air pollution and others.  
It will also ensure that the EED contributes to the achievement of the optimal level of energy efficiency 
for 2030 by:  
  Extending  Article  7  beyond  2020  to  continue  its  contribution  to  the  achievement  of  the  energy 

efficiency target for 2030, and also update and simplify the provisions where relevant; 

  Ensuring  that  metering  and  billing  rules  are  clearer  and  help  consumers  take  advantage  of  the 

empowerment opportunities offered by progress in technology. 

What is the value added of action at the EU level?  
Member  States  can  better  target  national  policies  if  EU-wide  headline  targets  are  agreed  and  are 
coherent  with  other  energy  and  climate  objectives  such  as  the  emissions  trading  system  ('ETS'),  the 
Effort-Sharing Decision and the EU renewable energy target for 2030. 

Updating  the  existing  energy  savings  requirement  of  Article  7  fully  respects  the  principle  of 
subsidiarity by leaving it to the Member States to decide which policies and measures to use to achieve 
the  savings.  In  addition,  because  Article  7  requires  the  achievement  of  a  fixed  amount  of  energy 
savings,  it  increases  the  rate  of  application  of  other  energy  efficiency  requirements  such  as  the 
renovation of buildings, energy labelling and ecodesign, increasing their efficacy.  

In a single market for energy there is a strong case for suppliers being subject to similar if not identical 
obligations  and  rules,  and  for  consumers  to  enjoy  the  same  basic  rights  and  be  provided  with 
comparable and recognisable information. 

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B. Solutions 

What  legislative  and  non-legislative  policy  options  have  been  considered?  Is  there  a  preferred 
choice or not? Why?  
For the level of the target, a reduction of primary energy compared to a 2007 baseline of 27, 30, 33, 35 
and 40 % was assessed. For the formulation of the target, a primary and/or a final energy consumption, 
a saving or an energy intensity target were analysed. Regarding the nature of the target, the following 
options were assessed: 

  Option 1: indicative EU and national targets; 
  Option 2: binding EU target; 
  Option 3: binding Member State targets. 

No preferred option was identified. 

For Article 7 the following options were assessed:  

  Option  1:  no  regulatory  action  at  EU  level;  continue  with  guidance  on  regulatory  framework 

and work on enforcement; 

  Option 2: extend Article 7 to 2030; 
  Option 3: extend Article 7 to 2030; simplify and update (e.g. on what savings can be counted 

and on-building renewable energy production); 

  Option 4: extend Article 7 to 2030, update and simplify increase the rate of savings. 

For Articles 9-11 the following options were assessed: 

  Option 1: improved implementation and further guidance (no regulatory action) 
  Option 2: clarification and updating of the provisions, including consolidation of the provisions 

on electricity and gas with the Internal energy market legislation to ensure coherence. 

All options are assessed in the Impact Assessment and compared against the baseline scenario and to 
each  other.  As  a  result  of  this  analysis,  option  3  for  Article  7  and  option  2  for  Articles  9-11  are  the 
preferred options as they are the most effective in achieving the expected objectives, most efficient as 
well as consistent with other EU energy and climate policies. 
Who supports which option?  
The responses to the stakeholder consultation did not show definitive views on the level of the target 
nor  on  its  nature.  At  a  stakeholder  event  with  282  participants  from  European  industry,  civil  society 
organisations and Member States, most stakeholders who expressed a view supported a target of up to 
40 % in 2030, but there was no definitive view on the binding or other nature of the target. 

Most  stakeholders,  in  particular  NGOs  and  utility  companies  that  participated  in  the  public 
consultation,  supported  extending  Article  7  beyond  2020.  However,  7  out  of  15  Member  States  that 
took part in the consultation did not support extending Article 7. 

Roughly 3 out of 5 stakeholders considered the provisions on metering and billing to be adequate and 
92 % of all utility respondents were of this view. Member States were also generally satisfied with the 
status-quo.  By  contrast,  2  of  3  NGOs  (including  consumer  organisations)  considered  the  provisions 
inadequate  and  unable  to  guarantee  consumers  sufficiently  frequent,  detailed  and  understandable 
information on their energy consumption. 

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C. Impacts of the preferred option 

What are the benefits of the preferred option (if any, otherwise main ones)?  
The analysis shows that a higher level of energy efficiency in 2030 would have a positive impact on 
economic growth, employment, competitiveness, a strong impact on security of supply and the level 
of gas imports in particular. In the period 2021-2030, a target of 30 % energy efficiency would save 
€69.6  bn  in  fossil  fuels  import  bills  compared  to  a  €4  274  bn  cost  under  a  27 %  energy  efficiency 
target, would create between  395 000 and 435 000 jobs  by 2030 on a net basis  and would increase 
GDP by between 0.25 % and 0.4 % in the central scenarios. 

For Article 7, option 3 is preferred as it extends the energy savings requirement beyond 2020 and the 
simplification  aspect  will  facilitate  the  achievement  by  Member  States  of  the  required  savings, 
especially those coming from building renovation. This option also ensures better overall clarity of the 
requirements applicable to energy efficiency obligation schemes and alternative measures. 

For Articles 9-11, the preferred option 2 removes the legal ambiguities that currently hamper proper 
implementation  for  thermal  energy  in  multi-apartment/purpose  buildings,  and  it  would  consolidate 
and accelerate the transition to smart (remotely readable) heat measurement, enabling better and more 
frequent consumption feedback to consumers.  
What are the costs of the preferred option (if any, otherwise main ones)?  
Overall,  in  the  period  2021-2030  and  with  the  discount  rates  used,  a  target  of  30 %  would  lead  to 
energy system costs that were 0.46 % (€9 bn) higher compared to 27 % target. However, in the long 
term, a 30 % energy efficiency target for 2030 would lead to energy system costs that are €9 bn lower 
compared to 27 % target in 2021-2050. 

The  preferred  Article  7 option  is  unlikely  to  entail  additional  costs to  Member  States  and  obligated 
parties  (utility  companies)  as  the  current  savings  level  of  1.5 %  will  be  retained.  No  additional 
administrative  costs  are  expected  and  they  might  be  even  reduced  as  Member  States  are  already 
familiar with the requirements, and also because of the simplification of calculation of savings from 
buildings related measures. 

The preferred option for Articles 9-11 is unlikely to entail any significant costs on any party affected, 
firstly  because  it  clarifies  the  legal  requirements  and  supports  a  trend  towards  uptake  of  new 
technologies that is already observed in the market, and secondly because the requirements to install 
new devices would still be subject to a cost-effectiveness criteria, as it is today.  
How will businesses, SMEs and micro-enterprises be affected?  
SMEs  are  key  actors  for  upscaling  energy  efficiency  especially  in  households  (70 %  of  energy 
efficiency improvement measures are carried out by SMEs) and will benefit from increased business 
opportunities, as well as reduced energy bills resulting from reducing consumption. 

Extending Article 7 after 2020 will have a positive effect on SMEs who will benefit from increased 
business opportunities caused by the ongoing need to put energy efficiency savings into practice, in 
particular in building renovation. 
Will there be significant impacts on national budgets and administrations?  
Although Member States may need to increase their spending in the short term to finance the up-front 
energy efficiency investments, in the long term  they will benefit from a decrease in fuels import bills, 
energy  consumption  bills  (e.g.  of  public  buildings)  and  positive  budget  impacts  due  to  higher 
employment and economic growth.  

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Since all Member States already have measures in place, it is unlikely that extending Article 7 to 2030 
would  entail  additional  budgetary  or  administrative  costs  for  Member  States  and  obligated  parties 
(utility companies) as the same savings level of 1.5 % per year is retained for the new period 2021-
2030.  Administrative  costs  should  be  reduced  thanks  to  the  simplification  of  calculation  of  savings 
from  buildings  related  measures,  as  the  calculation  methodology  under  the  Energy  Performance  of 
Buildings Directive could be used. 
Will there be other significant impacts?  
Extending  Article  7  beyond  2020  will  continue  to  reduce  the  final  energy  consumption  (81  Mtoe 
savings expected in year 2030), reduce energy bills for consumers, and extend the positive aspects of 
greater  energy  efficiency  related  to  economic  (e.g.  further  developing  the  energy  services  market), 
environmental, social (including addressing energy poverty) and health impacts. 

For Articles 9-11, the assessment estimates the extra energy savings due to improved application of 
the EED requirements in respect of heating in multi-apartment buildings would be  about 7 Mtoe or 
50 % higher than the expected savings in a non-regulatory scenario. 

D. Follow up 

When will the policy be reviewed?  
In  the  proposal,  no  change  is  made  to  the  existing  reporting  obligations  but  the  Energy  Union 
Governance  initiative  will  ensure  that  a  transparent  and  reliable  planning,  reporting  and  monitoring 
system is put in place, based on integrated national energy and climate plans and streamlined progress 
reports  by  Member  States  regularly  assessing  the  implementation  of  national  plans  along  the  five 
dimensions of the Energy Union.  

The results of the implementation of the EED will be assessed five years after the entry into force of 
the revised Directive, with the introduction of a new requirement for the Commission to undertake a 
general review of the Directive.  

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