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Greece afoul of EU Energy Efficiency Directive

Thursday, July 9, 2015

The European Union (EU) could add another increment to Greece’s financial woes through a proposed daily penalty of 29,145 euros (CAD $40,803) for lagging on adherence to the EU Energy Efficiency Directive. Although the beleaguered Hellenic Republic is just one of the vast majority of members that have not yet fulfilled prescribed commitments, the European Commission has thus far referred only Greece and Hungary to the EU Court of Justice.

“Overall, 27 members states (all except Malta) have received a letter of formal notice for failing to fully transpose the Directive by the June 2014 deadline,” the European Commission reported in mid-June 2015.

Under the Directive — which calls for a 20 per cent reduction in energy consumption from the levels projected in 2007 by 2020 — EU countries were required to enact their own compliant legislation by June 5, 2014 to promote energy efficiency in the residential, commercial, industrial and transportation sectors.

Each of the 28 member states are expected to set proportionate energy saving targets to collectively ensure the EU’s primary energy consumption will not surpass 1,474 megatonnes of oil equivalent (Mtoe) in 2020, representing a 368 Mtoe reduction from original projections. This is to be achieved through a range of measures stipulated in the Directive.

Notably, member states must establish obligatory targets for energy distributors and retailers within their boundaries to achieve energy savings of 1.5 per cent every year from 2014 to 2020, and devise a long-term strategy for upgrading the energy efficiency of their national residential and commercial building stocks. Governments must invest in retrofitting a minimum of three per cent of their own buildings annually and implement standards for energy efficiency in all public purchasing. The Directive also calls for free and easy consumer access to utility metering data and/or billing information, and compulsory energy audits at no less than four-year intervals for large companies.

EU members must report annually on their progress in achieving their energy saving targets. They were also required to submit a more comprehensive National Energy Efficiency Action Plan, setting out policies and programs to improve energy efficiency in supply, transmission, distribution and end-use along with the projected resulting savings, by April 30, 2014.

Greece’s plan, dated December 2014, lists 18 policy measures intended to achieve savings of 902.1 kilotonnes of oil equivalent (ktoe) by 2020. This includes: energy upgrades for 6,500 commercial buildings (3,000 via energy service companies), 280 public buildings and 200,000 residential dwellings; implementing the ISO 50001 energy management system in 4,000 public sector buildings; assigning energy managers to 15,000 public sector buildings; and training 40,000 staff — all to be launched beginning in 2015.

However, lack of concrete action has prompted the European Commission’s crackdown. “In February 2015, the Commission sent a reasoned opinion to Greece requesting the country notify the Commission of all transposition measures for the Energy Efficiency Directive. To date, no legislation transposing the Directive into national law has been adopted and/or notified to the Commission,” its June 18 release states.

The proposed penalty reflects the Commission’s view of the “duration and seriousness of the infringement”. In comparison, Hungary’s proposed penalty was set at 15,444 euros (CAD $21,622) per day. The European Court has leeway to adjust the fine to a lower amount, but offending countries would have to pay from the day of the judgement until they have enacted the Energy Efficiency Directive in their own legislation.

Germany is next on the list of targeted laggards. The European Commission has given the country a mid-August deadline to comply with obligations of the Directive. Austria, Portugal, Bulgaria, Croatia, Ireland, Romania and Latvia have also received notice via a reasoned opinion.

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