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COMMON METHODS AND PRINCIPLES FOR CALCULATING THE IMPACT OF ENERGY EFFICIENCY OBLIGATION SCHEMES OR OTHER POLICY MEASURES UNDER ARTICLES 8, 9 AND 10 AND ARTICLE 30(14)

1. Methods for calculating energy savings other than those arising from taxation measures for the purposes of Articles 8, 9 and 10 and Article 30(14). Obligated, participating or entrusted parties, or implementing public authorities, may use the following methods for calculating energy savings:

(a) deemed savings, by reference to the results of previous independently monitored energy improvements in similar installations. The generic approach is termed ‘ex ante’;

(b) metered savings, whereby the savings from the installation of a measure, or package of measures, are determined by recording the actual reduction in energy use, taking due account of factors such as additionality, occupancy, production levels and the weather which may affect consumption. The generic approach is termed ‘ex post’;

(c) scaled savings, whereby engineering estimates of savings are used. This approach may be used only where establishing robust measured data for a specific installation is difficult or disproportionately expensive, for example replacing a compressor or electric motor with a different kWh rating from that for which independent information about savings has been measured, or where those estimates are carried out on the basis of nationally established methodologies and benchmarks by qualified or accredited experts that are independent of the obligated, participating or entrusted parties involved;

(d) when calculating the energy savings for the purpose of Article 8(3) that can be counted to fulfil the obligation in that Article, Member States may estimate the energy savings of people affected by energy poverty, vulnerable customers, people in low-income households and, where applicable, people living in social housing on the basis of engineering estimates using standardised occupancy and thermal comfort conditions or parameters, such as parameters defined in national building regulations. The way comfort is considered for actions in buildings should be reported by the Member States to the Commission together with explanations of their calculation methodology.

(e) surveyed savings, where consumers’ response to advice, information campaigns, labelling or certification schemes or smart metering is determined. This approach shall be used only for savings resulting from changes in consumer behaviour. It shall not be used for savings resulting from the installation of physical measures.

2. In determining the energy savings for an energy efficiency measure for the purposes of Articles 8, 9 and 10 and Article 30(14), the following principles apply:

(a) Member States shall demonstrate that one of the objectives of the policy measure, whether new or existing, is the achievement of end-use energy savings pursuant to Article 8(1) and shall provide evidence and their documentation showing that the energy savings are caused by a policy measure, including voluntary agreements;

(b) the savings shall be shown to be additional to those that would have occurred in any event without the activity of the obligated, participating or entrusted parties, or implementing public authorities. To determine the savings that can be claimed as additional, Member States shall have regard to how energy use and demand would evolve in the absence of the policy measure in question by taking into account at least the following factors: energy consumption trends, changes in consumer behaviour, technological progress and changes caused by other measures implemented at Union and national level;

(c) savings resulting from the implementation of mandatory Union law shall be considered to be savings that would have occurred in any event, and thus shall not be claimed as energy savings for the purpose of Article 8(1). By way of derogation from that requirement, savings related to the renovation of existing buildings, including the savings resulting from the implementation of minimum energy performance standards in buildings in accordance with Directive 2010/31/EU, may be claimed as energy savings for the purpose of Article 8(1), provided that the materiality criterion referred to in point 3(h) of this Annex is ensured. Measures promoting energy efficiency improvements in the public sector pursuant to Article 5 and Article 6 may be eligible to be taken into account for the fulfilment of energy savings required under Article 8(1), provided that they result in verifiable and measurable or estimable end-use energy savings. The calculation of energy savings shall comply with this Annex;

(d) end-use energy savings resulting from the implementation of energy efficiency improvement measures taken pursuant to emergency regulations under Article 122 TFEU may be claimed for the purpose of Article 8(1), provided that they result in verifiable and measurable or estimable end-use energy savings, with the exception of those energy savings resulting from rationing or curtailment measures;

(e) measures taken pursuant to Regulation (EU) 2018/842 can be considered material, but Member States have to show that they result in verifiable and measurable or estimable end-use energy savings. The calculation of energy savings shall comply with this Annex;

(f) Member States shall count only end use energy savings from policy measures in sectors or installations covered by Chapter IVa of Directive 2003/87/EC if they result from the implementation of Article 9 or 10 of this Directive and which go beyond the requirements laid down in Directive 2003/87/EC or beyond the implementation of actions linked to the allocation of free allowances under that Directive. Member States shall demonstrate that the policy measures result in verifiable and measurable or estimable end-use energy savings. The calculation of energy savings shall comply with this Annex. If an entity is an obligated party under a national energy efficiency obligation scheme under Article 9 of this Directive and under the EU ETS for buildings and road transport under Chapter IVa of Directive 2003/87/EC, the monitoring and verification system shall ensure that the carbon price passed through when releasing fuel for consumption under that Chapter is taken into account when calculating and reporting the energy savings of its energy saving measures;

(g) credit may be given, provided that it is only given for savings exceeding the following levels:

(i) Union emission performance standards for new passenger cars and new light commercial vehicles following the implementation of Regulation (EU) 2019/631 of the European Parliament and of the Council ; Member States must provide reasons, their assumptions and their calculation methodology to show additionality to the Union’s new vehicle CO2 requirements;

(ii) Union requirements relating to the removal from the market of certain energy related products following the implementation of implementing measures under Directive 2009/125/EC. Member States shall provide evidence, their assumptions and their calculation methodology to show additionality;

(h) policies with the purpose of encouraging higher levels of energy efficiency of products, equipment, transport systems, vehicles and fuels, buildings and building elements, processes or markets shall be permitted, except for policy measures:

(i) regarding the use of direct combustion of fossil fuel technologies that are newly implemented as from 1 January 2026; and (ii) subsidising the use of direct combustion of fossil fuel technologies in residential buildings as from 1 January 2026.

(i) energy savings as a result of policy measures newly implemented as from 1 January 2024 regarding the use of direct fossil fuel combustion in products, equipment, transport systems, vehicles, buildings or works shall not count towards the fulfilment of energy savings obligation pursuant to Article 8(1)(b). In the case of policy measures promoting combinations of technologies, the share of energy savings related to the fossil fuel combustion technology are not eligible as from 1 January 2024.

(j) by way of derogation from point (i), for the period 1 January 2024 to 31 December 2030, energy savings from direct fossil fuel combustion technologies improving the energy efficiency in energy intense enterprises in the industry sector may be counted as energy savings only for the purpose of Article 8(1), points (b) and (c), until 31 December 2030, provided that:

(i) the enterprise has carried out an energy audit pursuant to Article 11(2) and an implementation plan including:

— an overview of all cost-effective energy efficiency measures with a payback period of five years or less, on the basis of simple pay-back period methodologies provided by the Member State,

— a timeframe for the implementation of all recommended energy efficiency measures with a payback period of five years or fewer,

— a calculation of expected energy savings resulting from the energy efficiency measures recommended, and — energy efficiency measures related to the use of direct fossil fuel combustion technologies with the relevant information needed for:

— proving that the measure identified does not increase the amount of energy needed or the capacity of an installation,

— justifying that the uptake of sustainable, non-fossil fuel technologies is technically not feasible,

— showing that the direct fossil fuel combustion technology complies with the most up-to-date corresponding Union emission performance legislation and prevents technology lock-in effects by ensuring future compatibility with climate-neutral alternative non-fossil fuels and technologies.

(ii) the continuation of the use of direct fossil fuel technologies is an energy efficiency measure to decrease energy consumption with a payback period of five years or less, on the basis of simple pay-back period methodologies provided by the Member State, recommended as result of an energy audit pursuant to Article 11(2) and included in the implementation plan;

(iii) the use of direct fossil fuel technologies complies with the most up-to-date corresponding Union emission performance legislation, does not lead to technology lock-in effects and ensures future compatibility with climate-neutral alternative fuels and technologies;

(iv) the use of direct fossil fuel technologies in the enterprise does not lead to an increased energy consumption or increase the capacity of the installation in that enterprise;

(v) evidence is provided that no alternative, sustainable non-fossil fuel solution was technically feasible;

(vi) the use of direct fossil fuel technologies result in verifiable and measurable or estimable end-use energy savings calculated in accordance with this Annex;

(vii) evidence is published on a website or is made publicly available for all interested citizens;

(k) measures promoting the installation of small-scale renewable energy technologies on or in buildings may be eligible to be taken into account for the fulfilment of energy savings required under Article 8(1), provided that they result in verifiable and measurable or estimable end-use energy savings. The calculation of energy savings shall comply with this Annex;

(l) measures promoting the installation of solar thermal technologies may be eligible to be taken into account for the fulfilment of energy savings required under Article 8(1) provided that they result in verifiable and measurable or estimable end-use energy savings. The heat produced by solar thermal technologies from solar radiation can be excluded from their end-use energy consumption;

(m) for policies that accelerate the uptake of more efficient products and vehicles, except those newly implemented as from 1 January 2024 regarding the use of direct fossil fuel combustion, full credit may be claimed, provided that it is shown that such uptake takes place before the expiry of the average expected lifetime of the product or vehicle, or before the product or vehicle would usually be replaced, and the savings are claimed only for the period until the end of the average expected lifetime of the product or vehicle to be replaced;

(n) in promoting the uptake of energy efficiency measures, Member States shall, where relevant, ensure that quality standards for products, services and installation of measures are maintained or introduced where such standards do not exist;

(o) to account for climatic variations between regions, Member States may choose to adjust the savings to a standard value or to accord different energy savings in accordance with temperature variations between regions;

(p) the calculation of energy savings shall take into account the lifetime of the measures and the rate at which the savings decline over time. That calculation shall count the savings each individual action will achieve during the period from its date of implementation to the end of each obligation period. Alternatively, Member States may adopt another method that is estimated to achieve at least the same total quantity of savings. When using another method, Member States shall ensure that the total amount of energy savings calculated using that method does not exceed the amount of energy savings that would have been the result of their calculation when counting the savings each individual action will achieve during the period from its date of implementation to 2030. Member States shall describe in detail in their integrated national energy and climate plans notified pursuant to Article 3 and Articles 7 to 12 of Regulation (EU) 2018/1999 that other method and the provisions made to ensure that the binding calculation requirement is met.

3. Member States shall ensure that the following requirements for policy measures taken pursuant to Article 10 and Article 30(14) are met:

(a) policy measures and individual actions produce verifiable end-use energy savings;

(b) the responsibility of each participating party, entrusted party or implementing public authority, as relevant, is clearly defined;

(c) the energy savings that are achieved or are to be achieved are determined in a transparent manner;

(d) the amount of energy savings required or to be achieved by the policy measure is expressed in either primary energy consumption or final energy consumption, using the net calorific values or primary energy factors referred to in Article 31;

(e) an annual report on the energy savings achieved by entrusted parties, participating parties and implementing public authorities be provided and made publicly available, as well as data on the annual trend of energy savings;

(f) monitoring of the results and taking appropriate measures if progress is not satisfactory;

(g) the energy savings from an individual action are not claimed by more than one party;

(h) the activities of the participating party, entrusted party or implementing public authority are shown to be material to the achievement of the energy savings claimed;

(i) the activities of the participating party, entrusted party or implementing public authority have no adverse effects on people affected by energy poverty, vulnerable customers and, where applicable, people living in social housing.

4. In determining the energy savings from taxation-related policy measures introduced under Article 10, the following principles shall apply:

(a) credit shall be given only for energy savings from taxation measures exceeding the minimum levels of taxation applicable to fuels as required in Council Directive 2003/96/EC or 2006/112/EC ;

(b) short-run price elasticities for the calculation of the impact of the energy taxation measures shall represent the responsiveness of energy demand to price changes, and shall be estimated on the basis of recent and representative official data sources, which are applicable for the Member State, and, where applicable, on the basis of accompanying studies from an independent institute. If a different price elasticity than short-run elasticities is used, Member States shall explain how energy efficiency improvements due to the implementation of other Union legislation have been included in the baseline used to estimate the energy savings, or how a double-counting of energy savings from other Union legislation has been avoided;

(c) the energy savings from accompanying taxation policy instruments, including fiscal incentives or payment to a fund, shall be accounted separately;

(d) short-run elasticity estimates should be used to assess the energy savings from taxation measures to avoid overlap with Union law and other policy measures;

(e) Member States shall determine distributional effects of taxation and equivalent measures on people affected by energy poverty, vulnerable customers and, where applicable, people living in social housing, and show the effects of the mitigation measures implemented in accordance with Article 24(1), (2) and (3);

(f) Member States shall provide evidence, including calculation methodologies, that where there is an overlap in the impact of energy or carbon taxation measures or emissions trading in accordance with Directive 2003/87/EC, there is no double counting of energy savings.

5. Notification of methodology Member States shall, in accordance with Regulation (EU) 2018/1999, notify to the Commission their proposed detailed methodology for the operation of the energy efficiency obligation schemes and alternative measures referred to in Articles 9 and 10, and Article 30(14) of this Directive. Except in the case of taxation, such notification shall include information on:

(a) the level of the energy savings required under Article 8(1), first subparagraph, or savings expected to be achieved over the whole period from 1 January 2021 to 31 December 2030;

(b) how the calculated quantity of new energy savings required under Article 8(1), first subparagraph, or energy savings expected to be achieved will be phased over the obligation period;

(c) the obligated, participating or entrusted parties, or implementing public authorities;

(d) target sectors;

(e) policy measures and individual actions, including the expected total amount of cumulative energy savings for each measure;

(f) policy measures or programmes or measures financed under a national energy efficiency fund implemented as a priority among people affected by energy poverty, vulnerable customers and, where applicable, people living in social housing;

(g) the share and the amount of energy savings to be achieved among people affected by energy poverty, vulnerable customers and, where applicable, people living in social housing;

(h) where applicable, the indicators applied, the arithmetic average share and the outcome of policy measures established pursuant to Article 8(3);

(i) where applicable, impacts and adverse effects of policy measures implemented pursuant to Article 8(3) on people affected by energy poverty, vulnerable customers and, where applicable, people living in social housing;

(j) the duration of the obligation period for the energy efficiency obligation scheme;

(k) where applicable, the amount of energy savings or cost reduction targets to be achieved by obligated parties among people affected by energy poverty, vulnerable customers and, where applicable, people living in social housing;

(l) the actions provided for by the policy measure;

(m) the calculation methodology, including how additionality and materiality have been determined and which methodologies and benchmarks are used for deemed and scaled savings, and, where applicable, the net calorific values and conversion factors used;

(n) the lifetimes of measures, and how they are calculated or what they are based upon;

(o) the approach taken to address climatic variations within the Member State;

(p) the monitoring and verification systems for measures under Articles 9 and 10 and how their independence from the obligated, participating or entrusted parties is ensured;

(q) in the case of taxation:

(i) the target sectors and segment of taxpayers;

(ii) the implementing public authority;

(iii) the savings expected to be achieved;

(iv) the duration of the taxation measure;

(v) the calculation methodology, including the price elasticities used and how they have been established and (vi) how overlaps with EU ETS in accordance with Directive 2003/87/EC have been avoided and the risk of double counting has been abolished.