2015
European
Governance
Thom van
Willigen
S.N: 4132505
Thesis
supervisor:
Sebastiaan
Princen
Words: 28992
[KNOWING ENERGY USE
IS HALF THE BATTLE?]
Assessing and explaining transposition behavior and
enforcement of EU member states in relation to article 8 of the
Energy Efficiency Directive (2012/27/EU)
Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Abstract
This research assesses the transposed legal framework of article 8 Energy Efficiency
Directive in EU member states (the United Kingdom, The Netherlands, Italy, Germany,
Denmark and Slovakia) and explains the transposition behavior and enforcement in relation to
this article. It uses theoretical insights from several scholars associated with ‘implementation
research’. It uses the directives’ characteristics, the ‘goodness of fit’ and ‘world of
compliance’ approach as an analytical framework. The enforcement type in the Netherlands
and the UK is categorized based in the degree of ‘formality’ of the enforcement system. This
comparative case study does not attempt to generalize or test these theories per se, but uses
theoretical insight to inform the case study analysis. The ‘worlds of compliance’
characteristics appear to offer a typology that holds up whereas the degree of misfit does not
appear to be a significant factor driving transposition delays. The directive itself can be
considered ambiguous in some respects. These factors appear to have has an impact on the
somewhat troubled transposition of article 8 EED.
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Contents
Abstract ................................................................................................................................................... 1
List of Abbreviation ................................................................................................................................ 5
List of Figures ......................................................................................................................................... 5
List of Tables ........................................................................................................................................... 6
Chapter 1: Introduction ........................................................................................................................... 7
Research Question ............................................................................................................................... 9
Aim .................................................................................................................................................... 10
Outline ............................................................................................................................................... 10
Chapter 2: Energy Efficiency and Energy Audits ................................................................................. 12
Introduction ....................................................................................................................................... 12
Energy efficiency .............................................................................................................................. 12
Measuring Energy Efficiency ............................................................................................................ 12
Energy Efficiency Improvements ...................................................................................................... 14
Barriers to energy efficiency improvements ..................................................................................... 14
What factors mitigate barriers? ......................................................................................................... 16
Energy Audits .................................................................................................................................... 16
Energy management systems ............................................................................................................ 17
Motivations for energy efficiency ..................................................................................................... 17
Motivations to implement environmental management systems ...................................................... 18
Energy audits; self-evident? .............................................................................................................. 18
Chapter 3: Implementation of directives – general ............................................................................... 19
Introduction ....................................................................................................................................... 19
Timeliness ......................................................................................................................................... 19
Correctness ........................................................................................................................................ 19
Content of directive ....................................................................................................................... 20
Form and Methods......................................................................................................................... 20
Measures for application and enforcement.................................................................................... 20
Chapter 4: Analysis of contents and requirements of the EED ............................................................. 21
Preamble ............................................................................................................................................ 21
Objective, scope and nature of the directive ..................................................................................... 21
Types of substantive rules ................................................................................................................. 22
Substantive rules creating obligation for the member states ......................................................... 22
Substantive rules creating obligations for individuals ................................................................... 24
Ancillary provisions .......................................................................................................................... 25
Provisions addressing the institutions ............................................................................................... 26
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Chapter 5: Theories ............................................................................................................................... 27
General overview of theoretical work on implementation and Europeanization .............................. 27
Explanatory variables for varying implementation ....................................................................... 28
Directive – discretion and quality.................................................................................................. 29
State based approach ..................................................................................................................... 29
Interest based approach ................................................................................................................. 30
Overarching perspectives .............................................................................................................. 30
Relevance of explanatory variables ............................................................................................... 31
Enforcement ...................................................................................................................................... 31
Combining implementation and enforcement approaches ................................................................ 33
Chapter 6: Methodology ........................................................................................................................ 34
Introduction ....................................................................................................................................... 34
Design................................................................................................................................................ 34
Cases.................................................................................................................................................. 35
Operationalization ............................................................................................................................. 35
Dependent variables .......................................................................................................................... 36
Transposition ................................................................................................................................. 36
Enforcement system in MS: ‘accommodative’ or ‘formal’ ........................................................... 37
Independent Variables ....................................................................................................................... 43
Directive characteristics ................................................................................................................ 43
Member state and the directive...................................................................................................... 44
Member state characteristics ......................................................................................................... 45
Data collection................................................................................................................................... 45
Limitations ........................................................................................................................................ 47
Overview of variables and framework for analysis ........................................................................... 49
Chapter 7: Transposition ....................................................................................................................... 50
Timeliness ......................................................................................................................................... 50
Correctness ........................................................................................................................................ 51
The United Kingdom ..................................................................................................................... 51
The Netherlands ............................................................................................................................ 53
Italy................................................................................................................................................ 54
Germany ........................................................................................................................................ 55
Denmark ........................................................................................................................................ 56
Slovakia ......................................................................................................................................... 57
Overview of transposition of substantive national legislation........................................................... 58
Chapter 8: Enforcement system............................................................................................................. 60
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Introduction ....................................................................................................................................... 60
United Kingdom ................................................................................................................................ 60
Indicators enforcement system: Industry level .............................................................................. 60
Indicators enforcement system: Enterprise level ........................................................................... 60
The Netherlands ................................................................................................................................ 65
Indicators enforcement system: Industry level .............................................................................. 65
Indicators enforcement system: Enterprise level ........................................................................... 65
Overview ........................................................................................................................................... 68
Chapter 9: Factors explaining differences ............................................................................................. 70
Article (Directive) characteristics...................................................................................................... 70
Clarity of obligations and concepts ............................................................................................... 70
Nature of the directive and discretion in relation to requirements ................................................ 71
Member state and the directive.......................................................................................................... 75
National approaches to energy auditing ........................................................................................ 75
Conclusion from goodness of fit assessment ................................................................................. 81
Member state characteristics - transposition ..................................................................................... 81
Chapter 10: Conclusions ....................................................................................................................... 83
References ................................................................................................. Error! Bookmark not defined.
Appendix ............................................................................................................................................... 93
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
List of Abbreviation
Abbreviation Meaning
ECJ
European Court of Justice
EED
Energy Efficiency Directive
ESD
Energy Services Directive
EMAS
Eco-Management and Audit Scheme
EMS
Enviromental Management System
EnMS
Energy Management System
ENEA
Italian National Agency for New Technologies, Energy
EU
European Union
Gesetz über Energiedienstleistungen und andere
EDL-G
Energieeffizienzmaßnahmen
DIN
German Institute for Standardization
ISO
International Organization for Standardization
NEEAP
National Energy Efficiency Action Plan
TEU
Treaty on European Union
TFEU
Treaty on the Functioning of the European Union
STI
Slovak Trade Inspection
SIEA
Slovak Innovation and Energy Agency
List of Figures
Figure 1: Overview of definitions of compliance and enforcement
8
Figure 2: Text in 2012/27/EU that established the obligation and possible exemption in
relation to mandatory energy audits for non-SMEs
25
Figure 3: Text in 2012/27/EU pertaining to potential penalties
26
Figure 4: Pyramids of enforcement strategies on industry and enterprise level: figures taken
from: (World Health Organization, 1999)
32
Figure 5: Overview of elements comprising enforcement style
38
Figure 6: Overview of variables and relations
49
Figure 7: Minimum requirement energy audits from EED, ANNEX VI
74
Figure 8: Article 16 EED on auditor requirements
75
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Figure 9: Share of energy savings an application of the EED
Appendix
Figure 10: Visual representation EnMS
Appendix
List of Tables
Table 1: Operationalization for research question and data collection method
47
Table 2: Overview of timeliness of transposition per member state in months of delay
51
Table 3: Substantive rules energy audits and auditor obligations
59
Table 4: Fines corresponding to different offences in the UK
61
Table 5: Overview of scores enforcement system in the UK and the Netherlands
69
Table 6: Overview of more specific requirements in member states
73
Table 7: Overview of auditor qualification schemes
74
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Chapter 1: Introduction
Concerns about the environment, energy security and competitiveness appear to have
aggravated across Europe as a result of climate change, renewed tensions with Russia and a
shift of the economic center of gravity to Asia. Increasing energy efficiency has become an
important policy goal in recent years as it is seen as a means of helping to mitigate these
problems to some degree. This is because increasing energy efficiency is considered to be a
cost-effective way of limiting carbon dioxide emissions without negatively impacting
economic productivity, increasing energy security by reducing dependence on third country
energy suppliers and fostering technological innovation and competitiveness.
The European Union (EU) has been conferred competences by its member states to
introduce legislation in certain policy fields. It exercises this competence trough issuing legal
acts. Arguably the most important legal acts is the directive. Directives are binding as to the
results to be achieved. This means that the requirements that are determined in these
directives need to be implemented all member states. (Chalmers, Davies, & Monti, 2010a)
Directive 2012/27/EU on energy efficiency, better known as the Energy Efficiency
Directive (EED), became part of EU secondary law with its entry into force on the 4th of
December 2012. The Directive aims to establish ‘a common framework to promote energy
efficiency within the Union’. (Energy Efficiency Directive, 2012) Through this common
framework, energy efficiency may increase by some 20 percent by the year 2020 (Energy
Efficiency Directive, 2012) Implementing this article in a timely and correct manner is of
importance in ensuring a part of the EU’s strategy in relation to energy efficiency. (See: figure
1 in annex for estimation of relative importance of article 8)
While the implementation of the EED in its entirety should establish a broad
framework for increasing energy efficiency, the directive as a whole is too broad to serve as a
concise subject of study. Consequently, in this research one of the most salient aspects of this
directive will be singled out: article 8, paragraph 4 to 7 (hence: article 8). This article sets the
EED apart from its predecessor, the Energy Services Directive (ESD), in that is places an
obligation on enterprises to conduct periodical energy audits.
Implementation should be seen as a concept that encompasses several elements
leading to a desired state. One can make a distinction between two phases of implementation.
This recognizes that there is a difference between the conversion of a directive into national
law and the actions that member states may need to undertake related to its enforcement, such
as the creation or amendment of the functioning of agencies or the creation of tools or
instruments in the member states. The first phase of conversion, or transposition, of a
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
directive into the national legal order is considered the legal aspect of implementation. The
second phase relation to the enforcement of the national legal provisions in retaliation to
national regulated actors is often referred to as the ‘practical’ implementation.
There is great potential for confusion when using these similar concepts.
Consequently, ‘transposition’ will be used to indicate the first phase mentioned above. It will,
be defined as: “conversion on paper of international commitments to domestic law”. (Haas,
1998) The second phase shall be referred to as ‘enforcement’. Enforcement should be seen as:
“all dealings between enforcement agencies and firms to ensure compliance”. (Johnstone &
Sarre, 2004) Enforcement is not always exclusive to dealings between the government and
regulated entities i.e. firms of individuals. It can also be used in relation to the government i.e.
member states and the EU. When member states fail to transpose directives in a correct and
timely manner, ‘enforcement’ can be used to refer to the actions that are taken by the
commission as ‘guardian of the treaties’ to ensure that member states take action to rectify the
situation. (Chalmers et al., 2010a) However, in this research, ‘enforcement’ shall generally be
used to indicate the action taken by the member state in relation to firms.
The aforementioned definition of enforcement introduces the concept of compliance.
Another confusing concept, it is also used in different ways by authors to indicate a certain
state of things or action. Some authors use it in relation to the EU and its member states to
indicate ‘whether countries in fact adhere to the provisions of the accord and to the
implementing measures that they have instituted’. (Weiss & Jacobson, 2000) While this
conception refers to the international level of analysis i.e. the EU in relation to its member
states another way of characterizing the concept is possible. At the national level,
‘compliance’ is used to indicate “the steps firms take to meet regulatory requirements”.
(Johnstone & Sarre, 2004) Both conceptions are valid and useful. Consequently, when the
word ‘compliance’ is used in this research, it shall also include a reference to whom in
relation to what.
EU
Member State
Individuals/enterprise
s
Compliance: steps MSs take in transposing
directive based on art. 4 TEU; sincere
cooperation. Enforcement: article 258 TFEU
when failing to transpose directives
Compliance: “the steps firms take to meet
regulatory requirements”. (Johnstone & Sarre,
2004). Enforcement: “all dealings between
enforcement agencies and firms to ensure
compliance”. (Johnstone & Sarre, 2004)
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Figure 1: overview of definitions of compliance and enforcement
Due to the nature of directives; maintaining a balance between the responsibilities of
member states and the EU, difficulties with regard to implementation can occur.
“Implementation and enforcement of environmental legislation go to the heart of Community
policy. But Community environmental legislation is being widely disregarded, and the
Community has paid insufficient attention to how its policies can be given effect, enforced or
evaluated.” (European Commission, 1997)
The timely and correct transposition of the requirements in the directive into the
national legal framework is a necessary precursor to achieving the objective set out by the
directive. Moreover, the transposition must be complemented with provisions on enforcement.
The type of which is entirely the member state’s discretion. Note that these elements say little
about the overall effectiveness of the policy in relation to increasing energy efficiency. The
actual merit of the provisions of the directive is beyond the scope of this research and may be
assessed at a point in the future when the effects are visible. In other words, this research is
limited to assessing the extent to which the provisions of article 8 (resulting from the timely
and correct transposition and enforcement) is applied in the EU and to providing for an
explanation as to what factors contribute to a divergence in relation to these timely and correct
transposition and the type of enforcement across the EU.
Transposition of the EED as a whole can be considered problematic. In March 2015,
all member states -save for Malta- were hit with infringement procedures. (Crisp, 2015)
Whether article 8 EED has been transposed individually is unclear.
Research Question
Consequently, the question that will be answered in this thesis is:
“How has article 8 EED been transposed and enforced in member states and what explains
transposition behavior of member states?”
Due to the nature of directives, differences in implementation are to be expected. The
main issue in this research is the extent to which all provisions of article 8 are transposed in a
timely and correct manner and to what extent the obligation that results from the transposition
is credibly enforced by member states.
In order to answer this question, the following sub-question will need to be answered:
Are there differences in the transposition of article 8 EED?
How is enforcement of an energy audit obligation organized in member states?
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
How can differences in transposition and enforcement be explained?
When an analysis of the legal framework that implements article 8 indicates that there
are differences in the timeliness and correctness of transposition it is imperative to establish
the factors that contribute to these so that these may be addressed in order to ensure the
application of the directive and thus the useful effect of this part of the EU legal order.
Consequently, the same logic applies to the enforcement to the provisions of the article.
Aim
By charting the implementation and enforcement of article 8 EED, this study will
provide insight into the aspect of the EED what can be described as a ‘black hole’. Currently,
little is known in regards to the transposition and enforcement of this obligation, let alone the
factors that contribute toward the current state of affairs. By determining the factors in regards
to implementation mentioned above, implementing agencies or ministries in various EU states
may achieve a more in depth look at current practices and potentially determine ways to
diminish unequal obligation for enterprises as a result of differences in implementation.
Outline
The research is outlined as follows; chapter 2 explains what energy efficiency is and
how energy audits can contribute to its increase in relation to enterprises. This chapter is
serves as a general background. This research is placed in the realm of public
administration/European studies, which means that the target audience may not be familiar
these substantive aspects. This chapter thus provides this necessary context.
Chapter 3 is used to set the stage for the analysis of the EED. The purpose and
components of directive in general are explained. Consequently, it looks at the components
that determine when a directive is ‘properly’ implemented.
Chapter 4 provides a comprehensive, but general, overview of the EED. All
components of the EED are discussed according to the guidelines laid in in chapter 3.
Consequently, article 8 and its requirements are analyses in-depth.
Chapter 5 discusses the relevant theories in the field of implementation,
Europeanization and enforcement literature. These theories serve to inform the theoretical
framework in terms of the explanatory variables. This chapter starts with general overview of
30 years of literature before moving on to discuss the theories used in this research
specifically.
Chapter 6 is devoted to the methodology of this research. It elaborates on the merits of
this research as a case study; it operationalizes the different measures corresponding to the
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
dependent and independent variables. Lastly, it discusses the broader academic relevance and
limitation of this study.
The analysis in chapters 7 and 8 are what is considered to be the dependent variables.
They establish the measures on timeliness and correctness of transposition and the
enforcement system. In other words, it can be considered the extent to which member states
comply with article 8 of the EED. Consequently, chapter 9 looks at the extent to which the
transposition behavior of member states can be explained by the factors that have been
established in the literature.
Chapter 7 is used to analyze the national legal framework that is meant to transpose
article 8 EED. It assesses the extent to which the transposition has been timely and correct in
the selected cases.
Chapter 8 analyses the enforcement system in a selection of member states. The
enforcement system can be considered a more in-depth analysis of the entire implementation
process. Due to practical constraints, this analysis is made based on smaller selection of
member states than in relation to the transposition.
As mentioned above, chapter 9 analyses transposition behavior of member states based
on theoretical viewpoint that have been discussed in chapter 5 and operationalized in chapter
6.
Lastly, chapter 10 serves as a conclusion to this research. The findings in terms of
transposition behavior and its explanations are discussed and points of discussion for further
research are mentioned.
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Chapter 2: Energy Efficiency and Energy Audits
Introduction
Because this research focusses on an article of a directive that is specific to energy
efficiency, an explanation of the substantive aspects of this directive is warranted and shall
grant greater insight into the topic at hand.
Energy efficiency
As a general concept, energy efficiency is relatively straightforward. It can be thought
of as; “the ratio of the useful output of a process in terms of any good produced that is
enumerated in market process, to energy input” (Patterson, 1996). This general way of
approaching what constitutes energy efficiency is also followed by the Commission in
relation to the EED, as energy efficiency is defined as: “the ratio of output of performance,
service, goods or energy, to input of energy”(European Parliament, Council of the European
Union, 2012). In this context, energy is defined as: ‘energy products, combustible fuels, heat,
renewable energy, electricity, or any other form of energy’ (Ibid.).
It follows from the previous definitions that an improvement in energy efficiency is
the result of: “technological, behavioral and/or economic changes” (European Parliament,
Council of the European Union, 2012).
Two related but dissimilar concepts are energy saving and energy conservation. The
former is oftentimes described as the outcome of the successful implementation of energy
efficiency improving measures or the: “amount of saved energy determined by measuring
and/or estimating consumption before and after implementation of an energy efficiency
improvement measure, whilst ensuring normalization for external conditions that affect
energy consumption”(Ibid.). The latter, energy conservation, can be understood “as reducing
or going without a service to save energy” (Lawrence Berkeley National Laboratory, 2015).
Measuring Energy Efficiency
Generally speaking, there are four indicators that are used to monitor changes in
energy efficiency: thermodynamic, physical-thermodynamic, economic-thermodynamic and
economic (Patterson, 1996).
First of all, thermodynamic indicators are in some ways the ‘most natural and obvious
way to measure energy efficiency’ as thermodynamics is the ‘science of energy and energy
processes’ (Ibid.). Traditionally, it measures the heat content, or potential. The
thermodynamic indicators are a measure of the thermal, or enthalpic, efficiency. Enthalpic
efficiency is the sum of the ratio of useful energy output of a process to input into a process.
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Patterson uses the example of a lightbulb: it has an enthalpic efficiency of around six percent.
This means that six percent of the input of energy (electricity) is converted to the desired
output (light energy) and 94 percent is converted to ‘waste’ heat (Patterson, 1996, 378). One
flaw with this straightforward measurement of energy is the fact that it does not differentiate
between energy quality. This means that thermodynamic indicators are unsatisfactory
indicators in general in a policy context as they are related to a process and do not allow for a
comparison across different processes with different energy input and output. They are thus
less suited for macro-level use (Patterson, 1996, 386).
Second, physical-thermodynamic indicators represent a measurement that may be
more relevant to consumers than heat potential, as it measures some type of physical output.
The type of output is dependent on the specific use being measured. For instance, in relation
to transport, the output is likely to be described as distance. In other words, the energy
efficiency is the sum of the ratio between output in a physical unit (kilometers) and the
change in energy input.
Third, economic-thermodynamic indicators are important as they are often used as
macroeconomic indicators of a nation’s energy efficiency. While the energy input is still
measured in terms of a thermodynamic indicator, the output is described in terms of the
market value of the output.
Lastly, substituting the thermodynamic input measurement of the previous category,
economic-thermodynamic indicators are important as they are often used as macroeconomic
indicators of a nation’s energy efficiency. While the energy input is still measured in terms of
a thermodynamic indicator, the output is described in terms of the market value of the output.
While an important indicator, it is often criticized due to some supposed conceptual and
methodological issues. For instance, it generalizes in terms of the sectorial mix of an economy
(Jenne & Cattell, 1983), the technical energy efficiency (Wilson, Trieu, & Bowen, 1994), as
well as a change in terms of the mix used as energy input (Liu, Ang, & Ong, 1992). A related
concept in terms of macroeconomic indicators related to energy is the energy productivity
ratio which is calculated by dividing the GDP by the total energy consumption (Patterson,
1996).
There are several different ways of measuring energy efficiency and some
measurements are associated with both conceptual and methodological problems. The
measurement that appears to have inspired the Commissions definition in the EED is based on
physical-thermodynamic indicators.
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Energy Efficiency Improvements
The previous section has shortly dealt with the definitions of energy efficiency and in
what ways it can be measured. However, this does not pertain to how energy efficiency
improvements come about. This is shortly elaborated upon in the following section.
Energy efficiency improvements are said to come “as a result of technological,
behavioral and/or economic changes” (European Parliament, Council of the European Union,
2012). This is a broad definition of what constitutes energy efficiency improvements as it
pertains to reducing the total input of energy in relation to the output of goods or services.
Increasing energy efficiency as a result of behavioral changes can be the result of switching of
central air-conditioning or lights off in unoccupied rooms etc. or adjustment of a certain
wastefulness in processes that are within the scope of the existing technology that are the
result of human behavior such as not switching computers into sleep mode after a certain
time. These actions can reduce the amount of energy input in a process without necessarily
reducing an output. However, in the context of energy audits technological developments are
significant factors in increasing energy efficiency.
A great deal of analyses with regard to energy efficiency focus on specific sector such
as: industry and manufacturing, transport, commercial and residential. These sectors can be
further subdivided or be divided differently based on certain characteristics. For instance,
industry can be subdivided based on different sectors such as: iron and steel, chemicals, food
drink and tobacco, pulp, paper and print etc. (Thollander & Palm, 2012). The type, potential
benefit and difficulty in implementation of increasing energy efficiency differ based on the
type sector to which an actor belongs and the type of activities it performs. These sector
specific divisions are less relevant in the context of article 8 of the EED, as it focusses on the
size of the enterprise, rather than the sector to which it belong or the types of activities it
performs.
While it is difficult to give an overview of concrete examples of energy efficiency
improving measures due to the diverse ways in which enterprises across sectors use energy,
there are arguable two overarching means of categorizing the type of energy efficiency
improvements as well as the type of enterprise.
Barriers to energy efficiency improvements
‘Potential’ implies that something does not occur at the level which is possible. This is
the case in relation to energy efficiency. Several explanations have been positioned to indicate
the reasons for this based on empirical data. Three types of barriers prevent greater levels of
energy efficiency being reached.
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
(Thollander & Palm, 2012) distil fifteen main barriers derived from empirical research
which are subdivided into three categories.
First, there are economic barriers (both market and nonmarket) which consist of
imperfect information, adverse selection, principal-agent relationship, split incentives, hidden
cost, and limited access to capital, risk and heterogeneity. One speaks of imperfect
information in relation to energy efficiency improvements when: “Information about energyefficiency options is (…) incomplete, unavailable, expensive and difficult to obtain or trust”
(Intergovernmental Panel on Climate Change, 2007) Adverse selection occurs when
“suppliers know more about the energy performance of goods than purchasers”, (Thollander,
Palm, & Rohdin, 2010) which can lead to “purchaser selecting goods: “on the basis of visible
aspects such as price.” (Thollander et al., 2010) The principle-agent theory applies insofar as
it has been shown that stringent monitoring by the principle can result in energy efficiency
measures being ignored because the principle cannot see what the agent is doing. (Thollander
et al., 2010) Split-incentives occur “when participants in an economic exchange do not share
the same goal.” (Charlier, 2014) In relation to energy efficiency this can occur when the
person buying appliances, installations or building do not receive the benefits associated with
lower energy use which is usually has a higher initial investment cost. In other words, there is
no incentive to invest more in energy efficient equipment. Hidden cost and access to capital
are more self-explanatory. The former pertains to costs such as overhead, collecting
information etc. resulting in a negative incentive to engage in activities that may increase
energy efficiency. The latter simply means that there is little capital available to make energy
efficiency improving investments. (Thollander et al., 2010) In regards to risk, it can be said
that people are usually risk averse, thus only energy efficiency improving measures with short
pay-back times are undertaken. (Hirst & Brown, 1990) Heterogeneity means that not all
energy efficiency improving technologies are cost-effective in the same way for different
enterprises. (Jaffe & Stavins, 1994)
Second, behavioral barriers consist of information not receiving enough attention due
to its forms, perceived credibility of the information provider, values/moral commitment,
intertia and bounded rationality. The former two factors are self-explanatory. Moral
commitment pertains to the influence of norms on energy efficiency, where norms are a:
“concern for the environment and a moral commitment to use” (Thollander et al., 2010)
Inertia “means that individuals and organizations are, in part, creatures of habit and
established routines, which may make it difficult to create changes to such behaviors and
habits.” (Thollander et al., 2010) Bounded rationality refers to the notion that enterprises are
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
constituted of many different actors with potentially conflicting interest. Thus, the classical
presumptions on utility maximizing rational actors do not always hold. (Thollander et al.,
2010)
Thirdly, organizational barriers that consist of lacking power of an energy controller in
an organization and organizational culture (Thollander & Palm, 2012). Organizational culture
refers to the potential difference between the values of workers and executives. (Thollander et
al., 2010)
What factors mitigate barriers?
Ultimately, increasing energy efficiency is a choice by an enterprises’ management.
Management has several priorities, and the position that energy efficiency has on that list can
be indicative of how much energy saving will occur at that enterprise (Smith, Mitchell, &
Summer, 1985). While investment choices depend on several factors, what is clear is that
knowledge on energy savings potential and the cost of investment are a necessary precursor.
This knowledge is the result of either internal or external procedures that are designed to do
so, the so-called energy audit.
Energy Audits
An energy audit can be described as a: “process or methodology to find out power
consumption according to different areas and in various slots of time, total connected load,
maximum demand, power factor, load factor and most importantly it proposes economic
measures to save energy with detailed comparison of cost of energy saving and investment
required in terms of payback period” (Gupta, Gaur, Vyas, & Pandey, 2015). The results from
this process are to be presented to the owner in the form a report that contain information for
the manager or otherwise responsible individual in the enterprise on what recommended
modification can lead to increased energy savings. An energy audit contains the following
steps:
1) Collection and analysis of historical energy use.
2) Study of the building and its operational characteristics.
3) Identification of potential solutions that will reduce the energy use and/or cost.
4) To perform an engineering and economic analysis of potential modifications.
5) Preparation of rank-ordered list of appropriate modifications.
6) Preparation of an audit report to document the analysis process and results.
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(Gupta et al., 2015)
Conducting an energy audit appears to be a rational decision.1 However, as indicated above,
these decisions are not as purely rational as is oftentimes assumed. A great deal of factors may
prevent the investment decision; however, these may also prevent a decision to conduct an
energy audit. If information on energy saving potential is unknown, but it can be seen as a
high priority for an enterprise, then conduction an energy audit is an easy way of ascertaining
this knowledge. However, if energy efficiency has a low priority, for whatever reason, it is
unlikely that conducting an energy audit will have a high priority.
One rationale that can result from this is that of saving potential is known, than it is
more likely that energy efficiency investments will occur. Once the potential for savings is
known by management through energy audits, rationality should result in certain costeffective measures being taken by management.
Energy management systems
Environmental and energy management systems based on relevant international
standards are usually referred to by those management systems developed by the International
organization for Standardization (ISO); ISO 14001 and 50001, respectively. The ISO was
established in order to develop certain common standards for the purpose of facilitating the
exchange of goods and services. While energy use is one aspect of ISO 14001, ISO 50001
places sole emphasis on this aspect and specifically aims to reduce energy use in an enterprise
or organization. Certification of these systems is done by independent experts that assesses
whether the systems that have been implemented adhere to all relevant norms.
While many enterprises have prioritized increasing energy efficiency for a variety of
reasons, EU policy initiatives have been launched in order to increase the amount of
enterprise conducting energy audits or implement energy management systems. (see figure 10
in Appendix for visual representation of EnMS)
Motivations for energy efficiency
May, Taisch, Stahl and Sadr (2013) in (Emmanouilidis, Taisch, & Kiritsis, 2013) asses
the current state of energy efficiency in manufacturing and determine the following drivers as
motivations: a reduction of costs, reduction of the environmental impact, image improvement
and achieving sustainability targets are important. Changes in customer behavior and
compliance with legislation were considered relatively less important.
1
as long as the costs of the audit do not outweigh the benefit in terms of savings that are its indirect result
after a proposed measure is adopted
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However, as only the motivations of manufacturing enterprises that have a relatively
high level of energy use were incorporated in this context, this image on motivations may not
be indicative of a general predisposition to the importance of energy efficiency.
Motivations to implement environmental management systems
There is little empirical work that examines the motivations for conducting energy
audits or implementing energy management systems. However, work has been done in
relation to energy management systems. While environmental management systems are
broader in terms of the scope of enterprise behavior they can potentially impact, the general
presumptions that inform the uptake of either system can be considered similar.
The main factors said to influence the uptake of environmental management systems
in enterprises are reducing cost; resulting in competitive advantages (Kirkpatrick & Pouliot,
1996) and mitigating consumer pressures that can be exerted on an enterprise calling for
environmental and socially responsible behavior (Clark, 1999). Others distinguished the
desire to prevent negative impacts on the environment, improve environmental awareness
among employees, responding to consumer demands, improving the corporate image
(Ruddels and Stevens, 1998). In a large scale study, Florida and Davidson (2001) established
that a commitment to improve the environment was the strongest motivation for adopting
environmental management systems, followed by opportunities to obtain environmental goals,
achieving economic benefits, regulatory climate and improved community relations.
Energy audits; self-evident?
Enterprises conducting energy audits and implementing energy efficiency improving
measures may appear to be rational. However, it is clear that, based on a variety of reasons, it
is not self-evident that it will occur. The mandatory energy audit aims at remedying a barrier
to information to implementing energy efficiency improvements. However, management of
enterprises that is unwilling or uninterested in the way the obligation has been set up, or the
obligation in itself, may not agree. If an obligation is viewed an additional cost than noncompliance can become an issue. The extent to which this can be the case and to what extent
the mandatory energy audit requires coercive measures to be effectively implemented will; be
elaborated upon the following chapters.
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Chapter 3: Implementation of directives – general
Introduction
The Van Gent and Loos judgement by the European Court of Justice (ECJ) established
that EU law constitutes and autonomous legal order. This autonomous legal order is governed
by three basic principles: supremacy, direct effect and loyal cooperation. Member states thus
have a duty to implement EU law. This applies to all three sources of EU law: primary,
secondary and general principles. With primary law referring to the treaties, secondary law
pertains to EU legal acts. These legal that that make up secondary EU law are: regulations,
directives, decision, opinions and recommendations. The first three instruments are either
directly binding, or as to the results to be achieved. The latter two are not binding. (Chalmers
et al., 2010a)
Member states are required to achieve the result of a directive, however, it is not
always clear whether member states actually take sufficient action to do so. Member states are
allotted an amount of time that is specified by each directive to implement the directive.
While dependent on the objective, nature, and purpose of the directive, it is clear that
late or incorrect implementation can have negative consequences. It may result in unequal
conditions across different EU member states, or deprive EU citizens of certain benefits.
(Commissie, 2004)
Timeliness
Two fundamentally important requirements need to be met in order to speak of proper
implementation of directives: timeliness and correctness.
First of all, timeliness is an important aspect of implementing directives. The
Commission actively ensures that directives are implemented in a timely manner. Member
states must notify the Commission of implementation of a directive. The Commission may
choose to initiate infringement procedures on the basis of article 258 TFEU in a case where
member states have not done so. (Chalmers et al., 2010a)
Correctness
The second element to implementation is correctness. The element is assessed by the
ECJ based on three dimensions: the content of national transposition measures, forms and
methods and the extent to which provisions for effective application and enforcement are
included. (Prechal, 1995) It is clear that existing national legislation may not be in conflict
with what the directive requires of the member state.
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Content of directive
Directives generally consist of a preamble, substantive rules and ancillary rules. A
preamble elaborates on the necessity and reason for existence of the directive. Substantive
rules can create obligations for member states as well as for individuals. They can demand a
certain legal or factual situation that must be realized by the member states or impose an
obligation or prohibition while potentially determining some procedural elements as well as
determining the degree to which national derogation is possible. (Prechal, 1995)
Transposition of a directive can be verbatim as well as through a translation.
(Mastenbroek, 2007) The difference being that the former constitutes a literal translation of
the directive and the latter a situation where the directive is translated into concepts of the
national legal system.
Form and Methods
‘Form and methods’ is a concept and that is usually left undefined, however, three
principles must be adhered to in relation to ‘forms and methods’ of implementation. First,
effective judicial protection requires that the measures used to implement the provisions of the
directive are legally binding in national law, rather than non-binding such official instructions.
Second, legal certainty dictates that transposed provisions from a directive have the same
legal force as national laws. (Chalmers, Davies, & Monti, 2010b) Third, the notion on
securing the useful effect of directives should compel member states to ensure the continued
and full application of the directive even take into account possibly decentralized
transposition. (Prechal, 1995)
Measures for application and enforcement
In regard to measures for application and enforcement, there are four factors that need
to be addressed adequately by member states. First, the mechanisms for monitoring and
verification need to be embedded in the national legal system. Second, the national actors i.e.
agencies that are responsible for the application and their competences in relation to of the
transposed provisions need to be prescribed a clear and specific task. (Veltkamp, 1998)
Prechal (1995) states that member state must develop an appropriate system of sanctions, for
instance based on criminal civil or administrative law that is similar to sanctions for violation
that are similar under national law on order to ensure effective enforcement. Consequently, a
system ensuring judicial protection must also be in place.
The following section analyses the energy efficiency directive as a whole based on the
aforementioned characteristics with the purpose of providing further context as well as an indepth look at the requirements posed by article 8.
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Chapter 4: Analysis of contents and requirements of the EED
Preamble
As the principle of subsidiarity is clear in establishing the virtue of addressing policy
issues in the EU at the level closest to the citizen, directives generally have to justify its
existence in this section.
The EED is no different and starts with a preamble. After paying regard to the
opinions and roles of the different EU institutions, its sets out in the opening paragraphs that
there is a: “need to increase energy efficiency in the Union to achieve the objective of saving
20 % of the Union’s primary energy consumption by 2020 compared to projections” (par. 2,
EED) in order to mitigate several crises facing the Union as a result of “increased dependence
on energy imports and scarce energy resources, and the need to limit climate change and to
overcome the economic crisis” (par 1, EED) through increasing energy efficiency which is
seen as: “a valuable means to address these challenges”. (par. 1, EED) Increasing energy
efficiency fits into the broader scope of the EU 2020 strategy (par 6, EED)
Because there were previous directives already governing energy efficiency related
matters, the preamble continues and justifies the specific need for this new directive.
Paragraph 7 continues: “the Conclusions of the European Council of 4 February 2011
acknowledged that the Union energy efficiency target is not on track and that determined
action is required” and “it is necessary to update the Union’s legal framework for energy
efficiency with a Directive” (par. 10, EED).
The preamble continues by providing an explanation, justification and statements of
purpose in relation to the different energy efficiency related aspects that are covered by the
directive. These aspects are elaborated upon in the section that follows which deals with the
substantive part of the directive.
Objective, scope and nature of the directive
The first chapter following the preamble sets out the subject matter and scope of the
directive. It “lays down rules designed to remove barriers in the energy market and overcome
market failures that impede efficiency in the supply and use of energy” (art. 1.(1), EED) by
“establishing a common framework of measures for the promotion of energy efficiency within
the Union in order to ensure the achievement of the Union’s 2020 20 % headline target on
energy efficiency and to pave the way for further energy efficiency improvements beyond that
date”. In terms of its nature, the EED can be considered a minimum directive. It lays down
certain minimum requirements by explicitly mentions that it “shall not prevent any Member
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State from maintaining or introducing more stringent measures”. (art.1(2), EED) Article 2
continues by establishing working definitions of the relevant concepts that are dealt with in
the directive. The legal basis for this directive lays with article 194 TFEU which confers to
the EU rights to make energy policy “in the context of the establishment and functioning of
the internal market” (art. 194, TFEU).
Types of substantive rules
Substantive rules can be considered as consisting of one of several types, which are
can be directed at different actors. As mentioned in the previous chapter, Prechal (1995)
distinguishes some four types of substantive rules. They can: specify a legal or factual
situation to be realized by member states, involve prohibitions or obligations, and leave
discretion in the result to be achieved or pertain to substantive or procedural result to be
achieved. The actors that these types of substantive rules may be addressed at are member
states or individuals. This last type of substantive rule, pertaining to procedural requirements,
may result in a degree of tension between the procedural requirements mentioned in the
directive and the directive as an instrument which usually leaves this aspect to the discretion
of member states.
The framework for increasing energy efficiency appears to be comprehensive and is
somewhat lengthy and complex. Thus, the provisions creating substantive rules will be shortly
mentioned; however, the main analysis will pertain to article 8 and follow in the section
subsequent to this one.
Substantive rules creating obligation for the member states
The substantive rules of the directive pertain to energy efficiency in both the use and
supply of energy which impose an obligation on member states as well as other requirements
that are addresses to member states. Moreover, there are substantive rules that should create
an obligation for individuals. The article that is the subject of this research; article 8 is an
obligation in the latter category.
Energy Use
First of all, member states are required to establish a long-term strategy for mobilizing
investment in the renovation of buildings (article 4, EED).
Secondly, member states are required to renovate 3 percent of the total floor area in
buildings owned by the central government should be renovated each year according to
certain minimum energy performance requirements.
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Thirdly, central governments are required to purchase only products, services and
buildings with high energy efficiency performance as long as it can be considered as being
consistent with certain values treated to completion, feasibility, technical requirements and
wider sustainability (art. 6(1), EED). Moreover, the member state central government is
required to encourage public bodies and governments at the regional or local level to follow
suit as the central government should play an exemplary role in these matters (art. 6(3), EED).
Forth, member states must ensure that individual consumers are provided with
competitively proceed individual meters that can provide accurate insight into that
individuals energy consumption, provided that providing these meters is technically possible
and financially reasonable (art. 9(1), EED).
Fifth, when the previously mentioned meters are unavailable, member states must
ensure that final consumers have access to billing information on their energy use that is
accurate and based on actual consumption. (art. 10(1), EED). Receiving these bills, as well as
having access to consumption data, must be free of charge for consumers. (art. 11(1), EED).
While this article may be interpreted as imposing an obligation on individuals in the form of
energy providers, it does not expressly mention that member states must ensure that energy
providers make available information to final consumers. Consequently, it is not included in
the paragraph on ‘substantive rules creating obligations for individuals’.
Lastly, member states may use a range of instruments and policies to promote
behavioral change to ensure that the efficiency use of energy by energy customers. Such
instruments and polices may pertain to fiscal incentives, grants or subsidies, information
provision, exemplary projects and workplace activities.
Energy Supply
Article 3 EED pertains to energy efficiency target that need to be set by member
states. They are required to set indicative national energy efficiency targets that will be in
accordance with achieving the aggregate energy savings goal in 2020 and notify the
Commission of those targets. Consequently, the Commission asses the degree to which these
targets are adequate in achieving the goals that are set out. (art. 3.3 EED)
Article 14 EED sets out that member states must carry out comprehensive assessments
for the application of high-efficiency cogeneration and efficient district heating and cooling.
This assessment must fulfill certain requirements, such as including a cost-benefit analysis art.
14(3), EED).
Moreover, member states must ensure the existence of several incentives in relation to
the possibility of increasing energy efficiency in the transformation, transmission and
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distribution of energy (art. 15(1), EED).
The requirements that the directive imposes on several aspects related to energy
efficiency of supply of energy are expansive and relatively technical in nature. Elaborating
upon them any further than what has already been done does not add anything to the analysis
of the directive and the research in general.
Other
These provisions that will be considered as separate form those related to energy
efficiency in supply and demand of energy, but that have to be ensured by the member states
will be elaborated upon below.
First of all, article 16 EED determines that member states must ensure that, where
necessary, there are ‘suitable’ training programs available for providers of energy services,
energy audits, energy managers and installers of energy-related building elements. Moreover,
member states must ensure that information on energy efficiency mechanisms and the
financial and legal frameworks is transparent and disseminated among all, relevant actors.
(art. 17(1), EED).
Member states must promote the energy services market and access for SMEs (art. 18,
EED), and where necessary, remove regulatory and non-regulatory barriers to energy
efficiency (art. 19 (1), EED).
Lastly, article 20 EED stipulates that member states shall set up financing facilities,
provides that they are in concordance with competition and state aid regulation enshrined in
article 107 and 108 TFEU, for energy efficiency improvement measures.
Substantive rules creating obligations for individuals
Article 7 states that energy sales providers will be required to, through a scheme of the
national governments, realize savings of 1.5 percent of the annual energy sales to final
consumers.
Article 8(4-7) should result in the imposition of a requirement for non-SMEs in the EU
to conduct periodical energy audits adhering to certain minim standards. This means that it is
a substantive requirement that should produce an obligation for individuals. It is phrased as
follows:
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Article 8
Energy audits and energy management systems
(…)
4. Member States shall ensure that enterprises that are not SMEs are subject to an energy
audit carried out in an independent and cost-effective manner by qualified and/or accredited
experts or implemented and supervised by independent authorities under national legislation
by 5 December 2015 and at least every four years from the date of the previous energy audit.
5. Energy audits shall be considered as fulfilling the requirements of paragraph 4 when they
are carried out in an independent manner, on the basis of minimum criteria based on Annex
VI, and implemented under voluntary agreements concluded between organisations of
stakeholders and an appointed body and supervised by the Member State concerned, or other
bodies to which the competent authorities have delegated the responsibility concerned, or by
the Commission.
Access of market participants offering energy services shall be based on transparent and nondiscriminatory criteria.
6. Enterprises that are not SMEs and that are implementing an energy or environmental
management system - certified by an independent body according to the relevant European or
International Standards - shall be exempted from the requirements of paragraph 4, provided
that Member States ensure that the management system concerned includes an energy audit on
the basis of the minimum criteria based on Annex VI.
7. Energy audits may stand alone or be part of a broader environmental audit. Member States
may require that an assessment of the technical and economic feasibility of connection to an
existing or planned district heating or cooling network shall be part of the energy audit.
Without prejudice to Union State aid law, Member States may implement incentive and
support schemes for the implementation of recommendations from energy audits and similar
measures.
Figure 2: Text in 2012/27/EU that established the obligation and possible exemption in relation to mandatory
energy audits for non-SMEs.
Ancillary provisions
Ancillary provisions pertain to the requirements that member states have in relation to
each other and the Commission, usually in terms of certain notifications. (Prechal, 1995)
The most important means for the Commission to assess the extent to which extent
member states adhere to their responsibilities in the context of the EED is through the
requirements of member state to report on progress made towards achieving the goals of the
directive through National Energy Efficiency Action Plans (NEEAPs) that are to be submitted
to the Commission every three years. (art. 24, EED) Furthermore, article 25 EED states that
the Commission shall establish an online platform with the purpose of fostering the practical
implementation of the directive in the member states. Consequently, article 28 EED
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determines that member states must ‘bring into force the laws, regulations and administrative
provisions necessary to comply with this Directive by 5 June 2014’. (art. 28(1), EED) This
date applies to the all provisions of the directive unless otherwise specified in an article.
Article 19 EED concludes with the requisite statement that the EED shall enter into force on
the 20th day following its publication in the official journal of the European Union. Lastly, in
order to ensure that the provisions that produce obligations for individuals are adhered to,
member states must lay down rules in relation to penalties.
Article 13
Penalties
Member States shall lay down the rules on penalties applicable in case of non-compliance
with the national provisions adopted pursuant to Articles 7 to 11 and Article 18(3) and shall
take the necessary measures to ensure that they are implemented. The penalties provided for
shall be effective, proportionate and dissuasive. Member States shall notify those provisions
to the Commission by 5 June 2014 and shall notify it without delay of any subsequent
amendment affecting them.
Figure 3: Text in 2012/27/EU pertaining to potential penalties
Provisions addressing the institutions
Article 22 EED determines that the Commission is empowered to adopt delegated acts
in order to review certain technical values that should be harmonized in relation to energy
efficiency in the supply of energy as it relates to heating and cooling. Article 23 EED
continues by determining the conditions under which the Commission may exercise the power
to adopt delegated acts.
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Chapter 5: Theories
General overview of theoretical work on implementation and Europeanization
The current state of scholarly work in terms of explaining variations on the timeliness
or correctness of the transposition of directives shows little signs of consensus or moving
toward a general theory. Several explanatory factors have been put forward over the years
with varying degrees of empirical success in terms of their explanatory power.
In the past three decades, a considerable amount of literature has emerged that aims to
account for various questions related to the implementation of directives. A central question
that arose in the mid-1980s pertained to the extent to which implementation of directives by
member states was lacking. The difference between the amount of directives that were issued
by the EU and the degree to which member states implemented this directive was referred to
as the ‘implementation deficit’. One of the first empirical studies in relation to the
implementation deficit was that of (Ziller & Siedentopf, 1988). The central question that was
under investigation was the extent to which member states are committed to ensure that
European polices ‘work’, which requires them to be implemented properly. The purpose was
to look at the extent to which a member states had transposed directives and what factors that
drive implementation of EU directives. Many authors followed suit in the subsequent years.
(Mastenbroek, 2005) attempts to chart the field and characterizes implementation studies
conducted between 1986 and 2005. She asserts that these studies can be categorized as being
part of roughly three ‘waves’ of research.
She characterizes the first wave as blacking strong theoretical frameworks.
(Mastenbroek, 2005) Explanatory factors, as they relate to poor implementation, were derived
from the legal administrative characteristics of the member state. She asserts that this view
had thus neglected the political process to a degree. (Mastenbroek, 2005) The political process
was considered to be important for some authors as they indicated that stakeholders within the
government such as parliaments and other interest groups could have an influence on the
implementation process. For instance, if parliament is not consulted at an early stage,
cooperation in implementation may be more difficult. (Krislov, Ehlermann, & Weiler, 1986)
The second wave is characterized as having emerged in the late 1990s and is related to
Europeanization. (Windhoff-Héritier, 2001) played an important role in developing the
influential ‘goodness of fit’ hypothesis which presumed that compliance is dependent on the
degree to which European policy requirements ‘fit’ with existing institutions on the national
level.
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As a result of the relatively disappointing explanatory power of the goodness of fit
hypothesis2, more work has come to include the domestic factors that were, to a degree, part
of the first wave of research, but somewhat marginalized during the second; the domestic
political, legal and administrative factors.
What many of these studies have in common is that they focus on transposition delays,
rather than looking at the correctness, mostly due to practical reasons. It is a significant
amount of work to establish the correctness of every implemented framework. Moreover,
correctness is usually seen as being connected with timeliness; a directive needs to be correct
in order for it to even be considered as fulfilling the criterion of timeliness.
What is more, it is rare that a distinction is made between directives as governing
different policy areas. In a desire to provide a theoretical framework for analyzing
transposition delays in general, the relevance of these factors was slightly overlooked.
Consequently, the most influential theoretical framework that arose during the second wave of
scholarly work: the goodness of fit hypothesis has produced mixed results in terms of its
explanatory value on its own. More often than not, it does not provide a complete explanation
for difficult transposition.
Explanatory variables for varying implementation
This research looks at the differences in the transposition and enforcement of an article
of the energy efficiency directive. It will offer an explanation for transposition behavior and
asses to what possible implications these differences may have on achieving the objective set
out by the directive. The effectiveness of the directive in general is beyond the scope of this
research and can be the subject of research in subsequent years, when the effects of
framework that the directive establishes become clear.
A general division between the types of explanatory factors that are proposed by
authors can be made. One approach pertains to those explanatory factors that are related to the
member state characteristics. (Thomson, 2009) refers to such factors as ‘state-centric’
explanations. Such explanations pertain to the administrative efficiency (Ciavarini Azzi,
2000) or the degree of corporatism.3 (Lampinen & Uusikylä, 1998) A second approach
focusses on the interests of domestic actors. (Steunenberg, 2007) refers to this perspective as
‘interest-based’. This perspective focusses on the way in which “the preferences of political
and administrative actors affect outcomes”. (Steuenberg, 2007) What these perspectives have
in common is that they tend to neglect the potential role of explanation beyond the member
2
3
As shown in the work of, for instance: (Falkner, 2005) and (Haverland, 2000)
i.e. the representation of socio-economic interests in the policymaking process.
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state level, such as factors pertaining to the directive that needs to be transposed. Beyond
these perspective, the directive itself is also increasingly looked it in explaining transposition.
Directive – discretion and quality
There are several factors in relation to the directive itself that have been indicated to
have an impact on transposition time. First of all, the amount of discretion that member states
have in implementing the directive. Empirical research has been inconclusive as to the exact
effects of this factor. On the one hand, there are authors whose research has shown that more
discretion leads to a less difficult and speedier transposition since more discretion makes it
easier to adapt the EU policy requirements on a national or local level. (Thomson, 2009) On
the other hand, the opposite can be the case; a greater degree of discretion can provide
grounds for political contestation. This potential for contestation can result in a more difficult
transposition process. (Steunenberg & Toshkov, 2009)
The quality of the directive is an aspect that is often associated with transposition
delays. The quality relates to the wording of the directive, its political statements, consistency
with other articles or directives etc. If these concepts are; vague, possessing unclear legal
status or inconsistent than transposition is likely to be delayed. (Xanthaki, 2001) However, in
relation this research, where the focus is on multiple member states and one article, this
dimension explanation should not impact one member state more than the other, unless there
is a difference in administrative resources or competences in that member state. This being
said, it is worth analyzing the directive in regards to these points when all member states do
not transpose the article in a timely manner.
State based approach
The state based approach corresponds to a great deal of the concepts that are associated with
the first wave of scholarly work mentioned above. The variables related to the legal
dimension that were defined in this context were: national constitutional characteristics
(Krislov et al., 1986), the quality and complexity of directives (Collins & Earnshaw, 1992),
the complexity of existing national laws (Ibid.), gold-plating (Dimatrakopoulos, 2001) and
national legal culture. (Collins and Earshaw, 1992) The variables related to the administrative
dimension included ‘Chinese Walls’ between implementation and preparation in member
states and ministries, coordination problems, lack of resources, ineffective institutions and
corporatism. (Ibid.)
(Duina, 1997) explains the variation in the speed4 and ‘extent’5 of transposition
4
Consisting of ‘timely, late, or failed’ implementation (Duina, 1997, 156)
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combined with an emphasis on the importance of institutional fit. He asserts that
implementation imposes demands on institutions of member states. These institutions refer to
the legal and administrative traditions of a nation and the way interest groups are organized.
In a case where these demands are low, adequate implementation will occur.
Interest based approach
This approach presupposes that “non-compliance or variations in the application of EU law
are regarded as the consequence of the differences in interests between actors”. (Steunenberg,
2004) Consequently, variation can constitute a delay in transposition or deviation from the
policy when domestic actors resist a directives implementation.
Overarching perspectives
Thomson (2009) argues that Falkner’s (2007) world of compliance theory offers the prospect
of integrating state-based and preference-based explanations. Falkner (2007) offers a type of
synthesis between the two approaches. Member states are seen as consisting of administrative
and political elites. Consequently, both factors form the state-based approach and the interestbased approaches are included.
(Falkner, Hartlapp, & Treib, 2007) suggested that a typology can be made between
different member states which are based on a certain national culture for dealing with the
requirements posed by directives. (Falkner, 2005) She describes the existence of three
‘worlds’6; the ‘world of law observance’7, the ‘world of domestic politics’8 and the ‘world of
neglect’9. The author distinguishes between two types of actors that the member states are
comprised of: political and administrative elites. In the first world, compliance (i.e.
transposition) is thought to be least problematic due to the desire to comply being the
dominant norm for both of these domestic elites. In regards to the second world,
administrative elites are compelled to comply, but political elites less so. The last world is
described as a situation where both elites adhere to the norm of compliance. (Falkner, 2005,
325) In the world of law observance; “the compliance goal typically overrides domestic
concerns” (Falkner & Treib, 2008) This is the result of a ‘compliance culture’. Moreover, this
world is typified by well-organized agencies and court systems. Conversely, in the world of
domestic politics, “obeying EU rules is at best one goal”. (Falkner & Treib, 2008) There is a
5
Defined as: ‘the degree to which the original directive is actually translated into national law’ measured by
‘the number of mofificyations introduced as the directive is translated into national law’ (Duina, 1997, 156)
6
The ‘worlds’ are comprised of member states before the enlargement in 2004, subsequent papers have
addresses the extent to which the notion of ‘worlds’ apply to the member states that joined the EU in 2004
7
Consisting of Denmark, Finland and Sweden
8
Consisting of Austria, Belgium, Germany, Ireland, Italy, the Netherlands, Spain and the UK
9
Consisting of France, Greece, Luxembourg and Portugal
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
greater propensity towards conflicts of interest. The result is that transposition is timely and
correct when there are no contradicting domestic interests. The problem does not lie with
enforcement of the obligations once transposed, but with the transposition itself. Lastly, in the
world of transposition neglect, there compliance with EU law “is not a goal in itself” (Falkner
& Treib, 2008)
Relevance of explanatory variables
The amount of explanatory variables and their potential impact on implementation is
enormous. Addressing all of them in relation to the implementation is impractical and
arguably not necessary. The main analytical perspective comes from the ‘goodness of fit’
theory. Subsequently, characteristics at of the directive and the member state itself are also
included. This broad approach is important because: “a comprehensive explanation of
compliance in Europe should ideally include state, policy sector and directive level factors in
the causal model” (Steunenberg & Toshkov, 2009) The operationalization of these factors is
established in the following chapter.
Enforcement
The literature on enforcement is vast and the term can be employed to describe different
processes. First of all, enforcement can pertain to the international level. Usually the
relationship between the EU i.e. the Commission and its member states is referred to in this
context. The commission is charged with guarding the treaties whereas member states are
supposed to implement directives into their national legal system. Where this implementation
is lacking, the Commission can use certain steps such as the imposition of fines which can be
qualified as enforcement. In this international context, the division is signified as that between
the enforcement and management approach (Tallberg, 2003). However, usually enforcement
is used to describe those actions at the national level of governmental bodies or actors vis-àvis individuals. Directives require legal norms to be translated to the national level. This
process of implementation consists of transposition and enforcement. Transposition shall
mean the adoption of the provisions into a national legal system. However, this does not
necessarily mean that the directive take effective. In order to be effective, the transposed laws
need to be enforced. This second stage of the implementation process pertains to a change in
behavior, procedures and resources within a member states or it’s enforcing agencies to
ensure that the provisions of the directive take effect.
There are two main models identified in the literature related to enforcement. One is based on
coercion and the other on cooperation. These models may be referred to by different names
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Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
depending on the context in which they are used. Malloy (2003) refers to the two in relation to
firms and defines the deterrence and normative model. Other names include command and
control or punishment-centered for the former and compliance or accommodative in relation
to the latter.
The ‘coercive’ extreme can best be characterized as ‘formal’ in contrast to the opposite;
‘accommodative’. These are more apt descriptions than coercive and cooperative as the latter
two may be construed as one being normatively superior to the other. In this research,
‘formal’ and ‘accommodative’ are considered to be more neutral terms that describe two ways
of approaching enforcement, neither being normatively preferable or inherently superior than
the other.
These interactions have been visualized in a pyramid of sanctioning strategies by Ayres and
Braithwaite characterize. The instruments that are commonly employed in what can be
described as an accommodative style are characterized as the least intrusive instruments and
are placed at the bottom of the pyramid. The severity of instruments can be increased when
compliance appears to be lacking. This pyramid can be used to describe the increasing degree
to which ‘formal’ instruments can be employed, both at the industry wide level as well as
pertaining to individual enterprises (Ayres & Braithwaite, 1992).
Figure 4: Pyramids of enforcement strategies on industry and enterprise level: figures taken from: (World Health
Organization, 1999)
Voluntary agreements can be described as supplements to command regulation or as an
alternative (Johnstone & Sarre, 2004). They can be placed on the bottom of the pyramid in
terms of the instruments that they use in order to incite compliance and the level of intrusion
of government they impose on enterprises.
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Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Combining implementation and enforcement approaches
The theoretical perspectives from the ‘implementation’ literature inform the analytical
framework explaining the timeliness and correctness of transition of article 8. The
enforcement approach can be considered separate from this perspective, though it is related.
The enforcement style is the product of the implemented legal framework. The legal
framework established the responsible enforcing actors, the enforcement action that may take
and codifies their relationship to the regulated actors. Thus, this research does not attempt to
explain the enforcement style beyond its analysis as the product of the transposed legal
framework.
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Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Chapter 6: Methodology
Introduction
The literature review presented above started with an overview of the scholarly field in
relation to ‘implementation’ literature. Consequently, the several prominent explanatory
variables in regard to differences in implementation have discussed. It has shown be unclear
to what extent a certain theory or variable is adequate in explaining transposition delay. The
main explanation in this research that is put forward it the extent to which misfit and directive
characteristics can explain transposition delay. Factors related to member state characteristics
are addresses insofar as they have shown to be relevant in relation to this specific directive.
This research aims to explain the differences in transposition and enforcement type of
article 8 EED throughout the EU. In order to do so, the timeliness and correctness of the
national legal framework that aims to implement article 8 EED as well as the type of
enforcement that has been opted for will be ascertained.
Design
This research uses existing theoretical approaches in order to ascertain the
transposition and enforcement practices as well as assessing and explaining the factors
responsible for variance in transposition and enforcement of article 8 of the EED in different
EU member states. Consequently, this research has been designed to be a comparative case
study.
Case studies can generally be regarded as “an attempt to understand and interpret
spatially and temporally bound events”. (Levy, 2008) However, as theoretical propositions
and their validation have become more important in social sciences, case studies have an
increasingly important role. Rather than interpreting or understanding certain events, case
studies are now seen as a means of explaining certain events or a state of things based on
theoretical propositions and can also be used for validating or creating theoretical
propositions. (Ibid.) Consequently, a case can be seen as: “an instance or a class of events”,
(George & Bennett, 2005) and the case study as “the detailed examination (…) to develop or
test historical explanations that may be generalizable to other events”. (Ibid.)
An inherent problem with this approach to cases and case studies is that is hard to
establish causation due to the great amount of variables possibly influencing outcomes and the
few number of cases under study. (Campbell, Stanley, & Gage, 1963) However, Cambell later
argued that case studies can generate expectation and predictions in relation to certain a
theory. (Campbell, 1979)
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Several authors have created categorizations of types of case studies. These selections
are based on research objectives and case selection techniques. (Levy, 2008) Based on
influential typologies created by (Lijphart, 1971) and Eckstein’s contribution in a book by
(Greenstein & Polsby, 1975), Levy (2008) creates a typology of: idiographic case studies,
hypothesis generating case studies, hypothesis testing case studies and plausibility probes.
These three basic types include several subdivisions. This research is considered to be closest
to the first type of case study: idiographic.
The aim of an idiographic case study is to “describe, explain, interpret, and/or
understand a single case as an end in itself rather than as a vehicle for developing broader
theoretical generalizations”. (Levy, 2008) This type of case study is further subdivided into
inductive case studies and theory-guided case studies. The former can be considered “highly
descriptive” with a lack of a theoretical framework. (Lijphart, 1971) The latter have a similar
purpose to the former in that it the aim is to explain and understand a case, rather than
generalize beyond that case. (Levy, 2008) What distinguishes the theory-guided case study is
that; “they are explicitly structured by a well-developed conceptual framework that focusses
attention on some theoretical specified aspects of reality and neglects others.” (Levy, 2008)
Cases
This research can be considered as possessing two elements: it focusses on both the
transposition and the enforcement of article 8 of the EED across the EU. Possessing elements
of an inductive case study, there is not much known in regards to the transposition and
implementation practice of this directive. An explicit differentiation between the transposition
and enforcement is made as an analysis of the former is requires less of an in-depth look at
sub-national processes, thus it can be better conducted I research of this scope. A broad
geographical selection of member states which aims to cover potential differences in
transposition is made by focusing on: the United Kingdom, The Netherlands, Italy, Germany,
Denmark and Slovakia. The enforcement systems of two nations that show are likely to show
relevant differences in their enforcement types in relation to environmental regulation are
compared. These states are: the United Kingdom and The Netherlands.
Operationalization
The way in which the variables that have been identified are measured is explained in
this section.
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Dependent variables
The dependent variables consist of the difference between the transposed legal
framework between EU member states and the resulting enforcement system. In order to
ascertain the extent to which both the transposition and the enforcement differs, two
frameworks for analysis will be employed. First of all, member states can differ based on
timeliness. The transposition can be on time, late or not have happened at all. Several studies
in relation to differences in transposition use the member states notification to the
Commission of having transposed the directive as a measure for implementation. This is not
an adequate measure as member states may notify of the Commission of having complied
while issues may still exist in terms of the correctness of the legal framework. Consequently,
the actual laws that are indicated by member states to be the transposing measure are analyzed
and the date of entry into force of these measures are used to assess whether transposition is
on time, late or has not yet happened. This research was initiated knowing that there are
differences between the timeliness of transposition. The transposition date for the directive as
a whole has been missed, and article 8 has been one of the most troublesome parts of the
directive. Now that a year has passes since the transposition deadline of 5 June 2014, the state
of implementation of this article can be assessed. An overview of the measures used to
determine the differences in transposition and enforcement is set out below.
Transposition
Timeliness: transposing the directive (almost) on time (less than 6 months delay), significantly
delayed (more than 6 months) or not transposed yet.

Date of entry into force of national legislation of which the member state has indicated
that it implements article 8 EED. Delay is measured in month after transposition
deadline has passed.
Correctness: fulfilling the requirements that constitute correctness fully, largely or not
fulfilling all requirements

The content of national transposition measures
The content of the national law is discussed and it is determined to what extent the substantive
rules of the national legal framework accurately incorporates the requirements of article 8.

(Forms and methods,
o effective judicial protection
o legal certainty
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
o useful effect)
There is a problem with an analysis of the correctness of the transposed legal framework in
terms of ‘forms and methods’. These criteria refer to the continued and full application of the
transposed directive in national law, which implies that a degree of practice has to occur in
order to be able to assess this factor. Moreover, the first two criteria of ‘form and methods’
can only be assessed insofar as the substantive requirements have been transposed by law.
There is no way to assess the degree to which these laws have the same legal value in
practice, in terms of them being applied. Consequently, the elements of correctness that relate
to the form and methods shall not be elaborated upon in the analysis of the transposition. It is
taken a given that the implementing law are binding in national law and have the same legal
force as national provisions not originating from a directive.

Provisions for effective application and enforcement
o agencies prescribed and have a clear and specific task
This measure is based on the whether the national law determines the responsible agencies,
their responsibilities and competencies in relation to the entry audit obligation.
o monitoring and verification embedded in the national legal system
This second element is based on whether the responsible actors have instruments and
guidelines to monitor compliance with the energy audit obligation.
o system of sanctions similar to sanctions for violation that are similar under
national law
As it is unclear to what extent one can assess sanctions for similar violations, the existence of
provisions on enforcement action that can be taken by actor that is responsible for ensuring
compliance shall be taken an adequate means of fulfilling this condition.
o system ensuring judicial protection
The extent to which there are explicit provisions for judicial action in relation to enforcement
action shall be taken as meeting this requirement on the correctness of transposition.
Enforcement system in MS: ‘accommodative’ or ‘formal’
This measure is based on the notion of levels of severity of government intervention.
The more intrusive the level of intervention; the more ‘formal’ the enforcement system will
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
be deemed. The notion of a scale of different degrees of intrusion is based on the idea by
(Ayres & Braithwaite, 1992) of an enforcement pyramid.
This pyramid has been used to describe the level of government intrusion on both the level of
industry as well as on the level of the individual enterprise.
Whether an enforcement system is ‘accommodative’ or ‘formal’ is based on
determining the degree to which one of is indicators is present in each member states’
enforcement system. The indicators are indicative of different levels of government
intervention. A visual approximation (generalization) is presented to provide an indication of
the degree to which an enforcement system is more ‘accommodative’ or ‘formal’. Thus, a
member state moves the scale to either the ‘accommodative’ or the ‘formal’ end of the
spectrum.
While this system can be considered a relatively broad generalization, by including the
most significant indicators on both the industry wide and individual level, the typology can
approach the reality of the enforcement system in a nation vis-a-vis the energy audit
obligation.
The directive allows member states to maintain or implement voluntary agreement
programs that meet certain requirements. The inclusion of such agreements can be concluded
a form of self-regulation, or co-regulation, when there are certain means of control and
verification awarded to government.
‘Regulatory strategy’ of the government: type of intervention at industry and enterprise level

Industry level:
o Role of voluntary agreements in relation to command regulation in enforcing
the obligation

Enterprise level:
o Rigidity of escalation strategy
o Interaction
‘Accommodative’
‘Formal’
Figure 5: overview of elements comprising enforcement style
Regulatory strategy: industry level
The directive require that regulation control behavior of enterprises by codifying a
requirement to conduct energy audit into law and implementing effective, proportionate and
dissuasive penalties. Member states have the option of maintaining or offering a voluntary
agreement, participation in which can result in the exemption of the obligation. This
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Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
exemption may be offered provided that the voluntary scheme includes an energy audit that
fulfills the minimum requirements of an energy audit as stated in ANNEX VI of the EED.
Voluntary agreements are categorized at the bottom of the pyramid that is oftentimes used to
illustrate increasing levels of government intrusion. Following this logic, the relative
importance of voluntary agreement schemes in the legal framework is considered to be
indicative of the preference of the government for an ‘accommodative’ over a ‘formal’
regulatory system with regard to energy audits. In other words, the more important voluntary
agreements are; the more indicative of an ‘accommodative’ enforcement system.
Indicators determining a more ‘formal’ enforcement strategy
Industry level: Role of voluntary agreements in relation to command regulation in enforcing
the obligation:
There are voluntary agreements, which can be acceded to in order to fulfill the requirements
the legal requirements, which exist in conjunction with the command regulation:
++
+
-
--
No
Limited for specific
Accessible to many
Accessible to
enterprise or industry
enterprise across
(virtually) all
sectors
enterprise
Enterprise level: rigidity of escalation strategy
In this research, the enforcement system is determined. This enforcement system is based on
the regulatory strategy at the industry and enterprise level. The enforcement ‘style’ that is
mentioned in the previous chapter is informed by the behavior of street-level bureaucrats.
This ‘style’ is usually based on empirical studies conducted in a country in relation to a
specific enforcement agency.
Broadly speaking, there are three different ‘styles’ of enforcement mentioned in the literature.
The ‘formal’ style is oftentimes associated with exacting retribution. Due to the nature of the
obligation that flows form the directive, this is considered to be an unlikely objective. There
little direct harm done in the case of non-compliance by enterprises, thus, the notion that
exacting retribution can be a goal appears to be too great a generalization. It can be assumed
that the objective of enforcement action is indicting compliance. Inciting compliance is seen
by Hutter (1998) as the goal of the ‘accommodative’ enforcement style.
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The chosen terminology in this research is not meant to imply that a ‘formal’ approach to
enforcement should have as its goal retribution as opposed to inciting compliance. It is simply
a generalization to reflect the degree to which the implemented framework can be considered
intrusive.
This being said, the concepts that Hutter (1989) distinguishes to indicate a style which she
describes as ‘insistent’ will be used to determine the regulatory strategy of the member states.
As mentioned above, in this research the characterization of a type of enforcement is seen as
different from a ‘style’. A ‘style’ is based on the behavior of inspectors. The ‘type’ defined
here as the product of the enforcement procedures that result from the transposition of the
directive. The procedures and tools that individual inspectors and agencies have at their
disposal can vary widely across member states, thus informing the ‘style’ in which the
obligation can be enforced. Consequently, a weakness of this type of analysis is that it
neglects the actual behavior of street-level bureaucrats, this is taken as a given and a potential
subject for further research.
Enforcement is defined as “all dealings between enforcement agencies and firms to ensure
compliance.” (Johnstone & Sarre, 2004) Thus, when categorizing the enforcement type,
essentially an answer is given to the question of: what are these dealing and how can they be
classified? Are these dealings based on rigid procedures, distance, lack of interaction or more
on flexibility, explanation and discussion?
The key indicators are rigidity and interaction. These umbrella terms are used in this research
only, however, the aspects that comprise them are derived from. (Hutter, 1989) These aspects
are based on characteristics that can be derived from legal texts, guidance notes and other
relevant documents.

Rigidity
o Direct relation violation and specific fine: if the law, or guidance document on
implementation or enforcement is explicit about finable offences, it is
indicative of a clearly defined sanctioning protocol. When the type of offences
that may be fines, as well as the corresponding enforcement tools are explicit,
the degree of rigidity of the enforcement system is deemed higher as discretion
of enforcing actors diminishes to an extent.
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++
+
-
--
An overview of
An overview is given
Potential fines are
No mention of fines
offences and
in the law
mentioned without
corresponding fines is
implementing article
an overview or a
mentioned in both the
8
maximum
law and guidance
documents
o Set escalation procedure in case of non-compliance: the procedure is
considered to be increasingly ‘set’ when no explicit mention to discretion at all
stages of intervention is made. The more an enforcement procedure is defines,
the more rigid it will be deemed.
++
+
-
--
Discretion is not
Discretion is
Discretion is
Discretion is
mentioned in
mentioned when
mentioned when
mentioned at all
enforcement
fining an enterprise
warning an
stages
strategies
enterprise
o Time-limit to interactions: if successive enforcement steps are accompanied by
an explicit instruction related to timeliness. In other words, the regulator is
instructed to initiate subsequent proceedings at given times. Such time-limits
lessen the degree of discretion of enforcing agents. A lesser degree of
discretion is commonly associated greater rigidity and consequently with a
more formal enforcement system.
++
+
-
--
Explicit instructions at
explicit instruction at
Explicit at some
not present
all subsequent steps
most stages
stages
o Option to base fine on deterrence: any document mentioned the possibility to
fine beyond the purpose of compliance. When an explicit mention is made that
fines serve a purpose beyond compliance i.e. setting an example thus deterring
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Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
others from violating the obligation, it is seen as indicative of a more formal
enforcement system.
++
+
-
--
It is mentioned both
It is mentioned in one
it is not mentioned
it is not allowed
the law and guidance
source
for enforcers
o Audit reports are substantively checked: the contents of the audit report are
checked for accuracy.
++
+
-
--
All audits will be
Set amount that is
Discretionary
There is no
substantively checked
less than all audit
amount of audits
expectation to
reports will be
substantively
check audit reports
checked
checked
for substance

Interaction
o Personal contact enforcement – verbal: it is instructed that enforcing agents
meet physically or call in the case of non-compliance. The less interaction, the
more in contribute toward being classified as ‘formal’.
++
+
-
--
Personal interaction is
personal interaction is
personal interaction
personal interaction
mentioned as being not
not mentioned in
is mentioned in
is institutionalized in
preferred
enforcement
enforcing guidelines
the enforcement
guidelines, but is
as playing a role in
process
discretionary
enforcement
o Relational distance: central or diffuse allocation of enforcement competencies
++
+
-
-42
Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Distance is great;
Distance is moderate;
Distance is low;
Distance is very low;
national enforcement
enforcement takes
enforcement takes
enforcement takes
agency with no
place at the regional
place at the national
place at the regional
individual inspectors
level with no
level with no
level with individual
inspections
individual
inspectors
inspectors
This categorization presents a well-rounded indication of the way in which member states
have decided to enforce the energy audio obligation and to what extent this enforcement
system can be categorized as ‘accommodative’ or ‘formal’. The enforcement system can be
seen as the product of the discretion and nature of the directive, the legal transposition and
national practices on enforcement and its organization. An attempt is made to explain the
degree to which the enforcement systems of member states in relation this this article have
changed as a result of the implementation of article 8.
Independent Variables
This part of the theoretical framework explains the potential influence of variables at
play that are expected to influence the transposition and enforcement. The operationalization
of these variables is addressed determined as well.
Directive characteristics
As established in the literature, there are two main aspects to the directive which may
influence compliance; the discretion that member states have in relation to transposition, as
well as the ‘quality’ of the directive.

Discretion and quality

Adding more strict requirements than what is called for in the directive
Generally speaking, directives leave discretion as to the forms and methods of implementation
(while adhering to the three mentioned standards). Directive may leave discretion as to the
results to be achieved. The degree to which member states may, and do, go beyond the
minimum requirement of the directive is as possibly contributing to longer transposition time.
This measure is ascertained by analyzing the requirements of article 8.
As mentioned in the chapter 5 on theories, the quality of the directive is based on the
degree to which words in directives are vague, complexity, inconsistent, overuse of jargon,
poor references and dubious political statements. (Xanthaki, 2001) Such measures are
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subjective and hard to operationalize. Because of this, the measure on the quality of the
directive will be based on the extent to which resources have been devoted by the
international information exchange network (CA EED) in ascertaining the meaning or intent
of an aspect of article 8.
Member state and the directive
The explanatory categories that have been labelled ‘member state and the directive’ in
this research pertains to the degree of misfit between the requirements of the directive and the
existing national policies and institutions.
Goodness of fit and adaption pressure
The notions on misfit are relatively straightforward. The argument is as follows: a
basic assumption is made that the degree of additional pressure on domestic institutions and
polices that is exerted as a consequence of EU acts influences the degree of success in terms
of transposition. First, in cases of high additional pressure i.e. misfit, implementation is likely
to be problematic. Second, in cases of no additional pressure, implementation is effective as
the European requirements are fully compatible with national institutions and polices. Lastly,
there can be a moderate adaption pressure when implementation is shaped by the resources
and preferences of domestic actors. (Knill & Lenschow, 1998)
While most authors recognize the existence of two types of misfit; policy and
institutional misfit, this research limits itself to assessing the policy misfit. (Börzel & Risse,
2003) differentiate between the two: “institutional misfit is less direct than policy misfit.
Although it can result in substantial adaptation pressure, its effect is more likely to be longterm and incremental.” Due to this long-term and incremental nature of the adaption pressure
that is exerted, this aspect is not looked into.
(Falkner, 2005) characterizes policy misfit as a situation where: “the contents of an EU
directive are not reflected in the relevant national law”. She established a difference between a
‘gradual difference’ and a ‘matter of principle’. The latter means that a certain standard or
norm that is mentioned in the directive is not present in the member state at all, whereas the
former means that the norm is present, although some aspects are different from what is states
in the directive. (Ibid.) She proceeds: “hence Europeanization can be of a quantitative kind
(strengthening or weakening an existing policy) or a qualitative kind (the creation of
completely new national institutions or structures or the replacement of existing ones). (Ibid.)
Consequently, the degree to which misfit occur is defined as being either ‘high’ or ‘medium
and low’. Falkner (2005) distinguished between ‘legal misfit’ and ‘practical significance’.
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Which taken together determine the degree of policy misfit. If the degree of legal misfit is
high, but there is limited practical significance, than the degree of policy misfit will be
considered medium rather than high.
Falkner (2005) defines legal misfit: “we talk about a high degree of legal misfit if there
are completely new rules, far-reaching gradual changes and/or important qualitative
innovations”. (Ibid.) The practical significance is based on the scope of application; the extent
to which the situation for the regulated actors changes as a result of the transposition of the
directive. (Falkner, 2005) This is important because it may be the case that through
instruments that are not defined in the national legal system, the factual situation that a given
directive may require achieving may have already existed. The only thing that would change
as a result of implementing the directive is that the situation would be codified in the national
legal system.
Member state characteristics
This section refers to the notions related to the ‘worlds of compliance’ theory by Falkner
(2008). This theory states that compliance occurs in the world of domestic politics when the
provision of the directive are compatible with domestic interests as domestic interests prevail.
The defining elements of the worlds of compliance theory in relation to timely transposition
in states in the ‘world of domestic politics’ are:

Domestic interests that align with the directive requirements

Interest group preferences in line with directive

No difficulties in pursuing these interests
Any elements related to the ‘world of law observance’ can be considered a given which do
not need to be elaborated upon seeing as the theory predicts that implementing directives
trumps all domestic obstacles. The ‘world of transposition neglect’ typically expects national
instruments to be superior to those coming from the EU, initiate transposition reactive based
on supranational action (i.e. infringement procedures) and may suffer from administrative
inefficiencies.
Data
The data that is used to ascertain an answer to each sub question is ascertained through
various sources. These sources are: telephone interviews with relevant personnel of ministries
and executive agencies in the member states that are under research, analysis of relevant laws,
45
Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
guidance documents, discussion papers and reports. An overview of which sources were used
to answer which sub question is presented below.
Sub question:
Operationalization and measure
How it was
ascertained
Has the directive been
transposed in a timely
manner?
Amount of months after transposition deadline
to transpose
Does the implemented legal
framework adhere to the
standards of correctness?
The content of the nat. measure matches the
directive, it adheres to the standards related to
form and methods, there are provisions for
effective application and enforcement, no
contradictions in national law.
Interview and
verified with actual
laws implementing
the directive
Interview
substantive rules
enshrined in
applicable national
law
Are there differences in the
transposition of article 8
EED?
How is enforcement of an
energy audit obligation
organized in member states?
Does the enforcement
approach signify a formal or
accommodative approach?
Role of voluntary agreements, rigidity of
escalation strategy and interaction between
regulator and regulatee
Interview and
guidance document
on application and
enforcement
Do the variables related to the
directive play a role in the
extent to which the article has
been transposed?
concepts related to the directive are defined and
unambiguous, the degree of discretion, the
transposition deadline
Do the variables related to
goodness of fit explain the
transposition behavior?
Policy Misfit: High – medium/low (legal misfit,
Limited practical significance)
Reports and
presentations
available through
information
exchange network
database
Analysis of
existing and
previous legislative
environment; laws.
Do the variables related to the
'member state level' play a role
in the extent to which the
article has been transposed?
World of domestic politics: Assessment of
government interests and Interest group
preferences
How can differences in
transposition and
enforcement be explained?
Government
energy strategy
report and interest
group reports
Table 1: operationalization for research question and data collection method
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Limitations
The extent to which this study can be considered meaningful in the insights it produces is
based on the construct, validity, internal validity, external validity and reliability of the
results. An overview of these concepts as they relate to this research is discussed below.
Construct validity
(Yin, 2013) describes construct validity as the extent to which the correct operational
measures related to the concepts that are being studied are identified. The result of this study
is limited to the transposition of the obligation in a representative group of member states
whereas the overview on enforcement pertains to two member states. Seeing as there is no
practice in relation to compliance of the regulated, this aspect is not included as a factor. The
information provided through interviews are not taken at face value and are verified by
simultaneously looking at the transposing laws in the member states. Because the legal
situation in the member state is assessed in relation to the timeliness and correctness of
implementation, the potential pitfall associated with using the notification of the member state
to the Commission is avoided. Such notifications to the commission are based on an
assessment of the member state in relation to compliance with transposing the directive and
there may be incentives for the member state to not be forthcoming as to the reality of the
situation. However, in relation to enforcement it is clear that it does not pertain to practices,
but to guidelines. The style of enforcement may diverge as a result of this meaning that the
classification mad in this research does not hold in practice.
Internal validity
A degree of presumption is associated with the relationships that are established in this
research between the dependent and independent variables. (Yin, 2013) describes the concept
of internal validity as certain conditions existing that are believed to lead to other conditions
as they are different from those that do not. Although there is a comparison between various
member states and the explanatory variables that are researched are grounded in theory, it
cannot be unequivocally said that it is the selected variables that lead to a certain condition or
state.
External validity
External validity is related to the sphere in which the findings of the study can be generalized.
(Yin, 2013) As the research design is based on the application of an article of a directive
which should create substantive rules in relation to energy audits for enterprises, it is clear
47
Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
that there are serious limits as to the generalizability of the findings. The findings in this study
cannot be considered generalizable for compliance patterns in relation to the country under
study, directives in general or in relation to energy/environment. While case selection aims to
include a diverse group of states, reducing the bias in terms of selection to a certain extent, it
is not random. However, it is not the purpose of this research to generalize in this sense.
Reliability
In regards to the reliability, conceptualized as the repeatability of the results using the same
operations and data, (Yin, 2013) is the final aspect to this section. The interview questions are
posed and structured in a way that allows for the interview to be repeated garnering similar
results. Other sources, based on laws and guidance documents can be analyzed while looking
at the same operationalized variables and result in the same conclusion as drawn in this
research.
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Overview of variables and framework for analysis
Dependent variables:
transposition and enforcement
-transposition:
Timeliness: on time, late, not at
all
Correctness:

Content of national
transposition measures,

Independent variables: factors
explaining differences in
transposition
Article (Directive) characteristics


Discretion and quality
Further requirements
Member state and the directive:

Provisions for effective
Policy Misfit
o High –
medium/low
legal misfit
application
o Limited practical
significance: yes
- no
-enforcement:
‘accommodative’ or ‘formal’
enforcement system (selected
MS overview)


Industry level: Role of
voluntary agreements
Enterprise level: Rigidity
and Interaction
Member state characteristics:

World of domestic
politics:
o
Government
interests
o
Interest group
preferences
Figure 6: overview of variables and relations
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Chapter 7: Transposition
This chapter assesses the timeliness and correctness of transposition of article 8 EED in six
member states. It starts with an overview of timeliness in these six member states.
Consequently, the substantive requirements that the national law produces are elaborated
upon and summarized. Lastly, the correctness based on the established characteristics is
assessed on a case by case basis before concluding the chapter.
Timeliness
Table 2 below provides an overview of the time it took for national measures that implement
article 8 EED to be adopted. These dates are self-proclaimed by member states as the date by
which they had implemented article 8 fully. In terms of the correctness of transposition, that
overview is presented in the following paragraph.
National law(s)
The United Kingdom:
2014 No. 1643: The Energy Savings
Opportunity Scheme Regulations 2014
The Netherlands:
Ministerial Decree Ministry of
Infrastructure and Environment nr.
IENM/BSK-2015/103340
Italy:
Decreto Legislativo 4 luglio 2014, n.
102
Direzione generale per il clima e
l'energia
Germany
Law on Energy Services and Other
Energy Efficiency Measures of 4
November 2010 (modification)
Denmark
Act No. 345
The legislation (Order No. 846)
Slovakia:
Act No. 321/2014 Coll. on Energy
Efficiency
Secondary legislation related to
conditions for audit
Entry into force into national legal
system
Delay (from 5th June
2014)
17th July 2014
0.6 months
16th of July 2015
16.5 months
4th of July 2014
1 month
12th of March 2015
9.4 months
22nd April 2015
10.7 months
8th April
1st July 2014
0.9 months
1st December 2014
6 months
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Table 2: overview of timeliness of transposition per member state in months of delay
It is apparent that every member state under investigation has transposed article 8 late, some
more so than others. Not one of the countries under investigation have transposed the article
on time. In Slovakia the conditions that apply to energy auditor have not yet come into force,
thus transposition may be considered incomplete to an extent. However, this the obligation
itself is in force.
Correctness
This section addresses the content of the national transposition measures and whether
the implementing law follows the directive verbatim or whether it is translated, it asses to
which extent the proper form and methods are adhered to, the provisions for effective
application are determined and the extent to which there are no contradicting national law
applicable. This assessment is done on for each of the countries under investigation
individually.
The United Kingdom
Content of national transposition measures
The UK government has implemented the energy audit obligation through a piece of
legislation called the Energy Saving Opportunity Scheme (ESOS) that is given effect through
the 2014 No. 1643: The Energy Savings Opportunity Scheme Regulations 2014.
The scheme applies to large undertakings and groups containing large undertakings in the UK
based on a national definition;10
1. a corporate body or partnership
2. an unincorporated association carrying on a trade or business, with or without a view
to profit
An undertaking is considered ‘large’ when it employs more than 250 people and/or when
it has an annual turnover in excess of 50 million euro and an annual balance sheet in excess of
43 million euro. An exemption to the energy audit obligation is offered for those enterprises
that implement a certified energy management system. When an energy management system
does not cover the 90 percent of energy use that is mandated11 an additional assessment within
the context of the scheme needs to be conducted in order to be in compliance. In addition to
10
Defined in Companies Act 2006
Save for several exceptions: unconsumed energy that your organization doesn’t use, and supplies to a third
party, energy consumed outside the UK, energy consumed for international travel or shipping where the
journey doesn’t start or end in the UK.
11
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
an ISO 50001 certification, two other exceptions that are specific to the UKs national law are
available.12 An audit must be conducted and report submitted on the 5th of December 2015
and every 4 years thereafter.
An online notification system has been set up to order for enterprises to report on their
compliance. These results are published online13 and an enterprise may be ‘selected’ to have
compliance with the scheme checked by the Environmental Agency that oversees the scheme.
In the UK there is no option to accede to government overseen voluntary agreements
that enterprises program, nor are there any legal requirements for the post audit process.The
requirements for energy auditors and the requirements of energy audits themselves go far
beyond the minimum which is required by the directive.
There is a requirement to appoint a ‘lead assessor’ to check whether energy audits
meet the applicable requirements. The lead assessor may be and employee ort a third party.
Qualified professionals are registered by the Environment Agency, which has developed an
approval process. These lead assessors must be a member of a professional body such as the
association of energy engineers.
There are several competency requirements that auditors have to fulfill. First, they
need two years of professional experience in energy assessment/auditing. They need to have
been involved in at least two energy audits previously. Lastly, they have to attend a training
course. A comprehensive guideline on the requirements and procedures of the ESOS are
published by the Environment Agency. A helpdesk is available for questions.
Provisions for effective application
Enforcement of the energy audit obligation is a relatively centralized matter in the UK.
Established in 1996, the Environment Agency is responsible for the protection of the
environment in England. Separate bodies enforce the obligation in Northern Ireland, Scotland
and Wales. The law that mandates an energy audit is called the Energy Savings Opportunity
Scheme (ESOS). Rules under ESOS require two actions after a compliant audit has occurred.
First, the scheme administrator i.e. the Environment Agency must be notified of compliance.
A website has been created in order to facilitate the notification procedure. Enterprises
fill out an online form consisting of 56 questions. These questions pertain to the enterprises’
information,14 corporate structure15 and an indexation of the type of audit or energy
management system that was performed/implemented. Enterprises that submit ESOS
12
Display Energy Certificates, Green Deal Assessment.
Save from personally or commercially sensitive information
14
Name of the organization, UK registration, addresses etc.
15
Grouped enterprises, overseas subsidiaries etc.
13
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
notification will be published (excluding sensitive information) on the ESOS website.
Second, it is required to maintain an ESOS ‘evidence pack’ which includes the
information uncovered after the audit i.e. the energy consumption profile, detailed energy
saving opportunities, audit methodology etc. Clear guidelines on compliance and enforcement
exist. Every action, ‘from failure to notify’ to ‘failure to undertake audit’ has a set penalty.
As no similar obligations existed beforehand, it is hard to establish the degree to which
the sanctions that apply are comparable to similar violations. However, it is clear that
violations in for environmental legislation can result in financial penalties. This is similar in
the case of failing to comply with the energy audit obligation. Consequently, it can be said
that this condition is fulfilled in the UK.
The legislation in the UK explicitly mentions options and procedures for appeal when
enforcement action was ‘based on an error of facts, wrong in law or unreasonable’. (ESOS)
Such an appeal can be made with a first-tier tribunal.
The Netherlands
Content of national transposition measures
Non-SMEs as defined in 2003/361/EC; any entity engaged in economic activity which
employs more than 250 persons has an annual turnover exceeding EUR 50 million, and/or an
annual balance sheet exceeding EUR 43 million. An exemption to the energy audit
requirement is offered to those enterprises that implement an energy or environmental
management system based on ISO 50001 and ISO 14001 respectively, provided that an
energy audit is conducted within the context of these systems.
They are based on the minimum criteria as set out by the directive. Consequently, a
report of the audit must be submitted to the ‘environmental authority’16. An audit must be
conducted and report submitted on the 5th of December 2015 and every 4 years thereafter.
There are no specific requirements that an energy auditor should possess before being
able to conduct an audits, as long as the minimum standards of the audit itself are adhered to.
Nor does this apply to a certifying body. Information on the requirements has been
disseminated trough an information document that is circulated by the employers’
organization in conjunction with government agencies.
Provisions for effective application
In the Netherlands, there are around 3000 enterprises that fall within the scope of the
definition of not SME. Around 1100 of those enterprises participate in a voluntary agreement
16
Dutch: ‘Bevoegd Gezag wet milieubeheer’
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
(Dutch Ministry of Infrastructure and Environment, 2015b). As the directive allows for
member states to use voluntary agreements that are administrated by independent authorities
to be used as an alternative path to compliance, a large part of Dutch enterprises already
adhere to the requirements that art. 8 EED would impose. This means that the impact of the
transposition for a little over a third of all large enterprises in the Netherlands is negligible to
non-existent. However, the remaining 1900 will be covered by new legislation.
The energy audit obligation can be seen as an addition to this existing system. There
are three actors involved in the process of enforcement; the competent authority, the
environmental agency and the municipality.17 There are 29 environmental authorities that
cover the working area of around 393 municipalities in relation to environmental permits, and
by extension, energy audits.
This process is clear in regards to the voluntary agreements which grant an exemption
to the obligation. In regards to the enterprises that do not participate, the monitoring and
verification is done though the environmental services of to which municipalities have
delegated many duties in relation to environmental protection. This structure leaves some
discretion in terms of verification to these services.
No system specific to violations in relation to article 8 EED has been created, contrary
to in the UK. The existing provisions as they exist in the context of the environmental permit
govern the application of sanctions. There are provisions for legal procedures in a case when
enterprises do not agree with the enforcement action. This is governed by the provisions
related to all government enforcement action (Algemene wet bestuursrecht) As a means of
last resort, a fine can be imposed to ensure that the enterprise complies. The environmental
authority has a high level of discretion in this context and no amount or ‘finable offences’ are
set.
Italy
Content of national transposition measures
Non-SME enterprises as defined in 2003/361/EC and companies with high energy
intensity are obliged to conduct energy audits.18 An exemption to the energy audit
requirement is offered to those enterprises that implement an energy or environmental
management system based on ISO 50001 and ISO 14001 respectively, provided that an
energy audit is conducted within the context of these systems.
17
Possibly the Province
Energy consumption must exceed 2.4 Gigiwatts per year and the total cost of energy for that enterprise in
relation to its turnover must exceed 3 percent.
18
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
The criteria for energy audits do no go beyond what is required by the directive.
However, an audit will be considered as fulfilling the obligation when it covers 50 percent of
energy use in enterprises that span multiple sites. Audit reports must be submitted to the
Energy Agency in Italy (ENEA), which will administer a database containing all reports.
Samples of the submitted reports will be verified.19 An audit must be conducted and report
submitted on the 5th of December 2015 and every 4 years thereafter. There are no government
overseen voluntary agreements that enterprises can accede to, nor are there legal requirements
for the post audit process.
As mentioned above, there is a requirement placed on energy intensive enterprises as
well. This requirement goes beyond what is required by the directive which only pertains to
the size of the enterprise.
Provisions for effective application
Energy audits must be conducted by experts who are certified by accredited bodies
that adhere to relevant EU legislation. Audits may also be conducted by energy service
companies. Information has been provided through web pages and the energy agency. A fine
of up to EUR 75.000 can be imposed by the authority administering the scheme: ENEA.
Germany
Content of national transposition measures
Article 8 EED is transposed in the ‘energy service law’.20 The EDL-G has existed
since 2010, however, it has been revised to include the requirements imposed by article 8 of
the EED as of 22nd of April 2015. The requirement sin terms of obliged parties or the
deadline do not diverge from what is defined in the directive and the commission guidance
note. Obliged parties were informed of their responsibility under the adjusted law via a press
announcement.
There is no audit obligation for businesses, when they provide an energy management
system according to DIN ISO 50001 or an environmental management system (EMAS)
according to regulation EG 1221/2009. The energy audit has to fulfill the DIN 162471 plus the requirements which are set out in the appendix VI of the EED. There are no
voluntary agreements that enterprises can accede to.
The former EDL-G had no obligations or arrangements regarding mandatory or
incentivized energy audits. There was only one regulatory that settled that the “Federal
19
20
3 percent of all audits annually and all audits that were conducted by internal auditors.
EDL-G
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Energy Efficiency Center” supports energy enterprises to make sure that there are enough
high-quality audits for all end-costumers available.
The audit requirements go beyond what is stated in ANNEX VI of the directive by
including that they have to fulfill DIN 16247-1. Second, is the requirement that auditors
possess certain qualifications and a database registers all auditors that are eligible to conduct
audits based on their qualifications.
The auditors do not have be certified, they only have to fulfill the requirements on
their qualifications set out by the EDL-G. They can be internal and external, but must register
the Federal Office of Economic Affairs and Export Control.21
Provisions for effective application
It is mentioned in the implementing law that that if an energy audit does not occur,
does not occur correctly and in full or occurs too late, the enterprise can be subject to a
possible fine of up to EUR 50.000. The implementation of the audit is monitored by the
Federal Office for Economic Affairs an Export Control in samples of 20 % in every four year
period.
Denmark
Content of national transposition measures
The legislation (Order No. 846) which implements article 8 EED is final and has been
adopted into law. The basic obligation is primary law which has been supplemented with
several secondary acts that are intended to further substantiate specific requirement, for
instance in the case of provisions for the shipping, transport and construction sector. The
deadline is also set on the 5th of December. An enterprise that only after December 5th 2015
falls within this definition of a large enterprise is to carry out an energy audit within two years
after it is defined as being a large enterprise. The requirements on audits themselves are
pursuant those set out in the Directive. The execution of an energy audit can be distributed
over a four year period.
‘Large’ enterprises (in the sense of them being a ‘non-SME’): an enterprise that,
globally, has at least 250 full-time employees and an annual turnover of at least 50 million
euros or an annual balance of at least 43 million euros calculated according to annual financial
statements. The definition also applies to public enterprises that operate on market terms.
Enterprises with an energy consumption of less than 100,000 kWh/year are exempted from
21
In order to do so, potential auditor must possess a higher education degree or another technician degree
certified by the state. Three years of experience in a relevant energy management advising capacity are
required as well.
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Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
the obligation to carry out energy audits.
Those enterprises that have implemented a certified energy management system or
environmental management system (insofar as this systems includes an energy review similar
to in that contained in an EnMS) that pursuant the relevant European or international
standards are exempted from the obligation as well.
There is no legal obligation to implement any recommendation resulting from the
energy audit, nor is there an obligation to implement certain energy efficiency improving
measures in general.
Provisions for effective application
Compliance is established through self-reporting by the relevant enterprises of their energy
audit or the certification of the energy or environmental management system. These reports
should adhere to specific requirements set out in the relevant legislation. This is monitored
through a database covering a large part of the relevant enterprises has been set up with the
assistance of a third party from the private sector.
The Danish Energy Agency is the recipient of the abovementioned reports and
manages the database as well. A list of enterprises that have conducted an energy audit or
have certified an energy management system shall be published.
It is possible that non-compliant behavior of the enterprise is addressed. The first step
in the process is for the DEA to issue an order to the enterprise requiring them to comply with
their obligation. Should this not have the desired effect, more stringent actions are possible. A
fine can be imposed. The DEA monitors compliance, however it does not issue the fine,
should this be required. Fines are imposed by a judge, not by the agency.
The process starts with assessing compliance based on the relevant deadlines
set in the legislation. A list of compliant enterprises shall be published. Non-compliant
enterprises can be reprimanded and requested to fulfill their legal obligations. Sanctions can
be issued by a court in the case of non-compliance. These sanctions are based on the size of
the enterprise and the intricacy of the audit that should be conducted. For example; twice the
cost of an energy audit can be considered appropriate to have a deterrent effect.
Slovakia
Content of national transposition measures
Article 8 EED is transposed, for the most part, by Act No. 321/2014 Coll. on Energy
Efficiency. Al non-SMEs according to the EU definition are obliged parties. Relevant
enterprises are compliant when they conduct an energy audit that adheres to the minimum
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Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
requirement by December 5th 2015 and every subsequent 4 years. SMEs are subject to the
same auditing requirements when they have been supported by public funds. Exemptions are
offered only when a certified energy or environmental management system that includes an
energy audit is implemented. There is no voluntary agreement scheme. There are no
requirements to implement the recommendations resulting from an energy audit.
Both internal and external auditors are allowed to conduct energy audits, provided
they are registered at the Ministry of Economy. Successful registration depends on passing an
exam, possessing a relevant educational background and need to possess previous experience
in energy consulting.
Provisions for effective application
Large enterprises shall send the summary information sheet from the energy audit to
the SIEA and a copy to STI. Energy efficiency monitoring system including energy audit
reports and summary information sheets is operated by the SIEA.
Compliance is monitored through the comparison of received summary information
sheets from energy audits/energy audit reports with abovementioned database of large
enterprises. Sanctioning possibilities are fines. These fines can range from 5000 to 30000 euro
for large enterprise not performing the audit. Other transgression such s not keeping a written
report of the audit can result in a fine of EUR 500 to EUR 5000. The trade inspection and the
energy agency cooperate in these actions, but only the trade inspection may issue a fine.
Overview of transposition of substantive national legislation
United Kingdom
Yes
Yes
Netherlands
Yes
Yes
Italy
Yes
Yes
Germany
Yes
Yes
Denmark
Yes
Yes
Slovakia
Yes
Yes
No
Yes
Yes
Yes
Yes; diffuse
No
Yes
Yes
Yes*
Yes
/
/
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
VA
Deadline; 5 December
Other req.
Yes
No
Yes
Yes
Yes; central
database
No
Yes
Auditor
Amount of energy use
90%
/
Transposition
Obliged Parties: 2003/361/EC
Exemptions:
-ISO 50001
-ISO 50001 & Audit
-ISO 14001 & Audit
Min. req. directive
Reporting
Yes; extensive
Yes
Mandatory
implementation
Yes
Yes
No
Yes
No
Yes
/
50%
No
Yes
Yes**
Yes
90%
90% /
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Accreditation auditor
Certification body
Info
Non-compliance
Yes; Strict
Yes
Yes
Clear penalties
No
No
Mostly
Possible
penalties
Yes; Strict
Yes
Yes
Clear
penalties
Yes
Yes
Yes
Yes
Clear penalties pt. pen.
Yes
Yes
Yes
clear
penalties
Implementation sup.
No
List
/
/
/
/
*including energy intensive companies
**Pertaining to SME using public funds
Table 3: substantive rules energy audits and auditor obligations
In the cases that are being studied, the transposition appears to be ‘correct’ in terms of
satisfying the conditions associated with this concept. However, it is clear that the
requirements both on the audits and audits diverge according to member states. Moreover,
there is a degree of ambiguity in relation to what enterprises are obliged to conduct energy
audits under the national legal frameworks.
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Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Chapter 8: Enforcement system
Introduction
There are several characteristics that place an enforcement type in one category or the other.
These categories are generalizations of opposites placed on a continuum. The analysis does
not include enforcement practice by inspectors. It is based on the legal framework and
enforcement guidelines that inspectors are supposed to adhere to. It follows that the different
can be more nuanced based on the actual behavior of these ‘street-level’ bureaucrats.
However, the legal framework and guides to enforcement behavior are sufficiency detailed as
to allow for a categorization in terms of ‘formal’ and ‘cooperative’.
United Kingdom
Indicators enforcement system: Industry level
Role of voluntary agreements
There is one voluntary agreement scheme in the UK; Climate Change Agreements (CCA).
These agreements The CCA are accessible to energy intensive industry and require participant
to measure and report on energy use and carbon emission. In return, participant will be
awarded a significant discount22 on an energy and carbon tax that would otherwise be
applicable to them. (Enviroment Agency, 2015) However, this scheme does not constitute an
exemption to the obligation imposed by the ESOS. Information on energy use that is the result
of participation in this scheme may be used in relation to ESOS, however, no formal
exemption is granted in terms of voluntary agreements and energy audit. (Environment
Agency, 2015a)
++
+
-
--
No
Limited for specific
Accessible to many
Accessible to
enterprise or industry
enterprise across
(virtually) all
sectors
enterprise
Indicators enforcement system: Enterprise level
Rigidity
Direct relation violation and specific fine
Three types of sanctions can be imposed in system that has been implemented in the UK for
six different ‘offences’ that can be made by enterprises. These penalties are chapter two of the
implementing law (Parliament, 2014). Consequently, the guidance documents reserve a
22
90 percent on energy tax and 66 percent on carbon tax
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section laying down the offences and corresponding fines. These cases of non-compliance are:
failure to notify, failure to maintain records, failure to undertake an energy audit, failure to
comply with a compliance notice, and enforcement notice, or a penalty notice and false and
misleading statements (Environment Agency, 2015a). The types of penalties that can be
imposed are a fixed penalty, a daily penalty and a publication penalty.
Type of non-compliance
Fixed penalty
(up to)
Daily penalty
(up to), (max.
80 days)
Publication
penalty'
Specification
to Undertake
further steps
Failure to notify
£5,000.00
£500.00
Yes
/
Failure to maintain
records
£5,000.00
Yes
Yes;
specification
to remedy
Yes
Yes;
specification
to remedy
Failure to Undertake an
energy audit
£50,000.00
No; cost to the
compliance
body for
confirming
compliance
£500.00
Failure to comply with a
compliance/enforcement
or penalty notice
£5,000.00
£500.00
Yes
/
£50,000.00
No
Yes
/
False or misleading
statement
Table 4: fines corresponding to different offences in the UK
Employing each of the three instruments is at the discretion of the Environment Agency.
Decision to employ penalties to punish or deter over compliance and enforcement notices to
bring enterprises into compliance is dependent on what is calls ‘public interest factors’. Key
concepts that the person in charge of ESOS compliance makes is the intent of the offender,
the effect on the environment, the deterrent effect and the previous history. The intent to
escalate enforcement responses based on the failure of previous responses is a key tenant in
this regard. Thus, should the compliance and enforcement notice be issues without avail, the
penalty notice is a clear follow-up.
++
+
-
--
An overview of
An overview is given
Potential fines are
No mention of fines
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offences and
in the law
mentioned without
corresponding fines is
implementing article
an overview or a
mentioned in both the
8
maximum
law and guidance
documents
In sum, the specificity of unlawful behavior and the explicitly stated fines result in a situation
that can be said to contribute to a greater degree of rigidity.
Set escalation procedure in case of non-compliance
The enforcement process that may lead to any of the sanctions in the scheme above starts with
a compliance notice. This type of notice is used by the Environment Agency to ask for
information which it needs in order to determine if the enterprise is complying with the
obligations. If the enterprise does not comply, than the environment agency sends an
enforcement notice. This enforcement notice stipulated what the enterprise must do in order to
be in compliance with the obligation. Lastly, a penalty notice will result in the imposition of
civil penalties for non-compliance with the legislation. Discretion of the regulator applies
when imposing a civil penalty. (Environment Agency, 2015a)
++
+
-
--
Discretion is not
Discretion is
Discretion is
Discretion is
mentioned in
mentioned when
mentioned when
mentioned at all
enforcement
fining an enterprise
warning an
stages
strategies
enterprise
Time-limit to interactions
Time limits apply insofar as the deadline before enterprises must notify that they are in
compliance is set. Subsequent procedures, such ate the reaction time that an enterprise has
when dealing with a notification or compliance notice are not defined by clearly defined by
time limits.
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++
+
-
--
Explicit instructions at
explicit instruction at
Explicit at some
not present
all subsequent steps
most stages
stages
Option to base fine on deterrence
The Environment Agency indexes four desired outcomes of enforcement actions: stopping the
offence, restoring harm or damages, bring illegal activity into compliance with the law and
punish/deter. Each of these objectives of enforcement action has several instruments designed
to achieve it.
The first two instruments aimed at enforcing the energy audit obligation; the compliance and
enforcement notice, are designed to achieve the third objective that is mentioned above; to
bring illegal activity into compliance with the law. The fixed and variable penalties are seen
as deterring or punishing the enterprises that does not comply.
++
+
-
--
It is mentioned both
It is mentioned in one
it is not mentioned
it is not allowed
the law and guidance
source
for enforcers
Audit reports are substantively checked
Keeping the ‘Evidence Packs’ mentioned in the paragraph on general organization in this
chapter deals with the substantive checks on audits. These evidence packs must be kept for
three ‘compliance periods’. In other words, the evidence pack must be saved for 12 years,
seeing as a new audit must be conducted every four years. During this period, the
Environment Agency may request an enterprise to provide them with the evidence pack in
order to confirm whether or not the organization has complied.
++
+
-
--
All audits will be
Set amount that is
Discretionary
There is no
substantively checked
less than all audit
amount of audits
expectation to
reports will be
substantively
check audit reports
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Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
checked
checked
for substance
Interaction
Personal contact enforcement – verbal
In its enforcement guidelines, the Environment Agency mentions the possibility of on-site
visits in some cases of violation.23 However, in relation to ESOS, such visits are not codified
in terms of conduct of employees overseeing the scheme.
++
+
-
--
Personal interaction is
personal interaction is
personal interaction
personal interaction
mentioned as being not
not mentioned in
is mentioned in
is institutionalized in
preferred
enforcement
enforcing guidelines
the enforcement
guidelines, but is
as playing a role in
process
discretionary
enforcement
Relational distance
Returning to the way in which the Environment Agency is set-up and how compliance with
the energy audit obligation is checked; the enforcement is centralized through the
Environment Agency. There are no inspectors allocated to check at the enterprise level for
compliance. The internet repository through which compliance is checked and the centralized
nature of the Environment Agency leads to the conclusion that distance is great.
++
+
-
--
Distance is great;
Distance is moderate;
Distance is low;
Distance is very low;
national enforcement
enforcement takes
enforcement takes
enforcement takes
agency with no
place at the regional
place at the national
place at the regional
individual inspectors
level with no
level with no
level with individual
inspections
individual
inspectors
inspectors
23
Chapter 3.2 ‘warnings’ (Environment Agency, 2014)
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The Netherlands
Indicators enforcement system: Industry level
Role of voluntary agreements
There are two main voluntary agreement schemes currently in operation; the long-term
agreement 3 (LTA-3) and the long term agreement on energy efficiency (LTAEE). These two
schemes differ based on the types of enterprises participating. While they are both accessible
to all businesses that are final consumers of energy, the latter is aimed at enterprises that are
wholly or partly covered by the emissions trading system (ETS). Participation in these
agreements can be considered widespread with 1100 participating enterprises that account for
80 percent of industrial energy use as well as 25 percent of energy use in the Netherlands
(Ministerial Decree Addition).
These agreements are concluded between relevant minsters and enterprises and adherence to
its provisions is independently monitored by the Netherlands Enterprise Agency.
In relation to the substance of these agreements, enterprises agree to submit an energy
efficiency plan and submit yearly reports as to the progress toward achieving the goals set out
in the energy efficiency plan. Further agreements have been made with, for instance, industry
to implement energy management systems based on international standards (ISO 50001).
As such, article 8 is partly implemented through the means of voluntary agreements. As these
agreements are not universal, further legislation is needed to implement the energy audit
obligation fully. This is done through a ministerial decree of the ministry of Infrastructure and
Environment. (Dutch Ministry of Infrastructure and Environment, 2015b)
++
+
-
--
No
Limited for specific
Accessible to many
Accessible to
enterprise or industry
enterprise across
(virtually) all
sectors
enterprise
Indicators enforcement system: Enterprise level
Rigidity
Direct relation violation and specific fine
The energy audit obligation is implemented through a ministerial decree. Paragraph 7 of the
addition to the legal text determines that ‘monitoring compliance is the responsibility of the
competent authority based on the environmental decree’. (Dutch Ministry of Infrastructure
and Environment, 2015b) This means that the authority usually falls to the provinces. (Dutch
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Ministry of Infrastructure and Environment, 1993) Provinces have generally delegated the
responsibility of managing and enforcing responsibilities under this law to so-called
‘environmental services’. The exact potential fines and under what circumstances they can be
imposed are codified in the law. The mention that is made in regards to possible enforcement
action: “the competent authority is authorized to use –as a last resort- sanctions’ (DCMR,
2015).
++
+
-
--
An overview of
An overview is given
Potential fines are
No mention of fines
offences and
in the law
mentioned without
corresponding fines is
implementing article
an overview or a
mentioned in both the
8
maximum
law and guidance
documents
Set escalation procedure in case of non-compliance
A document informing competent authorities of the desired engagement with enterprises
states that “it can be expected that the competent authority engages the undertaking in
discussion when it appears to be difficult for the undertaking to comply with the obligation”.
(Netherlands Enterprise Agency, 2015) However, beyond this presumption, there is a national
enforcement strategy that enforcing agents have to abide by in relation to the environment.
++
+
-
--
Discretion is not
Discretion is
Discretion is
Discretion is
mentioned in
mentioned when
mentioned when
mentioned at all
enforcement
fining an enterprise
warning an
stages
strategies
enterprise
Time-limit to interactions
There are no set time limits with regard to the interaction between the competent authority
and the non-compliant enterprise that have been specifically established in relation to the
energy audit obligation, save for a requirement of the enterprise to submit an audit report
within four weeks of it having been conducted. (DCMR, 2015)
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++
+
-
--
Explicit instructions at
explicit instruction at
Explicit at some
not present
all subsequent steps
most stages
stages
Option to base fine on deterrence
The inspectors of these environmental services are expected to act according to a national
strategy. (Combined public authorities relating to enviroment, 2014) This strategy describes
the process of monitoring, sanctioning and when not to sanction as to ensure an adequate and
uniform application of environmental rules. When assessing the appropriate enforcement.
++
+
-
--
It is mentioned both
It is mentioned in one
it is not mentioned
it is not allowed
the law and guidance
source
for enforcers
Audit reports are substantively checked
Audits can be checked for accuracy and to what extent they adhere to the minimum
requirements. Audits are checked by the competent authority and sent to the Netherlands
Enterprise Agency before the 1st of February after the audit in December. (Netherlands
Enterprise Agency, 2015)
++
+
-
--
All audits will be
Set amount that is
Discretionary
There is no
substantively checked
less than all audit
amount of audits
expectation to
reports will be
substantively
check audit reports
checked
checked
for substance
Interaction
Personal contact enforcement – verbal
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The escalation of sanctions for environmental offences is clear in terms of which steps should
follow which. After addressing and warning the offender, a conversation should be initiated.
Only after these forms of contact have been initiated should the option of a fine be considered.
++
+
-
--
Personal interaction is
personal interaction is
personal interaction
personal interaction
mentioned as being not
not mentioned in
is mentioned in
is institutionalized in
preferred
enforcement
enforcing guidelines
the enforcement
guidelines, but is
as playing a role in
process
discretionary
enforcement
Relational distance
Seeing as the obligation is enforced by the environmental service, the distance between the
regulated and the enterprise is comparatively low.
++
+
-
--
Distance is great;
Distance is moderate;
Distance is low;
Distance is very low;
national enforcement
enforcement takes
enforcement takes
enforcement takes
agency with no
place at the regional
place at the national
place at the regional
individual inspectors
level with no
level with no
level with individual
inspections
individual
inspectors
inspectors
Overview
Enforcement system
being 'formal' based on
the regulatory strategy of
government
UK
NL
++
--
Industry level:
Role of
voluntary
agreements
Enterprise level:
Rigidity:
Direct
++
relation
violation and
fine
-
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Interaction:
Set
escalation
procedure
Time-limit
Deterrent
fines
Check audit
reports
Personal
contact
Distance
+
+
+
+
-
-
+
--
++
-
Table 5: overview of scores enforcement system in the UK and the Netherlands
The UK scores high on most indicators of a formal enforcement system. This is not in line
with the predominantly persuasive enforcement style that is usually attributed to the
enforcement practice in the UK. It appear as though that while the enforcement system i.e. the
organization of enforcement is framed in a relatively stringent way, however, the actual
application, in many cases, does not represent this same degree of stringency. Conversely, the
Netherlands, has relatively less well defined ‘formal’ characteristics, while the practical
enforcement in the country is more often than not regarded as being more ‘insistent’ than in
the UK.
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Chapter 9: Factors explaining differences
The explanatory factors that put forwards by the literature as potentially contributing
to transposition delays are discussed below. The first of the variables related to the
characteristics of the directive itself. Consequently, it is discussed in general terms as all
countries deal with the same issue insofar as they relate to the directive. Consequently, the
misfit between existing national institutions and policies is assessed on a country by country
basis. Lastly, the member state characteristics are assed on a country by country basis as well.
As indicated in the overview of variables in chapter 4 on methodology, a complex relationship
exists between transposition delays and enforcement type. The enforcement type is the
product of the transposed legal framework. However, it is argued that, based on the literature,
it is only the member state characteristics that can be used to explain the enforcement type.
Article (Directive) characteristics
The characteristics of the directive can influence transposition of the directive. When
the directive allows for discretion for member states to add requirements and provisions, it has
been theorized that this will result in missed transposition deadlines and slower overall
transposition. The extent to which member states have done so may be an important
determining factor in this regards. The additional requirements that member states may add to
audits and auditors re discussed below. Another aspect related to the directive itself is the
ambiguity of concepts and requirements and the discretion. As it appears to be less clear as to
what aspects of an enterprises energy use must be subject to audits, which enterprises are
obliged or exempt, or what general concepts should entail, it can be said that transposition has
been more cumbersome as a result.
Clarity of obligations and concepts
There has been some degree of confusion in relation to the requirements and concepts
related to article 8. First of all, is relatively ambiguous who the obliged actors are. The
definition of what constitutes and non-SME and an enterprises’ relationship between ‘linked’
enterprises has been interpreted in different ways. Second, how much of an actors energy use
should be audited is not specified. This adds a degree of ambiguity in this regard. Moreover,
what aspect of enterprises activities should be subject to audits is also unclear. The extent to
which transposition should be included is not specified.
Consequently, because the obliged parties have not been defined an a satisfactory
manner, and the extent to which different corporate activities should be included is unclear,
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the article can be considered relatively ambiguous in terms of the clarity of its obligation and
its concepts.
Nature of the directive and discretion in relation to requirements
As discussed in chapter 2, the EED can be considered a minimum directive. There are two
articles that leave a significant degree of discretion for the member state. These are the
requirements which an energy audit has to adhere to: the minimum requirements as they are
set out by ANNEX VI of the EED as well as article 17 EED which pertains to the certification
of energy audits i.e. the requirements that member state intent to place on what constitutes a
qualified energy auditor. Recalling the articles text, it refers to ANNEX VI in relation to what
standards audits have to adhere to.
Minimum criteria for energy audits including those carried out as part of energy
management systems
The energy audits referred to in Article 8 shall be based on the following guidelines:
(a) be based on up-to-date, measured, traceable operational data on energy
consumption and (for electricity) load profiles;
(b) comprise a detailed review of the energy consumption profile of buildings or
groups of buildings, industrial operations or installations, including
transportation;
(c) build, whenever possible, on life-cycle cost analysis (LCCA) instead of Simple
Payback Periods (SPP) in order to take account of long-term savings, residual
values of long-term investments and discount rates;
(d) be proportionate, and sufficiently representative to permit the drawing of a
reliable picture of overall energy performance and the reliable identification of
the most significant opportunities for improvement.
Energy audits shall allow detailed and validated calculations for the proposed
measures so as to provide clear information on potential savings.
The data used in energy audits shall be storable for historical analysis and tracking
Figure 7: minimum requirement energy audits from EED, ANNEX VI
In the guidance not on article 8, the Commission adds that member states: ‘may add
additional elements when developing criteria based on Annex VI. They may also indicate in
which circumstances a particular part of the six elements or criteria would be most relevant’
(Commission, par. 42, Guidance Note)
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Article 16
Availability of qualification, accreditation and certification schemes
1. Where a Member State considers that the national level of technical competence,
objectivity and reliability is insufficient, it shall ensure that, by 31 December 2014,
certification and/or accreditation schemes and/or equivalent qualification schemes,
including, where necessary, suitable training programmes, become or are available for
providers of energy services, energy audits, energy managers and installers of energyrelated building elements as defined in Article 2(9) of Directive 2010/31/EU.
2. Member States shall ensure that the schemes referred to in paragraph 1 provide
transparency to consumers, are reliable and contribute to national energy efficiency
objectives.
3. Member States shall make publicly available the certification and/or accreditation
schemes or equivalent qualification schemes referred to in paragraph 1 and shall
cooperate among themselves and with the Commission on comparisons between, and
recognition of, the schemes.
Member States shall take appropriate measures to make consumers aware of the
availability of qualification and/or certification schemes in accordance with Article
18(1).
Figure 8: article 16 EED on auditor requirements
Due to the general nature of the audit requirements that member state shave to transpose,
there is greater potential for difficulties. Member states indicated that there was discord as to
how to approach these requirements. Some member states meant to go beyond this
requirement, while others wanted businesses to have greater discretion in this regard.
(Executive Summary) Are the member states that have implemented requirements stricter
than those set out by the directive also the ones that show greater transposition delay than
those that do not?
Requirements for audits
The extent to which adding requirements to the minimum requirements of the directive has
resulted in a slower transposition time is established in this section. The requirements placed
on energy audits have been discussed above. This information is presented in the table below.
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Audit Requirements
Req. from More
ANNEX
specific req.
VI
National
law(s)
Delay
The United
Kingdom:
0.6
months
Yes
Yes
16.5
The
Netherlands: months
Yes
No
1
month,
9.4
months
10.7
months
Yes
No
Yes
Yes
Denmark
0.9
months
Yes
No
Slovakia:
6
months
Yes
Yes
Italy:
Germany
Table 6: overview of more specific requirements in member states
Member states are expected to follow the criteria established in the directive. While it is
expected that this is the case, it may not be self-evident as there is the possibility that member
states do not follow the requirements of a directive in a satisfactory manner. This has not been
the case. However, there is a possibility to impose more specific or stricter requirements. It
has been hypothesized that imposing more specific requirements will increase the likelihood
of slow transposition. There appears to be no definitive relation between transposition delay
and the choice to impose more specific requirements.
Requirements for auditors
Several member states have chosen to implement a certification scheme for energy auditors,
requiring a certain level of education or professional experience. As implementing these
requirements is considered to be more complex than not doing so, member states that have
implemented such a certification scheme are expected to show longer transposition times than
those that do not. The more expansive and strict the requirements are, the more difficult it is
assumed to implement the system. The requirements can consist of the following: registration
for auditors, educational requirements, professional experience and keeping knowledge up to
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date. The presence of each requirement in a member state will dictate the expansiveness of the
requirements for auditors.
New
auditor
certification
scheme?
National
Delay Registration Educational Professional Keeping
law(s)
req.
exp.
up
knowledge
0.6
Coordinating Not explicit, Two year
Not
The United
months lead assessor by approval professional explicitly
Kingdom:
by
of trade
experience
required
Environment bodies is
and
Agency
required
involvement
with at least
two audits
16.5
No
No
No
No
The
Netherlands: months
In house
and ext.?
Other
in -house
and external
auditors
One
day
training
course
in -house
and external
auditors
No
Italy:
1
month,
9.4
months
Not yet
entered into
force;
existing
requirements
apply
Germany
10.7
Federal
months database
Higher
education
degree
Additional
exp. of three
years
Not
required
in -house
and external
auditors
/
Denmark
0.9
Private body
months registration
Not explicit,
but approval
of trade
bodies is
required
Not explicit,
but approval
of trade
bodies is
required
Not
required
in -house
and external
auditors
/
Slovakia:
6
Database of
months ministry of
economy
Relevant
higher
education
degree
Work
experience
required
based on
education
level
(maximum
five years
exp., min.,
two years
Refresh
courses
every three
years
in -house
and external
auditors (int.
audits need
to be
registered as
well)
Pass an
exam
Table 7: overview of auditor qualification schemes
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The same as in relation to stricter audit requirements, there is little evidence that a
more complex system of auditor requirements/certification has in inherent influence on the
transposition delay of this article.
Member state and the directive
This section of the explanatory factors pertains to the ‘goodness of fit’ presumptions.
National approaches to energy auditing
Increasing energy efficiency can be said to serve an important goal across the EU.
However, member states have chosen to deal with the issue in divergent ways. Especially in
relation to energy audits, a great deal of divergence, ranging from no policies to
comprehensive voluntary agreements, can be discerned. There are several countries that had
not, before the implementation existence of the EED, had no mandatory requirements in the
field of energy audits. It is not useful or practical to mention every energy efficiency related
measure in each member state. These member states with no existing legislating shall be
considered as having a high degree of misfit as conceptualized by (Falkner et al., 2007)
provided that the scope of application is not limited.
The United Kingdom
In the UK, several policies related to energy efficiency were in effect before the EED
came into force in 2012. First of all, the CRC Energy Efficiency Scheme is an arrangement
which has the goal of improving energy efficiency and reducing emissions in large (nonenergy intensive) enterprises in both the public and private sphere. It is designed to encourage
these enterprises to prioritize investments in energy efficiency. The scheme includes
monitoring and reporting of energy consumption thus raising awareness of the Board of an
enterprise for opportunities of increasing energy efficiency. (Environment Agency, 2015b)
Second, from October 2013, UK enterprises have been required to report on greenhouse gas
emissions in annual reports. (Environment Agency, 2015b) Third, enterprises may be covered
by the emission trading scheme. (Environment Agency, 2015b) Fourth, climate change
agreements (CCA), are designed to provide industries with discounts on taxes in return for
meeting certain energy efficiency requirements. (Environment Agency, 2015b) Fifth, the
‘Green Deal’ provides for a financing scheme for increasing energy efficiency in buildings.
Financing is provided for energy efficiency increasing measures in homes and businesses
which are repaid through cumulative energy savings. (Environment Agency, 2015b) Sixth,
energy performance certificates (EPCs) were the product of another directive; it categorizes
scores on energy efficiency in buildings. (Environment Agency, 2015b) Lastly, display
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energy certificates (DECs) is similar to the previous measure in that it pertains to energy
scores for buildings, however, recommendation for increasing energy efficiency accompany
these scores. (Environment Agency, 2015b)
The measures of article 8 EED touch upon some of the same issues as these existing
policies. However, these existing measures are seen as operating in synergy with the energy
efficiency obligation. Work that has been conducted in the context of this other scheme is
seen as contributing to ensuring compliance of enterprises with the energy efficiency
obligation. (Department of Climate and Energy, 2013)
This analysis of existing policies leads to the qualification as a high degree of legal
misfit as is it can be asserted that important qualitative innovation have taken place in the UK.
However, it can be said that there is a limited scope of application, as a multiple policies
already governed energy audits in enterprises through various means.
The Netherlands
In the Netherlands it is formalized into law, that there are many activities which are
performed by enterprises that can impact the broader environment in which they operate.
(Dutch Ministry of Infrastructure and Environment, 2015a) This is meant to be interpreted in
the broadest sense and these activities can range from environmental degradation in terms of
water and air pollution to disturbances to cause to others’ sight, sound smell etc. The purpose
of the Activities Decree on Environmental Management is to make sure that the activities
performed by enterprise which impact their broader environment in such a way are limited to
an acceptable level in the case of the latter examples, and to the greatest extent in relation to
the former.
Using energy in a purposeful i.e. non-wasteful way is an integral part of preventing
environmental degradation as a result of CO2 emission. As such, there is a responsibility for
an enterprise to have at least a minimal degree of ambition in realizing purposeful and nonwastefulness of energy. A permit to conduct their operation is granted to an enterprise based
on their activities and a second division is made based on the amount of energy they use in
doing so.
Based on the nature of the enterprises activities it can be subdivided into one of three
categories; A, B, or C. This typology determines whether or not an enterprise should apply for
a certain permit, and what requirements this permits entails. For the latter, type-C enterprises,
this means that requirements for energy efficiency improving measures are incorporated
within their permits. Both other types have to comply with the same substantive requirements,
however, type-A enterprise does not have the requirement to notify the competent authority
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e.g. the municipality, whereas type-B does. (Dutch Ministry of Infrastructure and
Environment, 2015a)
The division of enterprises into types A, B and C is relevant in relation to energy
efficiency insofar as requirements on energy efficiency improving measures are incorporated
into the permit of type C. The relevant division between the other two types pertains to the
amount of energy they use. A file pertaining to all aspects that are relevant to the enterprises’
impact on the environment, including annual (estimated) energy use implemented measures
etc. is created and maintained by the competent authority. The existence of a database
containing several energy efficiency improving measures can be used to ascertain what
specific measures can be implemented in a company of a specific type. Besides maintaining a
file on energy use and implemented measures, the competent authority may also request
additional data as well as ensuring that a sufficiently realistic and effective plan on energy
efficiency (and its future improvements) in that specific enterprise or conduct an investigation
of the company, however, the last option is only available when the enterprise is classified as
a large user of energy.
There are two main voluntary agreement schemes currently in operation; the long-term
agreement 3 (LTA-3) and the long term agreement on energy efficiency (LTAEE). These two
schemes differ based on the types of enterprises participating. While they are both accessible
to all businesses that are final consumers of energy, the latter is aimed at enterprises that are
wholly or partly covered by the emissions trading system (ETS). Participation in these
agreements can be considered widespread with 1100 participating enterprises that account for
80 percent of industrial energy use as well as 25 percent of energy use in the Netherlands.
These agreements are concluded between relevant minsters and enterprises and adherence to
its provisions is independently monitored by the Netherlands Enterprise Agency.
In relation to the substance of these agreements, enterprises agree to submit an energy
efficiency plan and submit yearly reports as to the progress toward achieving the goals set out
in the energy efficiency plan. Further agreements have been made with, for instance, industry
to implement energy management systems based on international standards (ISO 50001).
Article 2.15 of the activities decree is closely related to the energy audit obligation,
though it is a separate requirement that has been in effect since before the EED was starting to
be transposed. This article prescribes the mandatory implementation of energy efficiency
increasing measures for certain enterprises. The distinction between enterprises that fall
within the scope of this requirement is based on energy use of the enterprise, rather than size
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in terms of employees, or turnover. An enterprise has the legal responsibility to implement
every energy saving measures when the following conditions apply:

the enterprise uses more than 50 000 kWh of electricity a year;

it has a minimal annual use of 25 000 m3 of natural gas or its equivalent in fuel

the energy efficiency saving measure has a simple pay-back period of five years or
less.
An exception is made for certain enterprises when they are covered by the emissions
trading system. There are no requirements that are directly related to the transposition of the
audit obligation that require a more strict approach to either the auditor qualifications, audit
requirements, obliged parties etc.
It can be concluded that there is a high degree of legal misfit in the Netherlands as
article 8 EED imposes several important addition to the legislative environment in terms of
energy audits. However, the scope of application is quite limited as a significant portion of
enterprises was either participating in voluntary agreement schemes or subject to other types
of legislation.
Italy
Legislation in regards to energy efficiency can be considered somewhat sparser in
Italy. Much of the legislation pertains to transposed directives (Energy Performance of
Buildings, Eco-Design). Italy is in an ongoing process of implementing a ‘White Certificate’
system. These certificates are ‘securities that certify the achievement of energy savings in
end-use of energy through actions and projects to increase energy efficiency’. (Odyssee-Mure,
2014) However, these certificates place the job of saving energy on energy providers, rather
than the responsibility lying with the end-users. In relation to energy audits there have been
several regionally administered programs to promote/finance energy audits. However, these
were mainly directed at SMEs and not at the national level. In sum, there have nog been many
national legislative initiatives in Italy that relate directly to energy use of ‘large’ enterprises or
energy audits in relation to the energy use of these enterprises.
Thus, it can be concluded that the degree of misfit in terms of the existing legislative
environment in Italy can be considered low. ENEA can ensure the application of measures
such as that produced by article 8 EED. However, no previous methods of indexing
enterprises based on size and employees existed. The degree of legal misfit in Italy is high,
there is little existing legislation in this area. Moreover, the practical significance is high.
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Previous arrangements on energy efficiency improvements or energy audits were hardly
present.
Germany
In Germany, there are several existing national policies that address the issues that are
related to energy efficiency and energy audits. There are several laws and provisions that deal
with energy labeling of products and initiatives that support the initiating of energy efficiency
increasing measures in SMEs, however these will not be elaborated upon as they do not
directly relate to the subject matter at hand: energy efficiency in (large) enterprises. In regards
to those measures several can be considered important. These measures pertain to the energy
performance of buildings, for instance. The ‘Stormsteurgesetz’ and the ‘Energiesteurgesetz’
determined that companies may be eligible for significant energy tax rebates of up to 90
percent should they obtain an ISO 50001 certification. (Odyssee-Mure, 2015)
In Germany there were no laws applicable that directly govern the subject matter at
hand before the transposition of article 8. The legal misfit is high in Germany. Existing
legislation needed to be amended in order to fulfill requirements due to article 8. In relation to
the practical significance, a great deal of enterprises in Germany have an ISO 50001
certification due to the tax incentive scheme. Such a certification grants an exemption to
conducting the energy audit obligation. Thus, specifically in relation to audits one can say that
the practical significance is limited.
Denmark
The legislative environment in Denmark looks as follows. In 2012, the Danish
parliament wanted to increase the use of renewable energy sources. Due to domestic tax
policies, fossil fuels were more expensive, thus there is little incentive for industry to convert
to renewable energy sources. ‘Renewable energy for production processes’ sets-up a subsidy
scheme which promotes energy use of renewable energy in industry. (Odyssee-Mure, 2013) A
voluntary agreement was administered in Denmark from 1996 to 2013. This voluntary
agreement has as a goal to ‘encourage energy intensive companies to improve their energy
efficiency’. (Danish Energy Agency, 2015) The most important means of attaining this goal
was through energy management, conducting investigation focusing on improving energy
efficiency and dealing with investment projects in improving energy efficiency. (Ibid.)
However, as mentioned above, this scheme ended in 2013 and was not renewed. Both the tax
arrangement in relation to renewables and these voluntary agreements can be considered the
important legislative aspects in Denmark which relate to the subject matter of article 8. A
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final arrangement existed from 1993 until 2001 in the form of subsidies for various energy
efficiency related projects, including energy audits. (Ibid.).
Consequently, it can be concluded that there is a low degree of misfit between existing
polices in Denmark and article 8. The policies that potentially overlapped or that may be
contrary to the rules of the EED, in terms of providing subsidies for energy audits, expired
before the adoption of the EED.
The Danish Energy Agency has is designed to apply measures in the vein of the EED.
However, the existing internal processes could not cope with the application of the EED, as
no registry existed that indexed the obliged enterprises on a national level. Consequently, it
was even ambiguous how many enterprises would fall within the scope of the obligation.
The policies in Denmark that govern matters related to article 8 EED mostly expired
before the adoption of the EED. Thus, the legal misfit is considered to be high and, but one
cannot speak of a limited practical application.
Slovakia
Slovakia has 37 energy efficiency related polices in different subject ranging from measures
related to SMEs to public procurement. (Odyssee-Mure, 2015) The majority of the existing
polices pertain to the energy efficiency in buildings in relation to their technical properties or
thermal installation. However, in Slovakia, there were mandatory energy audits for industry
and agriculture. The threshold on which enterprises in these sectors were obliged was based
on energy use of that enterprise. According to Slovakia NEAAP there are some 614 ‘large’
enterprises in that country. Before the EED came into force some 210 energy audits were
conducted by enterprises in the industrial and agricultural sector that have high levels of
energy use. In this context audits needed to occur every five years.
Thus, it can be concluded that there is a high degree of legal misfit, however, the scope
of application can be considered limited as a relatively large part of companies were already
covered by regulations similar to those resulting from the implementation of article 8.
Legal misfit
The United
Kingdom
High
Limited practical
significance
Yes
The Netherlands
Italy
Germany
Denmark
Slovakia
High
High
High
High
High
Yes
No
Yes
No
Yes
Policy Misfit
Delay
Medium/low
0.6
Medium/low
High
Medium/low
High
Medium/low
16.6
9.4
10.7
0.9
6
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Conclusion from goodness of fit assessment
The goodness of fit does not appear to explain the variation in transposition from
(almost) on time (6 months or less delay) and significant delays (more than 6 months). There
are member states that show a high degree of misfit and a relatively fast transposition time,
such as Denmark, and vice versa in the case of the Netherlands.
Member state characteristics - transposition
The goodness of fit has shown not to be able to adequately explain the differences in
transposition. What can be said is that the transposition time appears to represent the pattern
established by Falkner (2005) in relation to the different worlds of compliance. The extent to
which this is the case is established below. The patterns as described by Falkner (2008) are
reflected to some degree. Denmark, the nation that belongs to the ‘world of law observance’
according to Falkner (2008) was substantially faster in terms of its transposition than most of
its counterparts belonging to the ‘world of domestic politics’.
The nations that are said to belong to the ‘world of domestic politics’ show a degree of
divergence in the size of their transposition delay. The two outliers will be used to assess the
elements related the what facilitates or constrains implementation in the world of domestic
politics. The UK was the fast, even faster than Denmark, whereas the Netherlands was
slowest by a wide margin. Seeing as the main factor that determines transposition speed in the
‘world of domestic politics’, an explanation can be found in the priority that energy efficiency
related matters have in the respective countries.
In the UK, both governmental interest and interest group preferences appear to favor
greater action and progress in relation to energy efficiency increases in UK businesses. A
significant emphasis has been placed on the saving opportunities that can be the result of
energy efficiency gains. Case in point is the UKs energy efficiency strategy which envisages
UK leadership in terms of energy efficiency gains in relation to other industrialized nations.
(Department of Energy and Climate, 2013) Moreover, an influential interest group
representing leaders form business, politics and civil society has regularly pushed the UK
government through publication to make energy efficiency a greater national priority.
(Aldersgate Group, 2015)
In the Netherlands, the slowest transposing state, it does not appear as though energy
related matters are a lower priority, only that the priority appear to prefer domestic
arrangements. The Energy Agreement for Sustainable Growth, which is an agreement
concluded between a great deal of societal interests that indicate a broad societal interest and
realization of the importance of in the environment and energy use. (SER, 2013) Some of the
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arrangement in this agreement serves as the implementing measures for EU requirements, also
pertaining to some aspects of the EED. In relation to energy efficiency, the long-term
agreement that is discussed in chapter 8 serves as an important tool of increasing energy
efficiency in enterprise. In this context it becomes clear these domestic arrangements are
considered more important tools of increasing energy efficiency than the obligation as it has
been discussed throughout this research.
Taking this into account, some elements of the ‘world of transposition neglect’
become visible when taking into account that the Commission has initiated infringement
procedures (in relation to almost all member states) for non-transposition of the EED.
Favoring domestic instruments and taking action in response to infringement procedures. The
last factor related to administrative inefficiencies is also present to some degree. The
sometime-troublesome inter-ministerial cooperation and concern about administrative
capacity in the Netherlands have been well documented in the past. (Mastenbroek, 2007)
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Chapter 10: Conclusions
In answering the research question on the how article 8 has been implemented and
what explain the transposition behavior, the following conclusion can be drawn. The overall
pattern of timeliness in implementation mixed. The member states under research appear to
show an even split in those transposing (almost) on time and those that show significant
delays.
In terms of correctness, the picture is more complicated. In term of the transposition of
the substantive rules; there are some apparently minor, but undesirable differences. Many of
the substantive provisions can be considered relatively vague. This means that it is hard to
discern the correctness in these substantive terms. However, what can be seen is that there are
differences in what constitutes an exemption to conduct energy audits, how the ‘non-SME
criteria’ need to be applied, how much of energy use should be audited and how to deal with
‘linked’ enterprises.
The aspects of correctness pertaining to the effective application show little problems
at first glance. All member states have provisions in place for the application of the
substantive rules and there is some degree of verification procedures present in all states. The
effectiveness of these respective measures is something to be addressed in future assessments.
The enforcement types that are applicable in the two member states under
investigation show that one the Netherlands has a general propensity toward an
accommodative approach as a result of its policy legacies (the voluntary agreement schemes
and agreements between societal actors in relation to energy). In contrast, the UK adheres to a
more centralized command-based approach to ensuring compliance.
The directive characteristic may influence the timeliness and correctness of
transposition to some degree, however, due to the difference between member state, who have
to transpose the same article, it cannot be considered an adequate explanation to transposition
delays of article 8.
The goodness of fit approach alone does not provide an explanation for the variation in
transposition time of article 8 EED. An analysis of the directive itself in terms of its concepts,
scope and application has shown that the directive in general has been considered somewhat
confusing. This may explain a delay in general, however not the differences between member
states. The member states that have elected to further specify many aspects of the directive in
relation to audit requirements and auditor certification have not appeared to be directly related
to significant delays. The implementation in Slovakia is complete insofar as it pertain to the
audit obligation existing, however the legislation pertaining to the audit requirements is as of
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yet not in force. However, interpreting this as incorrect transposition is somewhat reaching as
the directive specifies little in regards to auditor requirements.
In relation to the ‘worlds of compliance’ the theory appears to have an explanatory
value in relation to the transposition of article 8. The country which is classified as one where
transposition would trump domestic concerns transposed the requirements very quickly. In the
two outliers of the ‘world of domestic politics’ it became apparent that the country which
appears to favor domestic policy instruments did not transpose
This research has analyzed the transposition of article 8 EED in terms of timeliness
and correctness and has characterized the enforcement system in a selection of member states.
This analysis is has been guided by theories on implementation and enforcement. The purpose
was not to perform a verification test on the theories that were used. They were employed to
understand the situation at hand in relation to the implementation of article 8.
This type of analysis means that the levels of compliance of enterprises have not been
addressed. This is impossible at the moment, however, the deadline on the 5th of December, at
which time all relevant enterprises have to have conducted an audit and notify the relevant
agency, is fast approaching. Current reports place serious doubt as to whether the enterprises
will comply with their obligation by that date and there is even talk of pushing back the
deadline in order to avoid taking enforcement action against a majority of relevant enterprises.
(Bennet, 2015)
Whether enterprises will comply at the first moment of compliance and in every four
years thereafter will be an interesting subject of study. Such studies could also look at the
degree to which enforcement action will be taken as a result of the non-compliance and the
effectiveness of the applied sanction. However, the implementation or compliance with this
requirement does not directly contribute to energy efficiency gains. Even in the case of perfect
transposition and full compliance of enterprises across the EU, there is no guarantee that any
energy efficiency gains will be achieved. If enterprises elect not to act on any new revelation
that may be the result of energy efficiency saving opportunities that have been described in an
energy audit report, than the energy audit obligation will have been superfluous. It is for this
reason why quality requirements on energy audits and energy auditors are important.
Moreover, other policies such as energy efficiency investment funds also correlate with the
eventual goal. Achieving the overall energy efficiency target is dependent all these policies
working together. While progress in relation to these separate policy components may be
incremental at times, it is the larger picture of all these policies having an effect that will
determine the extent to which the goal will be achieved.
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Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Appendix
Figure 9: share of energy savings an application of the EED without additional member state measures
will achieve with the share of article 8 representing the green portion; ‘behavior audits’. (European
Council for an Energy Efficienct Economy, 2013)
Figure 10: visual representation EnMS (U.S. Department of Energy, 2015)
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Cover letter interviews
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Knowing Energy Use is Half the Battle?
Assessing and explaining transposition behavior and enforcement in relation to article 8 of the Energy Efficiency Directive (2012/27/EU)
Guideline Questions Interview
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