The purpose of this Directive is to encourage energy efficiency through the development of a market for energy services and the delivery of energy efficiency programmes and measures to end users. The Directive covers most forms of energy sold to end users, including transport fuels.

This Directive on energy end-use efficiency and energy services (ESD) is a welcome addition to the family of European Directives dealing with the use of energy, and it is often referred to as the Energy Services Directive and sometimes as the Energy Efficiency Directive.

Rather than focusing on specific technologies or measures, the new Directive addresses actors and institutions and the way markets for energy and services function.

It will thus complement and improve the implementation of existing EU energy efficiency legislation, including the Directives on Energy Performance of Buildings, on Combined Heat & Power and on Energy labelling of appliances.

The End-use Efficiency and Energy Services Directive was adopted by the European Council on 14 March and formally entered into force on 17 May 2006. Member States have two years to transpose the Directive into national law.

The Directive defines and sets savings targets on a national level, and will require action by each Member State of the European Union.

Member States must achieve a minimum annual energy savings target of 9% by the ninth year in the period from 2008 to 2016. In line with this, each national government will have to produce energy efficiency action plans (EEAPs) in 2007, 2011 and 2014.

In their first EEAP, each Member State will have to report on how they will reach their targets and in the two subsequent plans they will also have to report on what has been achieved.

Although the targets are indicative and thus not mandatory, Member States have a clear legal obligation to adopt and aim to achieve the target, using appropriate cost-effective energy services and other energy efficiency improvement measures.

Besides the energy efficiency targets, the Directive sets the framework for Member State activities and measures in a number of areas, such as financing, metering, billing, promotion of energy services, and obligations for the public sector.

Member States are required to ensure that their public sector organisations play an exemplary role - in which case firm energy efficiency criteria should be part of the product purchasing and investment decisions.

Energy companies represent another important sector. For the first time, Member States are required to place energy efficiency obligations on energy distributors or retailers although there are a number of options which they can utilise, ranging from involving the energy distributors and/or the retail sales companies in energy efficiency activities, through to letting the energy distributors and/or suppliers contribute to funds for energy efficiency.

These obligations, while placed on energy companies, do not necessarily require activities on the part of energy companies, which may be carried out by other market actors.
Measurement and verification of energy savings achieved will be vital to the implementation of the Directive.

A committee with Member State government representatives is to be established to assist the Commission in the further development of a harmonised bottom-up/top-down system to measure the achievement of the energy savings targets.

eceee welcomes this Directive but stresses that the Member States' ambition level in the implementation of the Directive is key to the success. eceee is also a managing partner of Energy Efficiency Watch (EEW), a project aimed to monitor, evaluate and discuss the implementation of the Directive.

Key dates

• 30 June 2007 - MSs must submit their first energy efficiency action plans (EEAPs).
• May 2008 - Deadline for MSs to transpose Directive into national law.
• 30 June 2011 - Deadline for the second EEAPs to be submitted.
• 30 June 2014 - Deadline for the third EEAPs to be submitted.