FAQ: What does the energy savings obligation under the Activities Environmental Management Decree mean today and what changes will apply as of 1 July 2023?

The following topics are addressed below:

1. Which companies are or are not subject to the energy savings obligation?
2. To whom does the energy savings obligation apply?
3. What is the information obligation associated with the energy savings obligation?
4. Does a company comply if it implements so-called ‘recognized measures’ or ‘equivalent measures’?
5. How does the list of approved measures relate to the information obligation?
6. What are the consequences of failure to take all energy saving measures on time and to report on them (correctly)?
7. What calculation method is used?
8. What are the changes as of 1 July 2023?
9. What does the energy savings obligation look like under the Environment and Planning Act?

1. Which companies are or are not subject to the energy savings obligation?

The main rule regarding energy savings is set out in Article 2.15(1) of the Activities Decree. That article obligates those operating a Type A establishment or Type B establishment to implement all energy saving measures with a payback period of five years or less.

Exemptions from Article 2.15 of the Activities Decree

It is apparent from Article 2.15(7) of the Activities Decree that the energy savings rule does not apply if the energy consumption in the establishment in any calendar year is less than 50,000 kWh of electricity and less than 25,000 m3 of natural gas equivalents of fuels. Establishments covered by the Emissions Trading Scheme and greenhouse horticulture companies participating in the CO2 equalization system are also exempt from the energy saving rule and therefore also from the information obligation for the time being (see Article 2.15(8) of the Activities Decree); this change is explained in more detail in paragraph 8 ‘What are the changes as of 1 July 2023?’.

2. At whom is the energy savings obligation directed?

Article 2.15 of the Activities Decree is directed at the operator of an establishment. The operator of an establishment is usually the 'operator' of a establishment . The operator is the person who has the actual power to operate and control the establishment and who is responsible for meeting the establishment’s legal obligations. The criterion of actual control is decisive in determining who the operator is: the person or legal entity that has actual control over the activities taking place in the establishment is the operator. Legal control alone is insufficient (see, for example, ABRvS 04 November 2020, ECLI:NL:RVS:2020:2639, par. 3.4.)

3. What does the information obligation associated with the energy saving obligation entail?

Under Article 2.15(2) of the Activities Decree, companies had to report to the competent authority, first on 1 July 1 2019 and then once every four years, which energy saving measures had been implemented. This information obligation applies only to companies subject to the energy saving obligation and thus only to annual energy consumption of 50,000 kWh of electricity or 25,000 m3 of natural gas or natural gas equivalent. Establishments established after 1 January 2019 have to report no later than one year after their establishment (Article 2.15(10) of the Activities Decree). Based on this information, the competent authority can make an initial assessment of which companies may not meet the energy savings obligation. The information needed for efficient supervision and enforcement depends on the type of measures taken. For this reason, the content of the reporting requirements distinguishes between companies that have implemented all recognized measures and those that deviate from them. See paragraph 4 for more information on recognized measures.

The information obligation also applies to companies that were previously affiliated with the Multiyear Energy Efficiency Agreements 2001-2020 (MJA3).

Under Article 2.15(9) of the Activities Decree, this obligation to provide information did not previously apply to companies not subject to a permit that had joined the Multiyear Energy Efficiency Agreements 2001-2020 (Meerjarenafspraken energie-efficiëntie 2001-2020 – MJA3) and the Multiyear Energy Efficiency Agreement for ETS companies (Meerjarenafspraak Energie-efficiëntie ETS-ondernemingen – MEE) (the MJA3/MEE Covenants), in which the participating companies undertook to make efforts to substantially improve energy efficiency by implementing energy saving measures. Indeed, the Multiyear Agreement provided its own framework for the provision of information on the energy saving measures. On the expiry of the covenants on 31 December 2020, the ordinary rules and regulations in the field of energy saving will apply again. The rules that apply depend on the type of business.

4. Does a company comply if it implements so-called ‘recognized measures’ or ‘equivalent measures’?

With regard to the information obligation, it can be unclear by means of which measures the obligation of Article 2.15 of the Activities Decree can be met. For this reason, a list of recognized energy saving measures (erkende energiebesparingsmaatregelen – EML) has been included in the Activities Regulation (Article 2.16 in conjunction with Appendix 10 of the Activities Regulation). The operator of an establishment who implements these measures in any event complies with the energy saving obligation in Article 2.15(1) of the Activities Decree. This list serves as an aid: the energy saving measures are not compulsory.

The operator of the establishment is free to meet the energy saving obligation otherwise than by taking the approved measures, for instance in connection with innovative applications or company-specific circumstances. It is expected that the competent authority will also gain an increasingly better impression of other frequently occurring alternatives in a sector from the reports that companies must submit on the grounds of the information obligation (NvT, Stb. 2019, 167, p. 6). 

5. How does the list of approved measures relate to the information obligation?

If the operator of an establishment has taken all recognized measures that apply to its industry, it suffices for it to include them in the report that it must submit on the grounds of the information obligation. It is up to the competent authority to determine, based on a registrant's justification, whether the information requirement has been met. The competent authority then determines whether the energy savings obligation has also been fulfilled based on the reported information. A registrant does not have to prove in the form of receipts that the measures included in the report have actually been taken (NvT, Stb. 2019, 167, p. 18). Companies can complete the reporting via a web form. Operators can select the recognized measures that apply to their industry. Already known alternative measures (that are not yet recognized measures) can also be selected. Reporting must take place via a central reporting system, managed by the Rijksdienst voor Ondernemend Nederland (RvO). The RvO has made available a step-by-step plan for the information obligation on energy saving, so that companies can check whether the duty applies to them.

If alternative equivalent measures are taken instead of the approved measures, the report must contain a description of those alternative equivalent measures. In those cases, the registrant must report as follows (NvT, Stb. 2019, 167, p. 6):

• If a registrant deviates from the list of approved measures or implements alternative measures, it must describe which alternative measure was implemented. The competent authority must be able to deduce from this whether the measure is equivalent. This also follows from Article 2.15(3) of the Activities Decree.
• If a proprietor reports that it has not taken all recognized measures, without mentioning alternative measures, it is likely, according to the Minister, that the proprietor does not comply with the energy savings obligation.
• If no recognized measures for the industry have yet been included in the list of recognized measures, the registrant must report what other measures have been taken.

6. What are the consequences of failure to take all energy saving measures on time and to report on them (correctly)?

If the operator of an establishment fails to comply with the energy savings obligation or the information obligation, this is an independent violation against which the competent authority can take enforcement action. The competent authority can impose an order subject to a penalty on the operator to implement certain energy saving measures within a specified period, because they will have been recovered within five years. If a company or establishment falsely reports having taken a measure, that is even considered an economic offence against which criminal action can be taken under Article 1a of the Economic Offences Act (Wet economische delicten).

According to the Explanatory Memorandum, if it is evident that a company or establishment is in breach of the obligation to provide information, for example by failing to submit a report or by submitting a blank report, the competent authority may, in principle, assume that the energy savings obligation has not been complied with either. In our opinion, this is an oversimplification: the competent authority must still make a plausible case that the energy savings obligation has been breached. In our opinion, the mere fact that the information obligation has not been fulfilled does not suffice for that purpose. However, it does follow from a ruling by the Administrative Law Division of the Council of State that the competent authority may use industry data as a starting point when assessing whether the energy savings obligation is being violated (ABRvS 23 May 2018, ECLI:NL:RVS:2018:1688, AB 2019/187, with commentary from V.M.Y. van 't Lam and E.C. van der Maden). This ruling also shows that an operator can successfully dispute that certain measures are not profitable for a company. In our opinion, it is then up to the competent authority to demonstrate on the basis of further calculations that Article 2.15(1) of the Activities Decree may nevertheless have been breached.

7. Which calculation method is used?

The operator must implement all energy saving measures with a payback period of five years. Article 2.16c of the Activities Regulation refers to the calculation method for determining the payback period. Appendix 10a of the Activities Regulation sets out the following formula:

TVT = (I + F)/B, in which
TVT is the payback period in years;
I is the (additional) investment in euros;
F is the cost of financing the (additional) investment in euros; and
B is the annual cost savings in euros.

In addition, when calculating the payback period, no account is taken of inflation or expectations of future price trends. We wonder whether this is appropriate in times like these, with high inflation. Also, the calculation of costs and benefits does not take into account effects on corporate tax payable (Stcrt. 2019, 38941, p. 2). However, the Minister has expressed the intention to calculate the payback period using average forward prices of energy from 2023-2027 (Parliamentary Papers II 2022/23, 33118, 242, p. 7).

8. What are the changes as of 1 July 2023?

Tightening and expanding of the energy saving obligation to an obligation to make energy consumption more sustainable

The energy saving obligation will be updated again on 1 July 2023 (Decree of 3 April 2023 amending the Activities Decree on Environmental Management and the Environmental Law Decree in connection with the updating of the energy saving obligation (Stb. 2023, 111)). This changes the energy saving obligation to an obligation to make energy consumption more sustainable. The reason for this is related to the entry into force of the Environment and Planning Act; it distinguishes between activities and buildings. The upcoming changes were explained by the Minister of Climate and Energy, among others, in the letter of 4 July 2022 (Parliamentary Papers II 2021/22, 30196, no. 793).

Until the Environment and Planning Act comes into force, the changes will appear in, among others, Articles 2.14c and 2.15 of the Activities Decree, and more measures will become mandatory. It follows from the new Article 2.15 of the Activities Decree that, in addition to energy saving measures, measures for the production of renewable energy and measures for the replacement of an energy carrier will become mandatory, provided that the measures reduce CO2 and have a payback period of five years or less. The obligation to take all measures to make energy use more sustainable with a payback period of five years or less will now also include the efficient management and maintenance of these measures. This includes, for example, the proper adjustment of installations, regular maintenance, turning off lights outside office hours and cleaning ventilation grills.

In addition, the target group is extended to include companies that:

• are subject to a permit obligation (see Article 2.14c of the Activities Decree, from which it follows that, in addition to Type A and Type B establishments, the energy saving obligation is also declared applicable to Type C establishments);
• participate in the European Emission Trading Scheme (ETS companies) (Article 2.15(8) of the Activities Decree will expire on 1 July 2023), and
• participate in the cost equalization system reducing CO2 emissions from greenhouse horticulture (Article 2.15(8) of the Activities Decree will be repealed as of 1 July 2023).

Other important changes:

• For large energy users, where the energy use of the environmentally harmful activity in any calendar year exceeds 10 million kWh or 170,000 m3 of natural gas equivalents, an investigation obligation will be introduced. This obligation entails a four-yearly investigation of all possible measures to make energy use more sustainable by the activities of these companies. This obligation to investigate replaces the obligation to report as far as process-related energy use is concerned. The investigation focuses only on activities and processes. Large consumers will soon be required to identify process measures with a payback period of five years or less, include them in an implementation plan and implement them. For building-related energy use, the existing information obligation already applies and the EML can be used.
• An exception to the obligation to make energy use sustainable is introduced in cases in which an establishment is completely self-sufficient and thus no longer draws energy from a grid. An exception is also made for the use of biomass for the production of electricity and low-grade heat with a temperature not exceeding 100 °C.
• Companies and establishments subject to the energy saving obligation must report on measures to make energy use more sustainable by 1 December 2023.
• The supervision of the energy savings obligation (including the investigation obligation) will be assigned to a single party, namely the Environmental Department. This should contribute to the enforceability of the obligation.

More developments are in the pipeline. Among other things, it is apparent from the government’s Climate Policy Action Plan that the government will increase the payback period in the energy savings obligation to seven years in 2027 (Parliamentary Papers II 2022/23, 32813, no. 1230, p. 16).

9. What does the energy savings obligation look like under the Environment and Planning Act?

As of 1 July 2023, the energy savings obligation remains included in one regulation (Articles 2.14c and 2.15 of the Activities Decree). Under the Environment and Planning Act, which is currently scheduled to enter into force on 1 January 2024, the concept of ‘establishment’ will disappear from the Environmental Management Act and the energy saving obligation will be contained in three decrees.

• For environmentally harmful activities, this is regulated in Article 5.15 of the Decree on Activities in the Living Environment (Besluit activiteiten leefomgeving – Bal), which states for each environmentally harmful activity whether the energy savings obligation applies. The information obligation for environmentally harmful activities is regulated in Articles 5.15a and 5.15b of the Bal. In addition to Article 5.15 Bal, the specific duty of care of Article 2.11 of the Bal also applies to environmentally harmful activities, whereby this article can serve as a basis for imposing additional customized regulations.
• For (building) use functions, the energy conservation obligation is included in Article 3.84 of the Built Environment Decree (Besluit bouwwerken leefomgeving – Bbl). The information obligation for buildings is regulated in Article 3.84a of the Bbl.
• Other environmentally harmful activities (not regulated in the Bal) fall under decentralized rules and are in the environmental plan.

Under the Environment and Planning Act, a number of energy saving rules are transferred from the national government to municipalities. With the Environmental and Planning Act Implementing Decree (which provides for the transitional law and for the repeal or amendment of other Acts), the central government ensures that these rules automatically end up in the environment plan. These rules are known as the ‘dowry’. The authority for these rules passes from the central government to the municipality. As long as the municipality does not amend the environmental plan, the energy conservation rules covered by the dowry will remain in force (Article 22.51 of the Environmental and Planning Act Implementing Decree). Because the dowry is part of the temporary part of the environmental plan (the environmental plan present when the Environment and Planning Act enters into force under the transitional law), the municipality can adjust the energy conservation rules locally.

Currently, municipalities and provinces are the competent authority for supervision and enforcement of the energy savings and information obligation. Both municipalities and provinces have in most cases mandated the exercise of supervision and enforcement of the energy savings obligation to their regional environmental service. Under the Environment and Planning Act, the energy savings and information obligation will be added to the basic set of tasks of environmental services. The environmental service will then have to carry out supervision on behalf of the competent authority. Municipalities and provinces will then have to fully transfer the supervisory duties for these obligations to their environmental service (Stcrt. 2022, 17828, p. 8).

In addition, it is remarkable that for half of the companies listed in the Bal the energy savings obligation has been ‘turned on’, but for the other half of the companies listed in the Ball it has not. This 'turning on' means that the regulations explicitly state that the energy savings obligation must be met. For example, in Article 3.8 of the Bal (on transport, logistics and their support), the energy savings obligation is 'turned on' for companies in the fuel trade and tank storage business (see Article 3.270(2)(a) of the Bal), but not for companies working as vehicle salvage and roadside assistance. In practice, therefore, this means that the energy saving obligation does not apply to many companies. This seems at odds with the Minister's ideas that the energy saving obligation should apply to (more and more) companies. Under the Environment and Planning Act, at least on this point, this does not seem to be well regulated.

In conclusion
The obligations surrounding the energy saving obligation are still evolving. Not only is the energy saving obligation being broadened and the target group of the energy savings obligation expanded; the information obligation and the list of recognized measures are also being updated. For these reasons, it remains relevant for companies to continue to monitor legislative developments.

This blog is a compilation and an update of previous blogs on this topic:

• De meerjarenafspraken energie-efficiëntie (MJA3/MEE) zijn afgelopen: wat betekent dat voor de energiebesparingsverplichtingen van bedrijven?
• De informatieplicht voor energiebesparende maatregelen: een update en een waarschuwing i.v.m. energie-audits: let op 5 december 2019
• Informatieplicht voor energiebesparende maatregelen: uiterlijk op 1 juli 2019 rapporteren
• Introductie meldplicht voor energiebesparende maatregelen ligt tot 21 mei 2018 ter internetconsultatie voor

See also:

• V.M.Y. van ’t Lam & E.C. van der Maden, ‘De informatieplicht en de verplichting tot het treffen van energiebesparende maatregelen uit het Activiteitenbesluit onder de loep’, BB 2018/37.
• V.M.Y. van ’t Lam, ‘Het recht en energietransitie in de industrie’ in 2030: Het juridische instrumentarium voor mitigatie van klimaatverandering, energietransitie en adaptatie in Nederland, Den Haag: Boom juridisch 2020.

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