Amendment to the Energy Efficiency Act

Of course, the main problem with the white certificate system has long been the inefficiency of the Energy Regulatory Office (URE) and the resulting delays in issuing these securities, but this issue can be resolved outside the law by staffing the relevant energy department of the regulator. In this post, however, I would like to focus on issues related to the procedure for issuing white certificates and not discuss the subject of the URE’s human resources, which has already been discussed at length.

The amendment introduces many changes to help Poland achieve the target set out in Directive 2018/2002/EU. This applies in particular to national final energy savings, which, according to the new Article 18, must amount to at least 5,500 thousand TOE between 1 January 2021 and 31 December 2030. However, unlike the current obligation (valid until the end of this year), the described target will be achieved not only through projects aimed at improving energy efficiency at the end user or redeeming white certificates. A new instrument in this area will be the so-called alternative measures. These will be programmes and financial instruments enabling the implementation of projects aimed at improving energy efficiency, notified by the European Commission in the National Climate and Energy Plans.

However, moving on to more mundane issues, attention should be paid to a number of amendments aimed at streamlining and standardising the process of obtaining white certificates. The system will still be based on the so-called certification procedure from the Code of Administrative Procedure, but several issues will be changed in order to eliminate its shortcomings. Below, I will describe a few such improvements.

Firstly, the legislator has finally taken into account a situation, which is quite common in practice, where the amount of energy saved declared in the audit differs from the actual savings achieved after the project’s implementation. The provisions in this regard were imprecise, if only because the applicant (or, in fact, its manager, who is usually a member of the management board) could only submit a statement confirming that the savings declared initially had been achieved. If the values at the beginning and end of the project differed, there was no procedure for correcting the application or statement. In such a situation, the applicant was left with an unsolvable problem – he could not truthfully submit a statement on savings in accordance with the content of the certificates issued (this statement is submitted under penalty of criminal liability), and the procedure did not provide for the possibility of subsequently correcting the application for certificates. This impasse was also a source of abuse, whereby applicants ‘inflated’ audits to reflect the values indicated in the certificates. The popularity of this phenomenon was further increased by the fact that random checks of projects in enterprises were virtually non-existent.
Under the new wording, the regulations will allow for the submission of an application for a change to the certificate so that it includes the corrected values. At the same time, if the savings correspond to the values in the certificate and do not exceed 100 TOE on average over the year, the requirement to prepare and submit a post-implementation audit is waived. The amendment in question confirms, to some extent, a certain practice that has developed at the Energy Regulatory Office in the assessment of projects. The authority often allowed certificates to be corrected, but it should be noted that it had no legal basis for doing so. Now it has such a basis and will also be obliged to apply it.
It is difficult to overestimate this change, which will allow many entrepreneurs to break the deadlock they found themselves in due to the fact that the project they were implementing did not produce the declared effect, but still proved to be a useful and beneficial investment for the plant.

Another change that will make the procedure for issuing white certificates more realistic is granting the President of the Energy Regulatory Office the power to examine the incentive effect. Until now, the obligation to examine whether an entrepreneur had started a project before submitting an application for energy efficiency certificates was essentially based on European Commission guidelines and the GBER Regulation – the Energy Efficiency Act itself was silent on this issue. Of course, the URE staff were aware of the principles of operational aid and, to the extent possible, examined whether there was a so-called ‘incentive effect’ in a given case.
Unfortunately, this action by the URE also had no legal basis. The authority referred in this regard to the fact that white certificates were to be granted for ‘planned’ projects aimed at increasing energy efficiency, and therefore projects that had already been started were not eligible for support. This position is, of course, true, but the requirement for a certain legal status is one thing, and the procedural capacity to verify this requirement is another. In other words, the URE did not have the competence to check the start date of the project in detail, because the procedure for issuing certificates was carried out in the form of issuing attestations. When issuing certificates, the URE could in principle only rely on the content of the application, the statements submitted and the attached energy efficiency audit. Going beyond this scope was, in turn, condemned by the administrative courts as an action without legal basis.
In order to remedy this loophole, the legislator first defined the start of work and secondly authorised the authority to examine whether the project had started too early. If this is the case, the authority will refuse to issue certificates by way of a decision.

The above changes are, of course, only a fragment of the amendment, which I found particularly interesting from a practical perspective. In addition to these, the ‘statutory’ recognition of ESCO entities, whose market is currently developing very dynamically, deserves special attention. However, this is such a broad topic that I would like to describe it in a separate post. In the meantime, it is worth familiarising yourself with the changes described above, as they will have a significant impact on the process of obtaining white certificates.