10 November 2015

Energy audits in Germany – who is affected by the duty to implement?

On 4 December 2012, the EU enforced the Energy Efficiency Directive 2012/27/EU. To implement the Energy Efficiency Directive in Germany, the Energy Services and other Energy Efficiency Measures Act (“EDL-G”) was adapted. The changes came into effect on 22 April 2015. One of the fundamental changes under the EDL-G concerns the obligation on companies to implement energy audits for buildings located in Germany.

What is an energy audit?

An energy audit is an inspection, survey and evaluation of the energy sources and energy consumption of a building in order to ensure the most efficient use of energy in the building and to ensure waste is avoided. The energy audits are carried out by so-called “energy auditors” who must comply with the requirements of Section 8b of the EDL-G.

Who is obliged to carry out energy audits?

According to the EDL-G, all companies active in Germany are obliged to implement energy audits, regardless of their legal structure, registered office or their respective business sector.

The only companies excluded from the body of norm-addressees are micro-businesses and small and medium-sized enterprises (“SME”). Whether a company qualifies as a micro-business or SME is based on the definition set out in the European Commission’s Recommendation 2003/361/EG of 6 May 2003. The definition sets out threshold values for the number of employees, annual turnover and the annual balance sheet total.

As a result, all non-micro-businesses and non-SMEs are obliged to implement energy audits, even if they are simply a branch of a foreign company or are a foreign company that holds assets (for example, property) in Germany. Non-micro-businesses and non-SMEs are considered to be those undertakings which either: (i) have more than 250 employees worldwide; or (ii) have less than 250 employees worldwide, but achieve more than EUR 50 million in annual turnover and more than EUR 43 million in the annual balance sheet total.

When calculating the number of employees, annual turnover and annual balance sheet total, company affilia-tions must be considered globally. The following applies:

  • independent companies (including those with a non-controlling minority interest of less than 25% in another company) can be considered in isolation;
  • companies that hold a non-controlling minority interest of over 25% in another company (without a consolidated financial report) must proportionally pro rata attribute the number of employees and financial data of that other company to their own data;
  • companies that hold a majority interest in or control over another company (with a consolidated financial report) must incorporate 100% of that other company's figures relating to number of employees and financial data to their own data.

Whether any relevant company affiliations exist (such affiliations may even be established through natural persons) must be assessed on a case-by-case basis.

The reference date for determining whether a company has micro-business or SME status, for the first obligation period, has been set as 31 December 2014.

Which parts of the business does the obligation to implement energy audits extend to?

According to German law, the duty to implement energy audits solely affects those parts of the business and those assets situated in Germany. Parts of the business and assets located in other EU countries may be subject to equivalent obligations in those respective jurisdictions.

Implementation by 5 December 2015

The duty to implement energy audits is time critical and must be satisfied within the current calendar year: they must be completed by 5 December 2015. Thereafter, energy audits must be carried out every four years from the date the first energy audit was performed. As an alternative to the implementation of an energy audit, an environmental or energy management system can be put in place. It is sufficient if evidence of the initiation of such a management system is provided by 31 December 2016.

Risk of not implementing an energy audit

If a company obliged to perform an energy audit fails to fulfil its duty, a fine of up to EUR 50,000 may be imposed. The same applies to companies that untruthfully claim to hold micro-business or SME status. However, owing to the late implementation of the Energy Efficiency Directive in Germany, the authorities will probably weigh up each case individually when examining whether a company could reasonably be expected to have carried out an energy audit in due time.

For more detailed information, please view the German Federal Office of Economics and Export leaflet on energy audits

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