The baseline calculation is set in final energy. Wouldn’t this inhibit fuel switch?

Take fleet electrification as an example. Replacing diesel vehicles with electric vehicles, saves on primary energy. However, the final energy saving for the oil company (obligated party A) means an increase in sales for the electricity company (obligated party B). So is this focus on final energy consumption (in the amended EED) as opposed to sales (in the former EED) not inhibiting fuel switch?

As of 2021, the calculation baseline for the energy savings obligation is set at 0.80% of final energy consumption (as opposed to 1.5 % of annual energy sales to final customers by volume until 2020 in the “former” EED). When considering consumption versus sales, this means that self-consumption is included in the baseline and hence makes the target more ambitious.

Art. 7 is an energy savings target. Total energy sales to final customers or final energy consumption of a Member State, averaged over the three-year period from 2016-2018, form the baseline to calculate the target. Obligated parties have to realise concrete measures and verify the respective energy savings to fulfil their target apart from the fact that they may have an increase in sales. The target each obligated party has to achieve, is the result of a distribution of the national target over all obligated parties, e.g. via energy sales, number of customers or thresholds.

In case energy savings in kWh electricity are calculated in primary energy terms, Member States may apply a default coefficient of 2.1. They may apply a different coefficient provided that they can justify it and consider the energy mix included in their NECPs. Consequently, this will automatically improve the performance of measures that rely on electric energy and will change the relative performance compared to the measures using fossil fuels or the former primary energy factor (PEF) of 2.5.

But ultimately, fuel switch is not fully taken into account in the EED revision. Indeed, renewables are not covered (except for the option in Art. 4 (f), to account for 30% of the renewables in buildings, as previously discussed). A better alignment of the EED and RED   could have been an opportunity to drive electrification.