EED in the Fourth Omnibus Package:
Consequences and Possible Alternatives
The European Commission will propose a “Fourth Omnibus Directive on small and medium-sized enterprises”. We understand that some provisions of the Energy Efficiency Directive (EED), in particular Article 11 thereof, could be covered by the upcoming legislative proposal.
While simplification is an important goal, the timing and tools used to simplify and reduce bureaucracy should be carefully selected so as not to compromise the regulatory certainty that the recently adopted energy efficiency legal framework has created for businesses and investors:
- Timeframe: It is critical to avoid reopening primary legislation, especially when the implementation process is ongoing. The review of the implementation of the EED, scheduled for February 2027, will be a key moment to assess the impact of the directive on SMEs.
A possible inclusion of the EED in the Fourth Omnibus Regulation:
- It would undermine confidence in the EU regulatory framework and freeze investment decisions in both manufacturing capacity and energy efficiency projects, at a time when our local industries, such as efficiency, need predictability and market stability.
- It would delay or stop the implementation of the EED and potentially the entire energy efficiency legal framework, including the Energy Performance of Buildings Directive and the Eco-design and Labelling Regulations, as the EED is the overarching legislation that guides the energy efficiency framework. Ultimately, it would also jeopardise the follow-up to the Affordable Energy Action Plan, which builds on the implementation of the existing energy efficiency acquis.
Article 11 of the EED requires companies to implement an energy management system or carry out an energy audit if their annual energy consumption exceeds 85 TJ or 10 TJ, respectively. This article was recently revised in the 2023 DEE, and its previous version was based on the size of the companies. The new scope of the article was a reasonable change to ensure that this provision offers a more targeted approach that covers only those companies with higher energy consumption and therefore greater potential for energy (and therefore cost) savings. Companies with an energy consumption of less than 10 TJ are completely exempt from this requirement.
While SMEs account for a significant share of Member States’ gross energy consumption[1] (between 9% and 18% depending on the country), more detailed information and analysis is needed to assess their average energy consumption and the number of SMEs that would be covered by Article 11 of the EED. For example, according to our own calculations in five EU countries, the average energy consumption of SMEs appears to be substantially below the threshold of 10 TJ.
Alternative suggestions to the inclusion of the EED in the Bus
While the overall objective of simplifying existing regulations to boost economic competitiveness is important, it is crucial to strike the right balance and avoid reopening newly adopted legislative files that are just beginning to be implemented.
Alternatively, we recommend:
- Take advantage of the review of the EED, scheduled for February 2027, to assess and, where appropriate, revise certain provisions of the EED, including the assessment of how many SMEs are actually covered by Article 11 and therefore what the simplification potential of this Article is.
- Amend and adjust Commission Recommendation 2003/361/EC on the definition of micro, small and medium-sized enterprises to allow for a more flexible application of Article 11 of the EED.
- Amend and simplify Commission Recommendation (EU) 2024/2002 of 24 July 2024 laying down guidelines for the interpretation of Article 11 of Directive (EU) 2023/1791 in order to facilitate the fulfilment of undertakings with regard to energy management systems and energy audits.
- Support SMEs in the adoption of energy efficiency measures and accelerate the follow-up to Action 4 of the Affordable Energy Action Plan, suggesting that “the Commission will explore the possibility of further supporting the EIB Group’s programme for energy efficiency in SMEs, which aims to increase the competitiveness of European SMEs, promote the adoption of energy-efficient and renewable solutions and build climate resilience.”
Source: Excerpt from a statement by FEDARENE and the Coalition for Energy Saving. April 2025.
[1] For this calculation, the total energy consumption of the SMEs analysed in the LEAP 4 SME study was divided by the number of SMEs in the five Member States (see factsheets for each EU country). On average, energy consumption per SME is less than 1 TJ, far from the 10TJ threshold set out in Article 11.
