In 2023, the European Union took a significant step toward climate leadership by adopting a comprehensive set of proposals aimed at cutting net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. As part of its broader vision to become the world’s first climate-neutral continent by 2050, the EU is placing growing emphasis on efficient energy use as a key strategy to curb global energy consumption and advance its climate goals.
To expedite progress toward this goal, the EU has established the Energy Efficiency Directive (EED), which serves as a regulatory framework that is central to the corporate sustainability agenda. ENGIE Impact’s most recent breakfast webinar, together with ENGIE CertiNergy & Solutions, discussed the latest revisions to the EED, its requirements, and best practices for reducing energy consumption in line with the ISO 50001 standard.
The aim was not just to explain the changes to the EED but to explore ways that companies could use it to their advantage. By turning auditing and monitoring requirements into an actionable roadmap, they can reduce the time, resources, and capital needed for compliance. With only five short years until 2030—the target date for many corporate commitments—it is critical to have high-quality decarbonization roadmaps ready for implementation.
The EED was introduced in 2012 and received a major update in 2023—Directive 2023/1791. The Directive focuses on reducing overall EU energy consumption by 11.7% by 2030 compared to 2020 projections, and chiefly concerns new standards for audits, energy consumption constraints, and energy efficiency targets. It also introduces new obligations based on energy use, summarized as follows:
Compared to the earlier version, it now introduces a series of measures to help accelerate energy efficiency and has strengthened the data collection phase by introducing a different approach, based on energy consumption, for businesses to have an energy management system or conduct an energy audit.
Whereas companies were formerly required to estimate significant energy usages (SEUs), they are now obliged to identify a minimum of three SEUs representing more than 10% of site consumption and perform heat recovery when necessary. There is also a new emphasis on the reliability of the energy audit, such that it includes detailed calculations of investment costs and potential savings from taking the recommended actions. While the new directive might seem onerous, we view it as an opportunity to make genuine, qualitative decarbonization progress.
In parallel with the push for energy efficiency, plans are underway for a global set of EU regulations, such as the Blue Deal, to promote a sustainable water policy for Europe that would, among others, monitor water consumption and encourage reductions. On the heels of severe droughts in the summer of 2022, the French government announced local incentives and coercive measures to incite businesses to manage and reduce water consumption.
The main coercive measure is the potential to oblige organizations to reduce their water consumption by 25% in case of severe drought. Enforcement would turn water savings into a “right to produce” issue, much more than is the case for energy savings. Local water agencies in France are therefore advising companies to monitor their consumption as soon as possible, lest they be ill-prepared when water constraints hit.
The message we want to convey here is that water and energy management have much in common. Integrating water and energy audits and strategies enables faster deployment of efficiency initiatives that save time, money, and resources.
Tackling energy and water usage starts with understanding where and how resources are consumed. ENGIE’s approach to SEUs follows a proven three-step model:
Because financing is always an issue, it is advisable to find support and subsidies. In France, water agencies offer generous subsidies—often more than energy grants. We recommend monitoring water during energy audits, and vice versa. This strategy can benefit audit financing and help launch pilot programs in subsidy-rich regions. This is key, as not every country subsidizes efficiency efforts.
The best practice is to find which countries subsidize either water or energy monitoring plans and then use sites in those countries as pilots to create the global policy. In those countries with fewer subsidies available, the approach would be to leverage the structuring work that has been done elsewhere, so less effort and fewer resources would have to be spent to deploy or scale up the program.
Having noted the advantages of addressing energy and water consumption simultaneously, the holistic approach we are advocating also defines a methodology to consider carbon topics at the same time. ENGIE Impact’s Net Zero Factory (NZF) is a proprietary method to build site decarbonization pathways based on data collection and site auditing. It takes a holistic, technology-agnostic approach to future-proofing industrial sites and delivers techno-economic optimization of the decarbonization technologies that best fit specific sites.
It starts by quantifying business-as-usual (BAU) and then builds scenarios (electrification, biomethane, etc.) to compare against it. The NZF approach includes potential layers of financing, project management, and stakeholder management. Its four-step approach to build a site-level decarbonization pathway has much in common with ISO 50001:
As the NZF is forward-looking, questions may arise as to how the approach addresses volatile energy prices. ENGIE Group produces in-depth market forecasts on the future development of energy prices based on projections of the EU strategy. The NZF walks companies through various price scenarios for each site strategy. There are also ways to remove price volatility, for instance, with business models in which the ENGIE Group would invest in some of the assets to lower exposure and the financial risk of price volatility.
As the Net Zero Factory approach and ISO 50001 contain many similar elements, an ISO 50001 audit can be bundled with either a NZF single-site decarbonization roadmap or a NZF multi-site, multi-country roadmap, according to the client’s needs.
NZF Navigator
Designed for businesses with straightforward operations across multiple sites, NZF Navigator focuses on a standard list of site-level solutions for multiple sites and geographies. It is designed to compare different sites and different types of projects. The main deliverables are:
Comparative assessment facilitates economies of scale by identifying synergies between sites and methodologies that could be replicated from one site to another. Why is this important? Because in France, for instance, there is a strong subsidies landscape. A company can start with a subsidized pilot and proof of concept in France. Once complete, it can be replicated elsewhere, which typically makes the roll-out less expensive.
NZF Expander
For more complex, energy-intensive facilities, the Expander approach conducts a site audit and creates an optimized decarbonization pathway using ENGIE’s proprietary tool, called
Prosumer. This tool identifies the best techno-economic energy mix depending on inputs related to KPIs such as total cost of ownership or carbon savings, as well as the cost of energy per ton of manufactured product at the site. The main deliverables are:
Available technologies span electrification, hydrogen, biomass, and renewable gas, each evaluated by site location, energy profile, and local conditions.
As the EU strengthens energy and water regulations, businesses have a choice: merely cover the bases to meet compliance obligations or proactively use those obligations as strategic levers. The approach laid out here shows that by auditing consumption, identifying SEUs and water usage, and then implementing robust performance monitoring, organizations can turn regulatory pressure into operational excellence.
To this end, we encourage companies to follow the lead of the Energy Efficiency Directive. For regulatory purposes, it will catalyze projects that will cost time, resources and capital. But by bundling the analysis of energy, water, and carbon, companies can significantly reduce those costs while accelerating the process. Auditing water, for instance, paves the way to managing energy. Taking advantage of synergies between them, a decarbonization roadmap can be created at one site and replicated at other sites. Having clear roadmaps can provide a competitive advantage by controlling costs for energy, water, and carbon.
ISO 50001 provides a roadmap to spur implementation. Some implementation initiatives are obvious and some are more complex, but the key in every case is to have a robust monitoring system to prioritize investments and focus on where they’re needed. But above all, it is important to act now if 2025 intentions are going to achieve 2030 targets.
Let's work together to decarbonize your organization.
