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Mandatory energy audits in Finland

Mandatory energy audits in Finland

On the 1st January 2015 the new Energy Efficiency Act (1429/2014) in Finland came into force, It obliges large companies to conduct energy audits every four years, the first of which needs to be completed already by 5 December 2015. But what is a ‘large company’ and what do the audits entail? How should one go about conducting such an audit?

The new law brings Finland in line with the European Union’s Energy Efficiency directive (2012/27/EU) of 2012, which aims to achieve the objective of saving 20 % of the EU’s primary energy consumption by 2020 compared to projections. Finland’s own national energy efficiency target, has in accordance been set as an absolute level of final energy consumption of 310 TWh (26.66 Mtoe) by 2020. 

Energy intensive and large industrial and business operations have been identified as key areas where en-ergy efficiency measures should be introduced. In the newly introduced legislation, the government has opted for a stick, rather than a carrot approach: large companies are obliged to conduct audits under the threat of financial penalties. The carrot approach previously introduced for communes and small and medium sized companies, whereby they receive subsidies for conducting energy audits of their operations, is set to continue. 

For whom are energy audits obligatory? 

The Act defines large companies as those that employ over 250 employees or that have a turnover in excess of €50 million and a balance sheet over €43 million. The definition takes foreign subsidiaries into account, but not foreign holding companies. Significantly the company’s energy consumption is not considered at all. 

In some cases companies may be exempt even if they qualify as ‘large companies’. Exemptions may be granted if the company has an ISO 14001 system with a certified energy management system (EnMS). Also exempt are companies that are party to the energy efficiency agreement system and have EnMS systems in use. 

What does the audit entail?

The obligatory audit set out by the Act includes a company energy audit and a site audit. The company energy audit reviews the energy consumption of all the group’s or company’s energy consuming operations: real estate, industrial operations, business operations and transport. In practice the company energy audit can be implemented fairly flexibly. It should nevertheless shed light on the energy consumption levels and its breakdown as well as completed and planned site audits. 

In addition to the company energy audit a more detailed site audit needs to be completed. It should cover 10 % of the company’s entire energy consumption. The site audit can be conducted on real estate targets or industrial targets. If the site audit is conducted on real estate the extent of the audit is according to Table 1. Despite some leeway in the selection of the targets the overriding principle is that targets should be chosen according to the energy consumption and savings potential levels. Audits that were conducted less than 4 years ago can also be taken into consideration. 

Get started early

Due to the tight schedule set out for the first audits to be conducted it is recommended that organizations get started without delay in verifying whether they need to comply with the new Act. If the company is defined as a ‘large company’ it may be exempt according to the earlier specified stipulations. 

If the company however is not exempt it needs to verify whether any audits have been conducted in the last four years and what they entailed. This information can be used to reduce the scope of site audits. The company will nevertheless be required to conduct a company energy audit. 

If no exemptions are applicable and no audits have been conducted in the last four years then a company energy audit and site audit will have to be conducted before 5.12.2015. The company can train and register one of its own employees via the Finnish Energy Authority to conduct the audit. Alternatively it can employ the services of a registered energy auditor to consult in the matter and/or to conduct the audit. 

Author: Jukka Summanen

Contact Jukka Summanen  

Table 1. Site audits conducted on real estate. The table indicates the number of site audits required for varying building and operation site numbers.