1. Primary Energy Efficiency Law

Serbia is a candidate country for the accession to the EU and is in the process of harmonising its legislation with the EU acquis. In 2013, Serbia adopted the Law on the Efficient Use of Energy1 ("Law"), which came into force on 1 January 2014. It is the first systematic legislative act regulating energy efficiency in Serbia.

The Law and its accompanying bylaws implement: (i) Directive 2010/30/EU on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products; (ii) Directive 2006/32/EC on energy end-use efficiency and energy services; and (iii) Directive 2010/31/EU on the energy performance of buildings.

However, the Law does not fully transpose the most recent Directive 2012/27/EU on energy efficiency. The Third National Energy Efficiency Action Plan2 ("NEEAP") provides that the Directive 2012/27/EU should be fully transposed by the end of 2017.

The Ministry of Mining and Energy ("Ministry") is responsible for energy efficiency and further implementation of the Law.

Comparison

Directive 2012/27/EU is only partially implemented by the Law. Specifically, the Law transposes Article 8 of Directive 2012/27/EU concerning energy audits and energy management systems and provisions of the Energy Labelling Directive (Directive 2010/30/EU) and the Energy Services Directive (Directive 2006/32/EC).

In particular, the Law regulates the following: (i) the efficient use of energy in the sectors of production, transfer, distribution and consumption of energy; (ii) energy efficiency policies; (iii) energy management systems; (iv) energy efficiency labelling; (v) the minimal energy efficiency requirements in production, transfer and distribution of electric and heat energy and the delivery of natural gas; (vi) financing, incentives and other energy efficiency measures; and (vii) other issues related to energy efficiency rights and the obligations of legal and natural persons related thereto.

The main programmes that have been implemented are the following:

National Energy Efficiency Action Plans

The First NEEAP for 2010-2012 provided for energy reduction of one point five percent (1.5%)

(0.1254 Mtoe) during that period, and set the overall energy reduction goal at nine percent (9%) by 2018 (0.7524 Mtoe). The First NEEAP for 2010-2012 was realised by ninety three point three percent (93.3%)

(i.e. energy reduction was 0.117 Mtoe).

The Second NEEAP3 for 2013-2015  provided for energy reduction of three point five percent (3.5%) (0.2952 Mtoe) during that period, and affirmed the overall energy reduction goal of nine percent (9%) by 2018 (i.e. 0.7524 Mtoe). The targeted energy reduction of three point five percent (3.5%) was planned to be allocated between households (twenty three point four percent (23.4%) or 0.0693 Mtoe), the public and commercial sector (sixteen point eight percent (16.8%) or 0.0499 Mtoe), industry (twenty seven point seven percent (27.7%) or 0.081 Mtoe) and the transportation sector (thirty two point one percent (32.1%)

or 0.095 Mtoe). Currently available information indicates that for the period 2010-2014 the total energy reduction was 0.3083 Mtoe.

The Third NEEAP for 2016-2018 provides for an energy reduction of four point seven percent (4.7%) (0.3824 Mtoe). The Third NEEAP is cautiously optimistic about achieving the overall aim of 0.7524 Mtoe energy reduction by 2018, noting that up to the end of 2014 approximately fifty percent (50%) of the targeted reduction had been achieved.

Rulebook on the Minimal Criteria for Energy Efficiency in Public Procurement of Goods4

Pursuant to Article 68 of the Law, all public bodies and public companies are required to take measures to improve energy efficiency in their objectives. This primarily includes measures that make the most savings in the shortest period of time, and making employees aware of energy efficiency measures.

The Law further provides an obligation for public bodies to take into account energy efficiency concerns in

public procurement proceedings. Energy efficiency concerns should be taken into account especially when preparing technical specifications of goods/services or works, tender documentation and criteria for selection of the best bidder.

The Rulebook on the Minimal Criteria for Energy Efficiency in Public Procurement of Goods further elaborates the energy efficiency requirements in public procurement for specific types of goods, office and

IT equipment, refrigerators, air conditioners and lightning.

The Law on Efficient Use of Energy

-Information for consumers and individual metering

Companies that distribute and supply electricity and heat energy are required to inform customers at least once per month, together with energy bills, about: (i) the amount of energy used; (ii) the average monthly price of energy; (iii) the price for the used energy; (iv) the total monthly amounts of used energy in the last twelve (12) months; (iv) the consumption in the previous month and the same month of last year; (v) the average amount of energy used by other customers from the same category; (vi) the ways customers can obtain more information about available energy efficiency measures; and (vii) the list of energy efficiency

measure that consumers may take, as well as other information which may be of relevance for rational energy use.

The Law further provides for the installation of individual meters and individual metering where possible. In this respect, it imposes obligations on companies active in the distribution of electricity and natural gas to install individual meters that provide information to consumers about the actual amounts of energy used, to the extent that this is technically possible, financially justified and proportionate. With regards to heat energy, companies active in the distribution of heat energy are under the obligation to make available

technical documentation and to install individual meters upon request by investors or owners of property. Investors must provide individual meters for heat energy in every newly constructed building.

-Energy audits

The Law distinguishes between:

-energy audits, that are used for obtaining adequate knowledge of the existing energy consumption profile, identifying and quantifying cost-effective energy savings opportunities and reporting findings; and

-energy revisions, which has the aim of verifying the results of energy audits.

Energy audits and energy revisions are performed by authorised energy advisors, which can be either legal or natural persons registered in the Registry of Energy Advisors with the Ministry.

The Law provides for energy audits at least once every ten (10) years for:

-objects, or parts thereof, of more than 500 m² used by government and provincial bodies, municipalities with populations of more than 20,000, and other public bodies that use objects in public ownership; and

-objects, or parts thereof, that are categorised in one of the energy grades.

Further, an energy audit is required in case objects, or parts thereof, change the purpose of their use,

change ownership, or if they are intended for lease. The seller or lessor must provide the potential buyer or lessee with an energy audit, not older than ten (10) years, for the respective object.

"Objects" are broadly defined as any structure connected to the ground that represents a physical, functional and technical unit (for instance, all types of buildings, external and internal networks and installations, public infrastructure, industrial, agricultural and other commercial facilities, sports facilities, etc.).

Although the legal requirement for energy audits is set broadly, there are no fines for non-compliance with

the above requirements. It appears the only consequence is that entities cannot apply for funding from the Energy Efficiency Fund if they do not prepare and submit the appropriate energy audit.

-Energy Efficiency Fund

Serbia has established an Energy Efficiency Fund ("EEF") for financing energy efficiency measures. The users of the EEF can be any natural or legal person with a registered seat in Serbia, and local municipalities. Each year the government allocates funds for the EEF and determines the programmes

and measures that will be financed. In 2016, it only allocated funds for local municipalities to introduce and finance energy efficiency measures.

-Monitoring efficiency levels in new energy generation capacities

Every new or revitalised facility for the generation, transportation and distribution of energy should conform to minimal energy efficiency requirements. A request for issuance of an energy permit for energy

generation, transportation and distribution facilities should include a special report on energy efficiency that, inter alia, proves that minimal energy efficiency requirements for the respective facility are fulfilled.

Comparison

The Law together with the accompanying bylaws provides a first comprehensive energy efficiency legislative framework in Serbia. The Law partially transposes Directive 2012/27/EU and full implementation is expected in the future. The NEEAPs set out the goal of reducing energy consumption by at least nine percent (9%) by 2018 (0.7524 Mtoe). The Law provides for a general obligation to introduce individual metering and payment for the actual consumption of energy. Further, the Energy Efficiency Fund was established to finance energy efficiency measures for all legal persons, including SMEs, with a registered seat in Serbia. However, funds are currently available only to local municipalities. A special report on energy efficiency is required for procurement of energy permits for each new energy generation facility.

Law on Efficient Use of Energy

The Law introduced an energy management system for companies based on the levels of total annual energy consumption; the exact levels were left to be further defined by the Government.

Decree on Determining Annual Energy Consumption Limits for Companies that are Subject to Energy Management System, Annual Energy Savings Plans and the Form of Energy Consumption Notification5  ("Decree on Annual Energy Consumption

Limits")

The Decree on Annual Energy Consumption Limits was adopted in 2016 and set energy management obligations for the following entities (entities subject to an energy management system):

-companies with their main business activity in the production sector and with (i) annual energy consumption of more than 2,500 toe in at least one business unit; or (ii) annual energy consumption of more than 1,000 toe together in all owned business units;

-companies with their main business activity in trade and services and with annual energy consumption of more than 1,000 toe in at least one business unit; and

-government and provincial authorities, local municipalities with more than 20,000 inhabitants, and other public bodies that use objects in public ownership.

The energy management obligations of the above entities are to:

-achieve the prescribed annual energy consumption savings;

-appoint the appropriate number of energy managers and inform the Ministry thereof;

-adopt the Energy Efficiency Plan and send it to the Ministry upon request;

-fulfil measures from the Energy Efficiency Plan;

-send annual reports on the fulfilment of the Energy Efficiency Plan to the Ministry; and

-perform energy audits at least once every five (5) years, unless specifically provided otherwise.

The Decree on Annual Energy Consumption Limits set a one percent (1%) annual energy savings target

for all entities subject to an energy management system.

Rulebook on Model Annual Report on Realised Energy Savings6

Entities subject to an energy management system must send annual reports to the Ministry on realised energy savings.

Comparison

Serbian legislation implemented a broad obligation on all companies in the production, trade and services sectors, with annual energy consumption higher than the prescribed threshold, to make one percent (1%) annual energy savings. This may therefore include energy distributors and retail energy sales companies if their annual energy consumption is above the prescribed thresholds. Yearly reports on realised energy savings should be sent to the Ministry.

Law on Efficient Use of Energy

The Law provides for a mandatory energy audit at least once every five (5) years for all entities subject to the energy management system explained in Section 3 above.

Energy audits can be performed only by authorised energy advisors.

An energy advisor can be a natural or legal person registered in the Registry of Energy Advisors before the Ministry.

The energy advisor should send information to the Ministry on each performed energy audit.

An energy audit for entities subject to an energy management system may only be performed by an energy advisor that is a legal entity which

-has as a main business activity project engineering, professional construction supervision, technical advisory, scientific research, technical science research, scientific and professional activities in the energy sector

-has at least two employees with an energy advisor license;

-is not convicted of a commercial offence, and

-is registered in the Registry of Energy Advisors.

Natural persons must obtain an energy advisor license which is issued by the Ministry. A license for energy

advisor is issued to a natural person who

-passed an examination for energy advisor;

-holds an appropriate master degree in technical-technological sciences and has at least three (3) years of professional working experience;

-is not convicted of a criminal offence against property or commerce; and

-paid the appropriate fee.

A license for energy advisor is issued for a period of three (3) years and may be further extended.

The Ministry keeps a registry of licensed energy advisors.

The provisions on energy advisors have not yet been implemented in practice. It is expected that the Ministry will soon adopt the appropriate bylaws, such as the bylaw on the content of the energy audit report; methodology for performance of an energy audit and conditions and manner of energy revision; and categories of data, deadlines and the form for submitting the information on performed energy audits and energy revisions.

Comparison

The Law introduced energy audits that can be conducted only by authorised energy advisors. The obligation to perform energy audits is set broadly and covers: (i) all companies in the production, trade and services sectors with an annual energy consumption higher than the prescribed thresholds; and (ii) government and provincial authorities, and local municipalities with more than 20,000 inhabitants. However, the accompanying bylaws which should further implement the conditions and requirements for authorised energy advisors are yet to be adopted.

There are several strategies approved by the government that set various energy savings goals:

Energy Development Strategy for 2025, with Projections for 2030

The Energy Development Strategy set the following strategic goals for Serbia with respect to the efficient use of energy:

-consistent application of the Law;

-adoption and implementation of NEEAPs;

-defining national energy savings goals (in total and in sectors) and monitoring implementation;

-use of combined electricity and heat generation in industry;

-introduction of energy management systems;

-capacity building in energy statistics; and

-public information and education.

The priority actions according to the Energy Development Strategy are:

-Energy reconstruction in the buildings sector. Namely, Serbia largely transposed Directive 2010/31/EU on the Energy Performance of Buildings by the Law on Construction and Development7 , the Rulebook on Energy Efficiency of Buildings8 , the Rulebook on Conditions, Content and Manner of Issuance of Certificates of Energy Performance of Buildings9 , the Rulebook for Control of Heating Systems10 , and the Rulebook for Control of Air Conditioning Systems11. Accordingly, all new and reconstructed buildings should comply with energy efficiency requirements.

-Introduction of energy management systems in the public sector.

The main conditions for energy efficiency identified by the Energy Development Strategy are creation of an energy market and market pricing of energy. It specifically singled out that the price of electricity should reach a level that will discourage its irrational use, especially by using it for heating purposes. Further, heating energy should be paid for based upon its actual use and priced accordingly, so that it is used more efficiently.

The main conditions for energy efficiency identified by the Energy Development Strategy are creation of an energy market and market pricing of energy. It specifically singled out that the price of electricity should reach a level that will discourage its irrational use, especially by using it for heating purposes. Further, heating energy should be paid for based upon its actual use and priced accordingly, so that it is used more efficiently.

Third NEEAP

The aim of the Third NEEAP for 2016-2018 is to achieve energy reduction in this period of 0.3824 Mtoe, with the ultimate goal of reaching nine percent (9%) energy reduction in the 2010-2018 period (0.7524Mtoe in total).

The following energy efficiency measures have been planned in different sectors:

-Households

-introduction of energy efficiency measures in buildings;

-new rules for planning and construction of buildings, energy performance of buildings and certification; and

-promoting the use of energy efficient lighting and household appliances

-Public and commercial sector

-introduction of energy efficiency measures in public and commercial buildings;

-new rules for planning and construction of buildings, energy performance of buildings and certification;

-modernisation of public lightning system in cities and municipalities;

-introduction of energy management system in public and commercial sector;

-energy efficiency criteria in public procurement proceedings;

-incentivised tariffs for combined production of electricity and heating; and

-regular controls of heating and air conditioning systems.

-Industry

-introduction of energy management system for large energy users;

-introduction of energy efficiency measures;

-incentivised tariffs for combined production of electricity and heating; and

-minimal energy efficiency requirements for new and reconstructed facilities for electricity and heat generation and combined electricity and heat generation

-Transport

-implementation of Regulation EC 443/2009 on setting emission performance standards for new passenger cars;

-promoting eco driving and car sharing schemes;

-mobility management (i.e. measures aimed at energy efficient use of parking spaces, increasing the use of non-motor vehicles in transport, improving infrastructure for the greater use of bicycles);

-improving energy efficiency in public transportation of passengers;

-improving energy efficiency in transportation of goods;

-introduction of EU standards regarding emissions of imported used motor vehicles;

-introduction of efficient tyres for motor vehicles;

-improving the quality of regular annual technical inspections of motor vehicles;

-modernisation of vehicles for fulfilment of technical requirements for domestic and international transport;

-marking and monitoring the quality of fuels; and

-mandatory replacement of summer tyres.

-District heating system

-reconstruction of the heat energy distribution system;

-reconstruction and modernisation of heating plants;

-controlling  the burning of gaseous, liquid and solid fuels in heating plants;

-controlling the distribution of heat energy;

-reconstruction of the Nikola Tesla thermal power plant; and

-minimal energy efficiency requirements for new and reconstructed facilities for electricity and heat generation and combined electricity and heat generation.

-Power system

-improving the efficiency of boilers in thermal power plants;

-coal quality management system;

-improving the efficiency of steam turbines in thermal power plants;

-reducing the energy consumption in thermal power plants;

-reconfiguration of the distribution network;

-voltage regulation of the distribution network;

-improvement of the distribution network;

-installation of smart meters; and

-minimal energy efficiency requirements for new and reconstructed facilities for electricity and heat generation and combined electricity and heat generation

Annual Energy Savings

As mentioned in Section 3 above, government and provincial authorities and local municipalities with more than 20,000 inhabitants must reduce their annual energy consumption by one percent (1%).

This energy savings obligation applies to objects that consume more than 1,000 toe annually (in the education, science, culture and health sectors), more than 2,500 toe annually (in the transportation, energy, road and communal services sectors), or are larger than 2,000 m² (objects belonging to government and provincial authorities).

Comparison

As Serbia is not an EU Member State, it does not have the obligation to adhere to the EU's energy savings strategies. Articles 4 and 5 of Directive 2012/27/EU appear not to have been transposed. However, Serbia has its own energy saving targets and measures. Its plan is to reduce energy consumption by nine percent (9%) (0.7524 Mtoe) by 2018 and introduced various energy efficiency measures to that end.

The main goal of the NEEAPs is to reduce energy consumption by nine percent (9%) by 2019

(0.7524 Mtoe).

Apart from energy efficiency measures described in the above Sections, Serbia has also introduced energy labelling obligations pursuant to Directive 2010/30/EU and supports the public sector in taking up energy services (ESCO) pursuant to Article 18 of Directive 2012/27/EU.

Energy labelling

The Law introduced an obligation to label certain products that affect energy consumption and indicate their energy consumption and energy efficiency.

The Decree on Labelling of Energy-Related Products12 provides for energy labelling of a number of products. Special rulebooks have been adopted on energy efficiency labelling of household cooling appliances13, televisions14, washing machines15, dish washers16, electric ovens17, air conditioners18, electric bulbs and lamps19.

Energy services

The Law defines energy services as services that lead to a verifiable and measurable increase in energy efficiency of objects, technical systems, production processes, private and public services and/or primary energy savings. Energy services can be performed by legal entities or natural persons, on the basis of a written agreement.

The Ministry has issued a Rulebook on Model Energy Service Contracts for the Implementation of Energy Efficiency when Users are from the Public Sector20. It provides for two model agreements – one related to energy efficiency of public buildings and the other for public lightning.

Comparison

As Serbia is not an EU Member State, it does not have an obligation to adhere to the EU's indicative energy saving targets. Nevertheless, Serbian NEEAPs aim to cut energy consumption by nine percent (9%) by 2019 (0.7524 Mtoe).

2. Specific Provisions of the Law

3. Obligations

4. Mandatory Audit of Large Industry

5. Strategies

6. Targets

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