1. Primary Energy Efficiency Law

The State of Bosnia and Herzegovina ("BiH") consists of two separate entities (i) the Federation of Bosnia and Herzegovina ("FBiH"); and (ii) Republic of Srpska ("RS"), and a special autonomous district under direct sovereignty of the state, Brčko District ("BD"). FBiH is further divided into ten Cantons. In each of these parts, different legal regimes essentially apply. However, certain matters are regulated by laws enacted at the State level and (where applicable), in all parts of the country. Furthermore, in many cases relevant legislation regulating a particular matter is harmonised between these state entities. Nonetheless, differences may occur in the application and interpretation by different entities' courts and institutions.

In March 2016, BiH introduced the National Renewable Energy Action Plan ("NREAP"). This was an obligation assumed by BiH through the enactment of the Decision on Ratification of the Treaty Establishing the Energy Community in 2006. The NREAP governs and defines: (i) the targets in consumption of renewable energy sources ("RES"); (ii) measures for achieving these targets; and (iii) assessment of contributions of use of RES as well as contributions expected from energy efficiency measures. NREAP BiH is harmonised with the strategic and planning documents of FBiH, RS, and BD.

BiH also initiated the financing of the Bosnia Project of Energy Efficiency ("BEEP") with credit assets of the International Development Association (IDA). The project was initiated in order to ensure the economic viability of energy efficiency projects and to contribute to the process of accession to the European Union.

A financing agreement worth USD 32 million was signed, the funds from which are intended to be used for renovations in the public sector. The Federal Ministry of Physical Planning, through its implementation unit, is responsible for the preparation, coordination, management and implementation of the Project in the FBiH. In RS, the project is implemented by the Ministry for Special Planning, Construction and Ecology of RS.

1.1 FBiH

In the beginning of February 2017, the FBiH enacted the Law on Energy Efficiency ("FBiH Energy Efficiency Law"), which had been in the process of adoption since 2013. The FBiH Energy Efficiency Law entered into force on 1 April 2017. The main purpose of the FBiH Energy Efficiency Law is to: (i) reduce negative impacts on the environment; (ii) ensure a more secure energy supply; (iii) meet the energy needs of end-consumers; and (iv) fulfil international obligations assumed by BiH in terms of reducing emissions of greenhouse gases through the use of energy efficiency measures.

The FBiH Energy Efficiency Law stipulates that indicative goals in energy efficiency will be determined by the Action Plan for Energy Efficiency (which is yet to be adopted as of the date of publication of this Guide). Also, the FBiH Energy Efficiency Law further requires that the Cantonal authorities in FBiH enact energy efficiency plans at the Cantonal level. Such plans will be relied upon for guidance on programmes for energy efficiency to be adopted by the local government authorities. The failure of (i) large consumers; (ii) operators of energy distribution systems; (iii) suppliers of energy; or (iv) natural persons and legal entities authorised to perform energy audits to comply with the FBiH Energy Efficiency Law may result in financial penalties.

In FBiH, energy efficiency is also promoted in the Law on Use of Renewable Energy and Efficient Cogeneration ("FBiH Law on RES"). Specifically, the FBiH Law on RES introduces certain measures to promote the use of renewable energy sources, while also introducing penalties for those who fail to follow the standards.

In 2010, the Federal Ministry of Spatial Planning adopted the Rulebook on energy certification which prescribes, inter alia, the obligations for energy certification, the methodology for energy certification, and those constructions and buildings which are obliged to possess these energy certificates. The Rulebook was adopted as a bylaw to the Law on Spatial Planning and Use of the Land in Federation of Bosnia and Herzegovina, but it has not been effectively applied in practice.

Also, in May 2014, the FBiH enacted the Action Plan of FBiH for the Use of Renewable Energy Sources ("APOEF"). APOEF sets out the policies, plans and indicative goals for the use of energy from RES, including: (i) in final gross consumption of energy; (ii) cooling and heating energy; and (iii) transport energy. APOEF also outlines regulatory measures for achieving energy efficiency and energy savings by end-users, as well as other measures for the fulfilment of these energy efficiency goals.

1.2 RS

The RS Law on Energy Efficiency ("RS Law on Energy Efficiency") entered into force in 2013. The main purpose of the RS Law on Energy Efficiency is: (i) the regulation of energy efficiency in final consumption; (ii) adoption of plans for improving energy efficiency and their implementation; (iii) the organisation of activities to improve energy efficiency; (iv) measures to improve energy efficiency; and (v) means for financing energy efficiency.

In addition, in February 2012, RS introduced the Energy Strategy of Republika Srpska up to 2030 ("RS Energy Strategy"). The RS Energy Strategy includes a set of measures and goals for the implementation of the governmental policy of RS in the energy sector. The Strategy is based upon principles of global trends in the energy sector and specific EU legislative measures in the energy sector. The Strategy covers the development of the energy sector based upon the principal of sustainable growth (by relying upon domestic resources and endeavouring to use RES and incentivising the introduction of energy efficiency measures).

1.3 BD

Brčko District does not have specific laws on energy efficiency. However, the promotion of energy efficiency is envisaged by the Law on Electric Energy ("BD Law on Electric Energy"). According to the BD Law on Electric Energy, the Government of BD is responsible for conducting an energy policy that promotes efficient energy use and the use of RES.

Comparison

Although BiH is not an EU Member State, by signing the Stabilisation and Association Agreement, it undertook to harmonise its legislation with that of the EU. Even though the local legislation has been to a large extent harmonised with the legislation of the EU, in terms of energy efficiency this process is still ongoing. By signing the Energy Community Treaty, BiH also undertook certain obligations. In this respect, RES action plans at the entity as well as State levels have been adopted, which, inter alia, introduce certain measures for energy efficiency.

The goal of the BEEP project, which is implemented throughout BiH, is to demonstrate the benefits of improving energy efficiency in public sector facilities and to support the development of flexible models for financing energy efficiency. It includes, (but is not limited to), investments in energy efficiency in public sector facilities, support for the development of flexible funding mechanisms, insurance that the project is managed efficiently by the project implementation unit and other related measures.

In RS, the first legal framework for application of energy efficiency measures was the RS Law on Energy, which prescribes the following:

-ensuring cooperation between consumers, manufacturers, and energy suppliers, as well as the public services sector and local governments, in order to reach the required level of energy efficiency;

-the realisation of the given levels for increasing energy efficiency by reducing energy losses, reducing energy consumption by introducing new technological solutions in different sectors (public sector and public services sector, construction, agriculture, industry, traffic, etc.);

-the consumers' education and awareness regarding the necessity of energy consumption reduction (savings) and measures to reduce energy consumption; and

-the establishment of a system of verification and compulsory device marking with the energy class rating as well as the certification of buildings in terms of their energy characteristics.

The FBiH Energy Efficiency Law prescribes the following:

-Indicative goals of FBiH in terms of energy efficiency improvements must be determined by the Action Plan for Energy Efficiency. Furthermore, since FBiH is divided into Cantons, each Canton must enact a plan of energy efficiency which will further be used as a baseline for programmes of energy efficiency improvement enacted at the local government level.

-As for the measures for energy efficiency, the authorities and institutions in the public sector must: (i) perform annual analyses of energy consumption; (ii) perform energy audits and obtain the certificate on energy efficiency; (iii) implement the measures for energy efficiency and adopt the programmes for improvement of energy efficiency; and (iv) introduce and implement criteria for energy efficiency in performing public procurement procedures for goods and services.

-Use of RES is considered as an energy efficiency measure and in this respect legal and natural persons that use RES may benefit from funds intended for energy efficiency projects.

-Advertisements for sale or rent of buildings or a part thereof must include an indicator of the energy characteristics of such space. For new buildings or change of intended use of old ones, investors must have energy efficiency certificates.

Energy audits must be performed for all end-users in the public utility service sector, (including households, commercial consumers and small and medium sized industrial consumers). Also, public administration, local government units, public companies, etc., which use more than 500 m² of usable surface must perform energy audits of their spaces. The FBiH Energy Efficiency Law further prescribes the conditions for such energy audits, the types of authorisations in this respect, and the obligations of legal and natural persons in performing energy audits. Further rules will be set out in the relevant bylaws yet to be adopted.

Also, the FBiH Law on Use of RES and effective cogeneration prescribes the following stimulative measures for use of RES in electricity production:

-priority in connecting to the grid;

-time advantage in dispatching the electricity produced from RES and efficient cogeneration;

-producers of energy who use RES and have the status of a qualified producer have certain advantages including time advantage in dispatching power, and an advantage in delivering electrical power produced to those facilities which have a designated power of less than 150 kW, without the requirement to report to the relevant regulator; and

-producers of electrical energy which use RES and have the status of privileged producers, have the right to conclude a contract with the operator for renewable energy sources and effective cogeneration which shall provide them a secure redemption of produced energy on the basis of granted prices (feed in tariffs) for a period of twelve (12) years.

In addition, laws regulating special planning and building or use of land (both in FBiH and RS) contain provisions which further emphasise energy efficiency measures in construction projects. FBiH went further to adopt the necessary bylaws on certain technical requirements, in order to enhance the energy efficiency requirements, such as a rulebook for technical requirements of doors and windows, ventilation systems, cooling and heating systems, rulebook on energy certification of the buildings, etc.

Comparison

In BiH there are no clear indicators as to what percentage of energy savings should be accomplished by distributors, or what percentage of efficient renovations must be performed (as opposed to those set out in the EU legislation). Also, although certain requirements are prescribed by the applicable laws and bylaws, these are not adequately applied in practice. However, the global indicators of energy savings in BiH and entity level are set out in the action plans for RES.

Since BiH is not a member of the European Union, the obligations set out in the Directive No. 2012/27/EU are not applicable to BiH.

Although certain energy efficiency measures are introduced and elaborated in the national Action Plan of BiH for RES, these are not obligatory. On the other hand, energy efficiency laws in both entities impose certain obligations. Still, there are no strict obligations on (for example) the percentage of energy efficiency to be achieved or a strict percentage for the renovation of buildings to be performed.

The following obligations are stipulated in the FBiH Energy Efficiency Law:

-enactment of the programme for enhancement of energy efficiency, delivery of the programme to the supervising authority, and delivery of data on energy consumption (obligation of the large consumers); and

-yearly reports to be delivered to the Federal Ministry of Energy, Mining and Industry, offer of energy services to the end-consumers, including energy services and energy audits; installation of individual devices for measurement of  energy consumption to end-consumers (obligation of the operator of distribution systems and suppliers of energy).

The following obligations are established by the RS Law on Energy Efficiency:

-enactment of the consumer plan and providing to the Ministry of Industry, Energy and Mining and the Fund for Environmental Protection of and Energy Efficiency, the yearly plan on realisation of the consumer plan (obligation of the large consumers);

-implementation of the energy management system; and

-applying measures for improving energy efficiency.

Comparison

Since BiH is not a member of the European Union, the obligations set out in Directive No. 2012/27/EU do not apply in BiH. Although certain energy efficiency measures are introduced and elaborated in the national action plans for renewable energy sources, these are not obligatory. Additionally, the entity laws on energy efficiency are not yet fully implemented, especially in FBiH where the bylaws are still to be enacted.

There are no mandatory energy audits required by the applicable legislation in BiH or action plans for RES adopted thus far. However, Article 22 of the RS Energy Efficiency Law states that suppliers of electricity must, at least once a year, inform their customers about the effects of energy consumption on the environment and to educate and guide the consumer to use energy more rationally and efficiently. The information must contain, inter alia, information on the Fund for Environmental Protection of and Energy Efficiency, web sites with information on measures for the improvement of energy efficiency, products that are energy efficient and other similar measures.

There is also a system of inspection prescribed by RS Law on Energy Efficiency. Specifically, these inspections are carried out by the Republic Administration of Inspection, through the Republic Inspector. This Inspector has the right to, inter alia, ban the flow of products without the proper energy efficiency markings or those that lack required technical documentation. Moreover, the Inspector has the right to impose fines in case of failure to abide by these obligations.

The FBiH Energy Efficiency Law addresses mandatory energy audits and also provides more details as to which entities must perform such audits, authorities and obligations of legal and natural persons performing the audits, type of authorities, requirements for qualified persons to perform the audits, etc. According to the FBiH Energy Efficiency Law, the energy audit of all end-users in the public utility service sector, (including households, commercial consumers and small and medium-sized industrial consumers) must be performed exclusively based upon the rules of the profession in an objective and independent manner. There is also a system of inspection in place, whereby the application of the provisions of the FBiH Energy Efficiency Law is to be confirmed.

Comparison

A mandatory energy audit system currently exists only in FBiH through the FBiH Energy Efficiency Law. However, it is still unclear how this system of mandatory audits will actually function in practice, since further enacting bylaws are necessary. Also, in both entities there is a system of inspections in place, which in general needs to ensure the application of the provisions of these laws.

BiH does not have a national energy efficiency action plan in place. However, certain energy efficiency measures are addressed in the NREAP. The national indicative goal of energy savings for BiH is at least nine percent (9%) of the final domestic consumption for the period until 2018. In this respect, the NREAP foresees that the energy savings goal can be achieved by introducing energy efficiency measures in the following sectors: (i) residential; (ii) commercial and services; and (iii) industry and transport. In the residential sector (which is the largest individual segment of the baseline net final energy consumption in BiH), the following measures are contemplated:

-minimum energy efficiency standards for energy powered household devices;

-reconstruction of existing residential buildings and private houses;

-energy efficient construction of new buildings;

-energy efficient heating systems;

-mandatory distribution and calculation of heating costs in residential buildings and other buildings, in line with the actual consumption;

-domestic production of renewable sources; and

-introduction of "green" public procurement procedures.

In connection with the commercial sector and services, the following energy efficiency measures would apply:

-energy efficient use of electric power in commercial / public buildings;

-energy efficient HVAC systems in existing and newly built energy efficient and passive commercial and public buildings;

-energy efficient reconstruction of existing buildings and sustainable construction of new buildings;

-introduction of energy management systems;

-integrated generation of energy from renewable sources;

-integrated cogeneration/three-generation systems;

-the "Energy Efficiency in Water Supply Networks" Programme; and

-energy efficient lights.

The Energy Strategy of RS also introduces certain energy efficiency measures and future proposals. It states that attention to energy efficiency should be paid in the following sectors due to the fact that the greatest possible impact could be achieved therefrom: (i) direct energy consumption; (ii) buildings; and (iii) industry and transport. The building sector is presumed to be particularly important in energy consumption because it accounts for more than fifty percent (50%) of the total final energy consumption in the RS, (a result of increases in consumption corresponding to overall increased standards of living). The measures introduced here are:

-raising the quality of construction, quality design of energy concepts;

-the construction of modern low-energy buildings;

-modernisation and energy renovation of existing buildings;

-increasing the standard and comfort in buildings;

-reduction of maintenance costs through the lifetime of buildings;

-use of innovative technologies and solutions;

-development of an integrated approach to design;

-long-term approach to the analysis of the building, taking into consideration its entire lifetime; and

-reducing energy consumption and the protection of environment.

To achieve the planned savings in the building sector by 2030, it is estimated that 136,960 old housing units or a total of 12.25 million m² of surface area must be energy renovated in BiH. Thus, the needed heating energy in buildings would be reduced by sixty percent (60%) at each energy renovation, primarily due to increased thermal protection and the implementation of more efficient technical systems in buildings.

Furthermore, the RS Energy Efficiency Law stipulates that local governments that have more than 20,000 inhabitants must adopt its Energy Efficiency Action Plan, which is aligned with the RS Energy Efficiency Action Plan. The RS Energy Efficiency Action Plan is adopted for a period of three (3) years and includes the following:

-assessment of energy efficiency in the period immediately prior to the adoption of the Action Plan;

-measures to improve energy efficiency;

-indicative targets for energy saving;

-time frame for implementation of measures for achieving goals; and

-assessment of funds required for the implementation of the Action Plan.

FBiH as well as BiH does not have an energy efficiency action plan in place. However, energy efficiency measures, (i.e. their contribution to the energy savings as an overall goal), are discussed in the APOEF.

Specifically, the APOEF provides the same goal of nine percent (9%) of energy savings by 2018 for FBiH (as envisaged for BiH). Also the same sectors and same measures as those prescribed by NREAP are also introduced by the APOEF.

The residential sector is the single largest segment, (by around fifty eight percent (58%)), of the total net final energy consumption, which in 2010 was 95.75 PJ. The APOEF expects the energy savings of the residential buildings sector to be reduced to 5.24 PJ by 2020.

A summarised table of energy savings planned by the APOEF FBiH for 2020 is set out below:

Comparison

Although neither BIH nor its entities have yet adopted the energy efficiency national plans, the measures for energy efficiency and overall reduction in energy consumption are nevertheless discussed in RES Action Plans of BiH and FBiH and in RS in the Energy Strategy of RS. Also, laws on energy efficiency both in RS and FBiH impose the obligation to enact an energy efficiency action plan, not only at the entity level, but also at the level of local government, with the obligation to periodically renew such plan.

The NREAP sets a goal of nine percent (9%) energy savings by 2018 in BiH. Furthermore, one of the goals is having a forty percent (40%) share of its RES in the final consumption of electrical energy and a ten percent (10%) share of RES energy in transport.

Also, the activities envisaged to be implemented under the BEEP are expected to have the following results:

-reduced CO2 emissions (the transition to cleaner energy sources should reduce air pollution during the winter season, which is caused by improper and inefficient combustion of currently used fuels);

-increase the level of comfort in facilities, which should create a positive impact on employment in the construction sector;

-increase the awareness of energy efficiency in the participating communities; and

-reduce local pollution.

The RS Strategy stipulates that by using specified measures of energy efficiency, final energy consumption in households would be reduced by fifteen percent (15%) by 2030 compared to the scenario without energy efficiency measures and as compared to the baseline 2005 year, consumption would increase by only twenty two percent (22%). The overall share of energy consumption in residential buildings, households and services, in total final energy consumption, should thus get closer to the European average.

NREAP, APOEF and RS Strategy all discuss the goals and measures to achieve energy efficiency divided into the following sectors (which are presumed to produce the best results in energy savings): (i) building, (ii) industry and (iii) transportation systems.

The anticipated impact is:

-increasing energy efficiency targets by reducing loss of energy and reducing consumption of energy through improved technological advances;

-increasing the use of RES, according to adopted targets, which will add to energy efficiency in total;

-proceeding with structural improvements in industry with an aim of increasing the efficient use of energy and by discarding obsolete manufacturing methods;

-creation of a local energy market for RES heat energy by introducing a register of heat energy origin and by introducing an obligation for large consumers of heat energy (industrial and city heating plants) to have some of the heat energy generated from RES; and

-keeping registries of energy consumption and monitoring the results of large consumers in meeting their energy efficiency targets.

Comparison

The applicable laws on energy efficiency do not establish clear criteria for the achievement of energy efficiency targets. Although certain criteria are set out in the NREAP, APOEF and RS Strategy, these are not currently obligatory.

2. Specific Provisions of the Law

3. Obligations

4. Mandatory Audit of Large Industry

5. Strategies

Sector

Energy (PJ) / Year (2020)

Residential (buildings) sector

5.24

Services sector

1.59

Industry sector

4.41

Traffic (Transport)

1.4

6. Targets

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