Hungary referred to court and facing fines for not transposing EU energy efficiency rules

The European Commission is referring Hungary to the Court of Justice for failing to transpose the Energy Efficiency Directive. This stipulates that member states must meet certain energy savings targets from 1 January 2014 until 31 December 2020 by using energy efficiency obligations schemes or other targeted policy measures to drive energy efficiency improvements in households, buildings, industry and transport sectors. Member states had to transpose the obligations of that Directive by 5 June 2014.

Other requirements include:

• energy audits for big companies every four years,
• increased rights for consumers regarding metering and billing of their energy consumption,
• renovation of at least 3% of central government buildings every year
• and energy efficient public purchasing.

In November 2014, the Commission sent a reasoned opinion to Hungary asking the country to notify it of all the transposition measures for the Directive. To date, no legislation transposing the Directive into national law has been notified.

A daily penalty of €15,444 is proposed. The level of this penalty is set taking into account the duration and the seriousness of the infringement. In case of an affirmative judgment of the court, the daily penalty would have to be paid from the date as set in the judgment until the transposition is completed. The final amount of the daily penalty will be decided by the court.

Furthermore, several procedures for non-transposition of the Directive have been launched concerning other member states. Overall, infringement procedures have been started against 27 EU countries (all except Malta) for not having notified the Commission with regard the national measures to transpose the Directive.

Under the Lisbon Treaty, if member states fail to transpose EU legislation into national law within the required deadline, the Commission may ask the court to impose financial sanctions when referring the case to it. The daily penalty payment is calculated based by multiplying the following factors: the seriousness factor; the duration of the infringement; “n” factor (which varies between member states and takes into account their GDP); and a flat-rate amount, which currently is set at €660 per day.