Important exceptions when calculating total final energy consumption in accordance with Section 8 of the Energy Efficiency Act
We have already written about the importance of calculating a company’s total energy consumption in other blog posts (for example, here and here). However, in day-to-day practice, it is often the case that calculating total energy consumption presents difficulties, which we hope to address in this blog post.
First things first: all the information provided here, and a little more besides, can be found in the BAFA’s ‘Guidance Note on Calculating Total Final Energy Consumption’
The first step: the smallest legal entity
Before companies can calculate their total final energy consumption correctly, a clear organisational demarcation is essential. The key factor here is who is legally considered to be the energy consumer. The BAFA stipulates that the smallest legal entity must always be considered, not the entire network or group. This is the only way to avoid consumption being recorded twice or incorrectly allocated. This precise demarcation forms the basis for a correct, audit-proof determination of energy consumption and ensures that only the energy flows that are actually relevant are included in the overall balance.
This first step already presents several pitfalls. For instance, what should be done if consumption cannot be clearly attributed to a specific company or if measurement is not possible? A typical example would be where employees from different subsidiaries operate the same machinery. A one-size-fits-all answer is usually not possible here; a detailed analysis of the situation on site is required.
Transfer of energy to third parties: When is energy not counted as final energy?
And that brings us straight to the question of how energy supplied to third parties is handled. As described above, these third parties may already be other companies within the same group. However, the same applies to entities completely outside the group, including even private individuals.
Energy that a company passes on to third parties without altering it is not counted as part of its own final energy consumption. The key point here is that the company does not use the energy itself, but merely transmits, charges for or bills for it. Typical examples include parts of buildings that are let, leased production areas, or external service providers on the company premises who are independently responsible for their own consumption. A clear contractual and metrological separation is crucial so that it can be unequivocally demonstrated which part of the energy supply is not attributable to the company’s own consumption.
But what if that isn’t possible? In that case, there are ways to allocate the energy, such as allocating it on a floor-area basis or similar methods. However, it is important – particularly when operating an ISO 50001 energy management system – that the demarcation from third parties is continuously improved over the course of operations, ideally up to 100% where possible. This is, of course, difficult in cases such as ‘heat being transported via ventilation systems to different parts of a building housing different companies’ or ‘employees from different companies sitting in the same room – who consumes the energy for the lighting?’. The solution is then usually a bit like a German essay. There is no single ‘correct’ answer, but you must be able to explain it clearly.
Cross-company locations abroad: Allocation of consumption abroad
Energy consumed abroad can generally be excluded. This applies, for example, if there is a branch operating abroad. The same also applies if, for instance, an installation team is working abroad. It is important to note, however, particularly in other European countries, that local laws apply which implement Directive 2012/27/EU (Energy Efficiency Directive). This means that similar laws to the EDL-G or EnEfG may apply there. If you have any questions on this matter, please feel free to contact us. Our international partners will be happy to assist you.
The same applies to international transport, with one exception: if the company being assessed is based in Germany and the transport begins in Germany, the energy consumed during the journey must also be included in the assessment. Energy consumption outside the scope of this exception does not need to be taken into account either.
An overview of exceptions: Which energy consumption figures do not need to be taken into account?
In addition to the points already mentioned, the BAFA guidance note sets out further clear exceptions that may be excluded from the calculation:
- Aviation fuels and marine bunker fuels: This goes without saying, but at Envision Solutions we still include this consumption in our calculations, even though it is not legally required, as there is often significant potential for savings in this area
- Third-party transport: This includes all freight forwarding activities carried out by third parties on behalf of the company. However, the energy consumption does not simply disappear; it is recorded by the relevant company
- Energy consumption when working from home: This is mainly because it is not possible to clearly distinguish between private and business use. Moreover, the effort involved would be absurd; it is difficult enough to obtain a utility bill for a single branch office that does not arrive several years late.
- Grid and transmission losses: This mainly applies to energy suppliers and describes the difference between the energy generated and the energy that reaches the end consumer. These losses are also not included in the consumption balance.
- Final energy from ambient heat/cooling and solar thermal energy: This applies primarily to heat pumps and air-conditioning systems. In these cases, only the primary energy used (usually electricity) needs to be taken into account; the energy extracted from the environment is not included.
- Material use of energy sources as raw materials, auxiliary materials, or consumables: This would include, for example, the use of hydrogen in fertiliser production. The hydrogen is incorporated into the production of the end product as a raw material and is not utilised for energy purposes. It can therefore be excluded from the energy balance. This does not apply if energy is released, such as when propane is burned to test the fire resistance of materials.
- Energy consumption of listed technical installations: This could include, for example, the steam requirements of the museum locomotive at the Mannheim Technical Museum. But it naturally also applies to historic industrial installations that are operated solely for demonstration purposes. In this particular case, a detailed examination of each individual instance is crucial
That covers the main points, except for one, which will be dealt with in a separate section:
Company cars used for private purposes: When is the allowance waived?
When calculating total final energy consumption, the question often arises as to how company cars that are also used for private purposes should be treated. Essentially, the key factors are who is legally considered the energy consumer and to whom the energy use should be attributed in economic terms. If the fuel or charging electricity is paid for entirely by the company and allocated to the company fleet, the energy consumption is generally counted as part of the company’s consumption.
However, if there is a clear contractual and accounting separation—for example, through the reimbursement of private expenses, separate billing systems, or demonstrable predominantly private use—the corresponding proportion may, under certain conditions, be deducted from the relevant total final energy consumption. It is important to have clear documentation and a traceable demarcation so that, in the event of an audit, it can be transparently demonstrated which consumption is business-related and which is private. However, as this is not guaranteed in most cases, the BAFA guidance note offers a simple solution: company cars used for private purposes can be excluded from the accounts on a flat-rate basis.
Conclusion: Make use of exceptions – but do so judiciously and with expert guidance
The exceptions when determining total final energy consumption enable companies to define their energy data precisely and in a legally compliant manner. Not every energy source procured needs to be automatically included in the calculation – the decisive factors are legal classification, actual use and comprehensible documentation. At the same time, exceptions should not be interpreted in a blanket or overly generous manner. Incorrect delineation can lead to incorrect classifications, legal uncertainties or problems during audits. Companies are therefore well advised to examine the regulations carefully and – particularly in the case of complex structures – to seek expert support. This is the only way to ensure that total final energy consumption is calculated correctly whilst making appropriate use of all permissible leeway.
Please feel free to get in touch with us, and we can discuss how we can analyse your overall final energy consumption to show you a clear path towards meeting the requirements of the EnEfG and the EDL-G.
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