The 5 December 2015 deadline for the first mandatory energy audits required under the Energy Efficiency Directive is quickly approaching. The Energy Efficiency Directive was implemented into Hungarian law, earlier this summer, by the Energy Efficiency Act, its execution decrees and the SME Act.

The obligation is on large corporations

The Energy Efficiency Act obligates large corporations (with limited exceptions) to conduct mandatory energy audits.

Large corporations are those which (considering the number of employees, annual turnover and/or balance sheet total) do not qualify as micro, small or medium-sized enterprises (“SME”) under the SME Act. Thus, entities that are not considered SMEs under the SME Act must conduct the mandatory energy audits.

When determining whether an entity is a large corporation, the data of all its linked and/or partner enterprises (if any) shall also be considered.

With some exceptions, any enterprise in which the state or a local self-government holds 25 per cent or more of the capital or voting rights shall also be classified as a large corporation.

The guidance of 16 September 2015 published by the Hungarian Energy and Public Utilities Regulatory Authority (“HEPURA”) also sets out valuable assistance on identifying large corporations.

Deadline

The deadline for the first mandatory energy audits is 5 December 2015, and once every four years thereafter.

Previous energy audits may be sufficient

Large corporations who conducted energy audits between 4 December 2012 and 5 December 2015 may be deemed as satisfying the mandatory energy audit requirement if the auditor meets the criteria specified in the Energy Efficiency Act and its execution decree.

In certain cases, further examination may be required (and in these cases, HEPURA may have discretion) to interpret whether the auditors meet the eligibility criteria set out by law (thus, a previous energy audit satisfies the mandatory energy audit requirement). Thus, in case of any doubt, it may be recommended to contact HEPURA before the 5 December 2015 deadline to further investigate the eligibility of the auditors of any previous energy audits.

Sanctions

Large corporations may be fined up to HUF 10m (approximately EUR 32,362), for failure to:

  1. complete a mandatory energy audit within the remedy period provided by HEPURA after being requested by HEPURA to do so; or
  2. cooperate with HEPURA during the mandatory energy audit examination.

No fines will be imposed, however, for the lack of a mandatory energy audit until 31 December 2016.

The legislation also provides fines and potential suspension for auditors and/or energy audit companies preparing “unworkmanlike” or false energy audit reports.