Can the President of the Energy Regulatory Office refuse to issue white certificates?
When planning investments aimed at improving energy efficiency, entrepreneurs often wonder whether, despite implementing such projects, the President of the Energy Regulatory Office (URE) can refuse to issue energy efficiency certificates (commonly known as “white certificates”). In other words, when investing—often significant amounts—in an energy-saving project, does the investor have a guarantee of obtaining white certificates that can later be sold on the Polish Power Exchange? These concerns are justified, as in practice there may unfortunately be situations in which the President of URE denies the issuance of white certificates.
What does the law say?
Article 22 of the Energy Efficiency Act states that the President of the Energy Regulatory Office issues an energy efficiency certificate. The use of the phrase "the President of the URE issues" could therefore suggest that the President is legally obligated to issue white certificates in accordance with the submitted application. After all, the act does not state that the President "may issue" or "examines the application" – which could imply that the decision may be negative. However, the practice of the Energy Regulatory Office shows that decisions may be negative.
When can the President of the URE refuse to issue white certificates?
According to the applicable law, the issuance of energy efficiency certificates is subject to the provisions of the Code of Administrative Procedure – regarding the issuance of certificates. Therefore, if the application for an energy efficiency certificate is incorrect, e.g. missing required data or documents, the authority should first call on the applicant to correct the formal deficiencies before issuing a negative decision. Only if the application is not corrected within the set deadline or is corrected improperly may a negative decision be issued or the application be left unconsidered.
Absolute grounds for refusal to issue energy efficiency certificates include the cases specified in Article 20(2) of the Energy Efficiency Act, primarily exceeding the permissible level of state aid for the given project due to receiving a thermomodernization bonus or investment aid for the project. White certificates will also not be granted for projects that are too small, where the resulting energy savings or total energy savings are less than 10 tonnes of oil equivalent on average per year.
A common reason for refusing to issue white certificates (or to approve them after a post-implementation audit) is also starting work related to the implementation of the energy efficiency project before the date of submitting the application for the certificate. This relates to the so-called "incentive effect", i.e. the fact that energy efficiency certificates are issued for entities planning to start work on an energy-saving project, not for those already in the process of implementation or who have already completed the project. Relevant here will be the dates of equipment orders and execution contract signings.
It may also happen that a given investment is not included in the list of projects aimed at improving energy efficiency announced in the Notice of the Minister of Climate and Environment dated 30 November 2021, or that the investor mistakenly believes that the investment meets the conditions to qualify as an energy efficiency project.
Other cases of negative decisions may concern the quality of the energy efficiency audit and the qualifications of the auditor. The President of the URE may find that the audit attached to the application does not meet the requirements of the regulation of the Minister of Energy or that the audit was performed by an entity that does not meet the statutory requirements regarding professional experience or education. Procedural issues related to the evaluation of the collected evidence and the interpretation of substantive law may also be significant.
What to do after a refusal to issue white certificates?
A refusal to issue white certificates is not a final decision that closes the path to obtaining them. A decision by the President of the URE to refuse white certificates does not definitively end the process, as an appeal may be filed with the District Court in Warsaw – the Court of Competition and Consumer Protection – within 7 days from the date of delivery of the decision. Moreover, even in the case of an unfavorable ruling by the first instance court, it is possible to submit the case for review by the Court of Appeal in Warsaw. In practice, this means the application may be reviewed by three independent bodies, including two separate judicial panels. Regardless of the legal options to challenge the URE President’s decision, we strongly recommend that investors engage with a professional entity specializing in obtaining, selling, and settling white certificates at the earliest possible stage in order to avoid the need to resolve adverse decisions through the courts.
