Does energy savings under the law have to mean an actual reduction in energy consumption?
When planning investments to improve energy efficiency, entrepreneurs often wonder whether the President of the Energy Regulatory Office (URE) might still refuse to issue energy efficiency certificates (so-called "white certificates"), despite the implementation of such projects. In other words, if a company invests—often significant amounts—in an energy-saving project, does it have a guarantee of obtaining white certificates that can then be sold on the Polish Power Exchange? These concerns are justified, as in practice, there may unfortunately be cases where the President of URE refuses to grant white certificates.
Article 22 of the Energy Efficiency Act states that the President of the Energy Regulatory Office (URE) issues an energy efficiency certificate. The use of the phrase "the President of URE issues" could therefore suggest that the President of URE is legally obligated to issue white certificates in accordance with the submitted application. After all, the act does not state that the President of URE "may issue" or "considers the application" – which could imply that the decision may be negative. However, the practice of the Energy Regulatory Office shows that decisions may indeed be negative.
When can the President of URE refuse to grant white certificates?
According to 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, first of all, when the application for an energy efficiency certificate is incomplete, e.g. lacks necessary data or documents, the authority should request the applicant to complete the formal deficiencies before issuing a negative decision. Only the failure to supplement the application within the set deadline or incorrect completion may result in a negative decision or the application being left unprocessed.
Absolute grounds for refusal to issue energy efficiency certificates should be understood as the cases specified in Article 20(2) of the Energy Efficiency Act, primarily the exceeding of the permissible amount of state aid for a given project as a result of obtaining a thermomodernisation bonus or investment aid for the given investment. White certificates will also not be granted for projects that are too small, as a result of which the energy savings or total energy savings achieved are less than 10 tonnes of oil equivalent on average per year.
A common reason for refusing to issue white certificates (or approve them after a post-implementation audit) is also the commencement of work on the energy efficiency project before the date of submission of the application for the energy efficiency certificate. A key issue here is the so-called "incentive effect", i.e. the fact that energy efficiency certificates are issued to entities planning to start work on the implementation of an energy efficiency project, not to entities that are already in the process of implementation, and especially not to those that have completed it. Important in this context will be the dates of equipment orders and conclusion of execution contracts.
There may also be a situation in which 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 of 30 November 2021, or the investor is under a mistaken belief as to whether the investment meets the conditions to qualify as an energy efficiency project.
Other cases for issuing a negative decision may include reasons related to the quality of the energy efficiency audit and the auditor themselves. The President of 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 it was carried out by an entity that does not meet the statutory requirements regarding professional experience or education. Procedural issues concerning the evaluation of the collected evidence and the interpretation of substantive law may also be relevant.
We have prepared an infographic with key information: DB Energy infographic – how to obtain white certificates?
View the infographicWhat to do after a refusal to grant white certificates?
The refusal to issue white certificates is not a final decision that closes the path to obtaining the certificates. A decision by the President of URE to refuse issuing white certificates does not definitively prevent obtaining them, as an appeal may be filed against an unfavourable decision of the President of the Energy Regulatory Office to the District Court in Warsaw – the court of competition and consumer protection. The appeal must be submitted within 7 days of receiving the decision. Moreover, even in the case of an unfavourable ruling by the court of first instance, it may be subject to review by the Court of Appeal in Warsaw. In practice, this means the application for white certificates can be examined by three independent bodies, including two separate judicial panels. Regardless of the legal means to verify the URE President's decision described above, I strongly recommend that investors cooperate with a professional entity providing services related to obtaining, selling, and settling white certificates as early as possible to avoid the need to challenge unfavourable decisions in court.
