What is toe – tonne of oil equivalent?
In the field of energy efficiency and the white certificate scheme, the term toe (or TOE) appears frequently. For industrial companies implementing investments aimed at reducing energy consumption, it is one of the key units used to assess the results of energy efficiency projects. Energy savings that form the basis for obtaining Energy Efficiency Certificates, commonly referred to as white certificates, are expressed in toe. Although the term has been used in technical documentation, energy efficiency audits and legal regulations for many years, many people still do not fully understand what toe actually is, why this particular unit is used, or what its real economic value is within the white certificate scheme.
What does toe mean?
Toe stands for tonne of oil equivalent. It is a standardised unit of energy used to compare different energy carriers by expressing them in terms of the amount of energy contained in one tonne of crude oil. Toe provides a common basis for comparing electricity, natural gas, process heat, steam, solid fuels and renewable energy sources. As a result, energy performance can be measured consistently regardless of the type of energy carrier used in an industrial facility.
1 toe corresponds to:
- approximately 41.868 GJ of energy,
- approximately 11.63 MWh,
- approximately 1,000 m3 of high-methane natural gas, although the exact value depends on the gas quality parameters and the method used for energy billing,
- approximately one tonne of crude oil with a specified calorific value.
In simple terms, toe can be regarded as a universal unit used to describe the amount of energy consumed or the amount of energy saved.
Why is toe used in energy efficiency?
The use of toe is primarily driven by the need for standardisation. Industrial facilities rely on many different energy carriers, making direct comparisons difficult. For example:
- electricity is measured in MWh,
- natural gas in m3 or kWh,
- process steam in GJ,
- solid fuels in tonnes,
- process cooling is often measured in MWh of cooling energy.
Without a common unit of measurement, assessing the actual energy performance of different projects would be difficult and often inconsistent. Toe makes it possible to express energy savings achieved through various energy carriers - including electricity, natural gas, process heat and solid fuels - using a single comparable unit.
Toe makes it possible to compare energy efficiency projects implemented across different industries and technologies, while also supporting economic analyses and the valuation of energy savings. The toe unit is used, for example, in statistical analyses, ESG and decarbonisation reporting, and the administration of support schemes, including white certificates. For this reason, toe is used by the Energy Regulatory Office, the European Commission, the International Energy Agency, and financial institutions supporting energy-related investments.
Toe and white certificates – what is the connection?
Within the white certificate scheme, toe is the fundamental unit used to quantify the final energy savings achieved through an energy efficiency project. White certificates are Energy Efficiency Certificates awarded for measures that reduce energy consumption. To obtain these certificates, companies must demonstrate a specified level of energy savings. This is where the toe unit is applied.
The value of a project is determined based on its average annual final energy savings expressed in TOE. The greater the energy savings, the greater the number of property rights granted under the white certificate scheme. For example:
- a project generating annual savings of 100 toe may receive certificates corresponding to 100 tonnes of oil equivalent,
- a project generating 1,000 toe has ten times greater support potential.
The current minimum threshold for applying for white certificates is 10 TOE of average annual final energy savings.
How is toe calculated?
The toe value is calculated using conversion factors specified in applicable regulations and in the documentation published by the Polish Energy Regulatory Office (URE). The calculation converts actual energy savings into final energy savings expressed in toe.
1 TOE = 41.868 GJ = 11.63 MWh
This means that, to calculate the TOE value, the amount of energy must be divided by the appropriate conversion factor. Within the white certificate scheme, the calculations are based on the final energy savings achieved through a specific energy efficiency project. The actual reduction in energy consumption is first determined and then converted into toe using the relevant conversion factors.
How much is 1 toe worth in the white certificate system?
The toe unit itself does not have a market price. Its economic value lies in the property rights associated with an Energy Efficiency Certificate, for which toe serves as the accounting unit (hereinafter referred to as the value per 1 toe).
The market price fluctuates depending on several factors, including the supply of Energy Efficiency Certificates, the level of mandatory energy efficiency obligations, developments in the energy market, and the activity of obligated parties.
Between 2023 and 2025, the value of 1 toe within the white certificate scheme (the market price of PMEF_F property rights) most commonly ranged between PLN 2,000 and PLN 3,000 per toe. During periods of increased demand, prices could be even higher. From the perspective of industrial companies, toe is therefore not merely a technical unit, but also a direct indicator of potential financial benefits.
Summary
Toe, or tonne of oil equivalent, is a universal unit of energy used to compare different energy carriers and evaluate the results of energy efficiency projects. Within the white certificate system, it plays a key role because the amount of energy savings that forms the basis for awarding Energy Efficiency Certificates is expressed in toe.
In practice, toe enables not only the technical comparison of projects but also the assessment of their economic value. At current market prices for property rights, even several dozen toe can translate into significant additional revenue for an industrial company. As energy efficiency and industrial decarbonisation continue to gain importance, toe will remain one of the key units worth understanding and monitoring.
